June 5, 2015
Now that NetApp (NTAP) has executed a change at the top–replacing ex-chairman and chief executive Tom Georgens with George Kurian, the company’s product operations executive vice president–and decided to lay off some 500 workers and hire a new channel chief, what now for the beleaguered storage platform provider?
Most observers pinned NetApp’s struggles on Georgens’ failure to grow sales–admittedly in a difficult environment of customers shifting to cloud-based storage. Georgens, who joined NetApp in 2005, had been CEO since 2009, so he certainly warrants much of the blame.
But will Kurian, in an interim role, shift the vendor to driving margins rather than chasing growth? At this point, it’s an open question with no certain answer. From the looks of Kurian’s statement out of the gate, it appears top brass believes the company’s strategy is sound and the failing has been Georgens’ leadership.
“The board believes that the strategy of the company is right, but new leadership will accelerate the opportunity,” he said.
Okay, so NetApp intends to follow the same product path under Kurian. But let’s not forget the vendor’s appointment last week of new channel chief Bill Lipsin, a former Brocade (BRCD) executive whose charter is to improve partner visibility and to prove to partners just how much the vendor values them. Will Kurian fully support the channel?
Given NetApp’s run of quarterly downturns, layoffs, struggle to deliver its clustered Data OnTap OS and failure to gain upticks from new storage technology, will Mike Nevens, who’s transitioned from lead independent director to chairman, stay the course with Kurian, or look outside the company for new blood at the helm?
Nevens already has said the board will search for a new CEO but also has placed Kurian at the top of his list of internal candidates.
Still, would the better move be to find either a turnaround specialist to right the ship in a new direction, or locate the best leader to position the company for a sale? Might Cisco (CSCO), IBM (IBM) or Oracle (ORCL) be interested, as some have rumored?
No matter which course the company ultimately follows, in the meantime Kurian will have to up NetApp’s game with a dynamic go-to-market strategy backed by a solid channel partner commitment to reverse the vendor’s fortunes.
In its recently completed FQ4 2015, NetApp’s earnings fell 32 percent to $135 million. For the full year, the vendor’s net income fell 12 percent to $560 million.
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