(Table 2 provided by Data Monitor, NetApp, Inc., 2011)
SWOT ANALYSIS SUMMARY
Strengths. NetApp has strong partner networks allowing them to reach a wide customer base. NetApp can attract customers in the broad market and niche market through their partnerships. These partnerships help NetApp expand in the global market to reach customers that were previously out of reach. Since the stock market bubble of 2002, NetApp has reported steady gains in revenue. NetApp has high investor confidence for their future growth. As a technology company, NetApp focuses heavily in research and development (R&D). NetApp’s R&D focus allows them to maintain competitive advantage in their industry and maintain their constant innovation. Customer needs are constantly evolving with the changes in technology, and NetApp’s R&D focuses on meeting future their future customer’s demands (Data Monitor, NetApp, Inc., 2011).
Weaknesses. NetApp lack of scale compared to their competitors harms their potential for growth. Netapp lacks the scale to compete with their competitors like EMC, HP, and IBM. EMC, NetApp’s leading competitor, generated $20.0 billion in revenues for year 2011 compared to NetApp’s own revenue of $5.2 billion in revenue for year 2011. NetApp’s competitors have larger resources and scale of operations compared to NetApp’s own resources. NetApp is highly dependent on their U.S. revenues. NetApp does operate in 130 countries across the globe, but the U.S. accounts for over 50% of the company’s total revenues. This high dependency on the U.S. puts NetApp’s performance can be affected by the economic risks of the U.S. NetApp also has a high business risk due to the dependency on a few large customers, resellers, and distributors (Data Monitor, NetApp, Inc., 2011).
Opportunities. There has been a steady increase in demand for cloud computing services. Worldwide demand for cloud computing is forecast to show strong growth in the near future. NetApp is in the position to meet the needs of future business clients. The increase in demand for cloud computing services also creates a demand for NetApp’s solutions and products. NetApp has the opportunity to grow through acquisitions. New acquisitions allow NetApp to expand its market reach and further diversify their market channels (Data Monitor, NetApp, Inc., 2011).
Threats. Intense competition is NetApp’s greatest threat. There is intense competition in the storage and data management market. NetApp must compete with long established companies such as HP, IBM, EMC, Hitachi, and other cloud computing companies. Technological changes are constant and evolve quickly. Rapid changes in technology, short product life cycles, and dynamic customer preferences may affect NetApp’s performance. If NetApp cannot continually innovate as they have been doing, NetApp may lose clients to their competition (Data Monitor, NetApp, Inc., 2011).