How Has NetApp’s Revenue and EBITDA Composition Changed In The Last Five Years?
As you can see from the table below, Hardware Maintenance and Services have become more important than Storage Product sales for NetApp in the last few years:
Reasons for low product revenues & high maintenance revenues:
- Decline in storage hardware prices from $1.42 per GB in 2011 to about 60 cents per GB in 2015, a 50% annual decline.
- Low demand for storage systems from large vendors over since 2014. Share of small ODM vendors up from 25.7% in 2013 to 31.5% in 2015.
- Low storage product demand translated to higher maintenance revenues due to increased renewal rate of contracts.
- Software entitlements & maintenance rose due to higher demand for software-defined storage solutions compared to standalone storage boxes.
Have more questions about NetApp (NASDAQ:NTAP)? See the links below:
Notes:
1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for NetApp
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