NetApp to Cut More Jobs While Building Out Its Cloud Portfolio

The same week that NetApp officials said they will lay off 6 percent of workers, they unveil new SaaS storage offerings for hybrid cloud environments.

NetApp storage

NetApp is undergoing another round of job cuts as the data storage giant continues to remake its product portfolio and restructure its business to address the challenges of a cloud-centric business world.

In a filing with the Securities and Exchange Commission (SEC) Nov. 3, NetApp officials said they are reducing the company's workforce by 6 percent, or about 640 people. The vendor had about 10,700 workers as of July, and the job cuts will run through the middle of next year. Officials expect NetApp to take a restructuring charge in connection with the layoffs of between $50 million and $60 million.

This is only the latest round of job cuts at the company, which like many other established hardware vendors—such as Intel, Hewlett Packard Enterprise and Cisco Systems—is having to adjust to organizations buying fewer data center hardware systems and relying more on public cloud environments from the likes of Amazon Web Services and Microsoft. NetApp in February announced it was cutting 12 percent of its workforce—or about 1,500 employees—as part of an effort to restructure its business and reduce costs. That followed layoffs last year.

Company officials have been trying to transform the company into more of a software vendor to address the changing customer practices. Late last year, NetApp bought flash storage vendor SolidFire for $870 million to build out its portfolio to better address the demands of next-generation data centers and hybrid clouds.

At the time, CEO George Kurian said the SolidFire acquisition would "benefit current and future customers looking to gain the benefits of Webscale cloud providers for their own data centers. SolidFire combines the performance and economics of all-flash storage with a Webscale architecture that radically simplifies data center operations and enables rapid deployments of new applications."

The transition has not been easy for NetApp. The company in August reported quarterly financial numbers that include $1.29 billion in revenue—a 3 percent drop from the same period in 2015—and a profit of $64 million, compared with a $30 million loss the year before.

Days after filing the SEC document, NetApp officials rolled out new and enhanced products that are part of the effort to address the growing competition from the cloud. They included new software-as-a-service (SaaS) offerings that ease data management for customers that want access to public clouds. With NetApp's on-demand Cloud Sync Service, users can more easily move and synchronize data between on-premises storage systems and Amazon Web Services' (AWS) Simple Storage Service (S3) in the public cloud.

The service, available via the AWS Marketplace, gives customers greater visibility into their data by enabling them to use AWS analytics tools for on-premises data, and lowers costs by enabling organizations to reduce their use of cloud resources, according to NetApp officials.

In addition, NetApp is making its NetApp Private Storage (NPS) for Cloud technology available as a service delivered through a number of partners, including Arrow, Faction and ThinkOn, and via co-location vendors such as Equinix. Offering NPS in an SaaS model means customers can now pay for it in a subscription fashion rather than as an up-front capital cost. In addition, users also will be able to connect to multiple public clouds simultaneously, officials said.

Another SaaS offering, Cloud Control for Microsoft Office 365, enables users to more easily control and protect data in Office 365 environments. The service also supports data retention efforts in cloud services such as Amazon S3 and Microsoft Azure and in on-premises storage.

NetApp also rolled out new releases of AltaVault cloud-integrated storage that now includes integration with the vendor's SnapMirror data replication technology, StorageGrid Webscale object-based storage for web applications for hybrid clouds with support for Amazon S3 versioning and an enhanced user interface, and SnapCenter for centralized data protection and clone management. In addition, NetApp is offering a services bundle that offers customers storage services in the same fashion as a cloud provider, company officials said.

The company is working with partners to help customers embrace hybrid cloud environments that can address their particular needs, according to Phil Brotherton, vice president of NetApp's Cloud Business Unit.

"Building a hybrid cloud using NetApp's data fabric solutions and services allows customers to efficiently control and secure their data while capitalizing on its value for maximum business benefit," Brotherton said in a statement.