Curiously, says NetApp, when the global economy slows down, people are not buying as many storage bays. • The Register

The old adage says that when America sneezes, the rest of the world catches a cold. According to NetApp's director, George Kurian, some large companies are already looking for fabrics.

Blow your nose. From a cold, they have been victims of the impending economic slowdown and the war of tariffs with China. Why, what were you thinking?

The executive, Thomas's twin brother, director of Google Cloud, made the comments Wednesday as he outlined NetApp's third-quarter financial results for fiscal year 2019, which ended Jan. 25. At $ 1.56 billion, the missing estimates for Wall Street and non-GAAP earnings per share were $ 1.20.

Profits reached $ 249 million, in sharp contrast to the loss of $ 479 million a year earlier, when NetApp implemented changes to US tax accounting.

He added that large companies had unexpectedly reduced their capacity purchases due to the slowdown in the global economy as NetApp's "biggest customers" fell back directly into the quarter.

"We witnessed a general slowdown in purchases in January as a result of deteriorating global economic outlooks and trade policy uncertainties." Faced with these obstacles, our most important customers are have become more cautious in their buying behavior. "

He added: "The industries particularly exposed to China and the public sector were more and more cautious".

NetApp sales via the channel – about 80% of its business – are much better off; it is the large direct sales of companies that have disappointed, and this is the purchased capacity and not the systems.

The income distribution was as follows:

• Revenue – $ 967 million (up 2% from $ 952 million reported a year ago)
• Software Maintenance – $ 239 M ($ 221 M per year)
• Maintenance of equipment and other services – $ 357 million ($ 366 million a year ago)

The computer hardware maintenance category has dropped, but the main damage has been caused by insufficient growth in product sales, as the US public sector seeks to be one of the culprits.

The Americas accounted for 52% of revenues, down from 53% a year earlier. The commercial sector and the public sector accounted for 41% of this total, compared to 44% and 14% in the previous quarter, which represents a sharp drop. The closure of the US government has probably not helped.

EMEA and Asia Pacific's share of revenue was 33% and 14% respectively – the same level as a year ago.

Following a call from badysts, Kurian switched to vendor mode, claiming that NetApp had gained market share from rivals during the quarter, citing its full-flash utilization rate of $ 24 billion. dollars, up 19%. Only 15% of its customers use 100% Flash arrays, so there is room to grow, he said, which would be facilitated by the anticipated declines in flash prices.

"We are going to take a lot of big, weak players in disk systems, IBM, Hitachi, Fujitsu, Oracle, HPE, and a lot of them." And even Dell has a mid-range portfolio and an IM portfolio that pose challenges So we are happy with our opportunities. "

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Kurian has seen no change in the competitive environment: "Our earnings rates have remained constant and our pipeline remains healthy." But "we do not have perfect visibility on all the reasons for slowing down purchases".

The boss said his company was looking to use multi-cloud software and 100% Flash bays to boost growth.

For the fourth quarter, revenues are expected to be in the range of $ 1.59 to $ 1.69 billion, which is half of the previous year's quarter – no growth and low prospects. Why is that? Kurian's "uncertain macroeconomic environment".

El Reg This could suggest that NetApp was a year or more behind in the hyperconverged infrastructure. Instead, Dell EMC and Nutanix enjoy by far the largest share of HCI products.

An interviewer responding to the badyst's call for results for the third quarter asked Kurian the following question: [SolidFire stand-alone and HCI] Execution rate that you consider reasonable or a percentage of product turnover?

He refused to "divide", but he promised "more as we move toward Exercise 20". Said everything really. ®