Back to top

Analyst Blog

Ace storage vendor NetApp Inc. (NTAP - Analyst Report) came out with a success story regarding the transformation of the information technology (‘IT’) infrastructure for the cosmetics manufacturer Revlon Inc. . Financial details of the deal were not made public.

New York-based Revlon deals in cosmetics, hair color, beauty tools, deodorants, fragrances, skincare, and other beauty care products. The company has its operations in 100 countries across six continents. Managing huge data across its operating centers was getting difficult for this beauty-care company thus hindering its business growth.

While it was time to say goodbye to the legacy storage systems, Revlon found NetApp’s offerings suitable. NetApp developed a private cloud infrastructure for Revlon to help the company process and analyze loads of data to learn about current demand trend.

Revlon reportedly mentioned that with NetApp, data transformation has become easy in the virtualized environment, and system downtime has reduced significantly, facilitating faster decision making. This has helped the cosmetics giant innovate and market new products faster.

Considering the success rate, Revlon is planning to reduce its hardware dependence and develop an ERP (enterprise resource planning) system within its private cloud environment based on NetApp applications. This will allow Revlon to free up office space and cut operational costs.

We believe that the close association with Revlon will allow NetApp to secure more deals from this industry vertical.

In a separate development, NetApp unveiled a high-performance storage system, E5500, which is an extension of its popular E-series systems. The E5500 targets organizations that deal with big data and high-performance computing. The storage system is expected to process huge data quickly without any interruption that would help conduct researches needed for economic development.

Storage sits at the heart of business operations. Despite economic turbulence and a tough IT spending environment, organizations are bound to spend heavily on storage. Hence, growth potential in the storage space is immense, which is going to help companies like NetApp.

NetApp delivered decent third quarter 2013 results with the top and bottom lines surpassing the Zacks Consensus Estimates. Management has guided cautiously for the next quarter, keeping in mind the ongoing macro uncertainty caused by the European debt crisis and federal budget cuts.

Though new product refreshes and association with Cisco Systems Inc. (CSCO - Analyst Report) and VMware Inc. (VMW - Snapshot Report) are positives, we believe that uncertain IT spending patterns and growth prospects of its archrival EMC Corp. (EMC) may remain serious concerns.

NetApp currently carries a Zacks Rank #3 (Hold).

Please login to Zacks.com or register to post a comment.