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NetApp (NTAP) To Buyout CloudCheckr to Augment Spot Portfolio

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NetApp (NTAP - Free Report) inked an agreement to acquire CloudCheckr for an undisclosed sum. With the CloudCheckr buyout, the company is looking to bolster the Spot by NetApp FinOps solutions.

CloudCheckr is a cloud optimization platform that helps enterprises to gain enhanced visibility regarding their cloud operations as well as extend tight security to the same along with cost reduction and cloud resource optimization. Founded in 2011, Rochester-based cloud company boasts more than 10K loyal users and over 200 employees.

CloudCheckr will enhance NetApp’s CloudOps platform by adding cost management capabilities, cloud billing analytics, cloud compliance and security features. This combination will help users to gain significant operational cost visibility while accelerating implementation of infrastructure and business applications, noted the company. 

The latest acquisition follows the company’s earlier buyout of Data Mechanics in Jun 2021. Data Mechanics is a managed platform that enables clients to easily run Apache Spark on Kubernetes. The acquisition will help NetApp develop its latest Spot Wave offering.

Earlier this year, NetApp unveiled Spot Wave by NetApp solution that will aid enterprises in lowering costs. It  also facilitates the development of data applications through a serverless infrastructure to deploy Apache Spark on the Kubernetes platform.

NetApp, Inc. Price and Consensus


NetApp, Inc. Price and Consensus

NetApp, Inc. price-consensus-chart | NetApp, Inc. Quote


NetApp’s Robust Acquisition Strategy

Acquisitions have helped NetApp  to enhance its presence in the storage market. The company’s acquisition of SolidFire for nearly $870 million is one of its important takeovers. The buyout bolstered NetApp’s flash-based storage product portfolio and helps it maintain a leading position in the flash storage domain.

In the last reported quarter, the company’s All-Flash Array Business annualized net revenue run rate came in at $2.8 billion, up 23% year over year.

Coming to recent acquisitions, NetApp’s acquisition of cloud services startup –– Spot –– in July last year is one of the pivotal buyouts.

The acquisition of Spot bolstered NetApp’s Application Driven Infrastructure capabilities. Spot’s compute platform provides customers with solutions that help optimize workloads, while maintaining both service-level objective (SLO) and service-level agreement (SLA). 

The company also purchased CloudJumper (April 2020) and Talon Storage (March 2020). CloudJumper  is a cloud software company specializing in virtual desktop infrastructure (VDI) solutions and remote desktop services' (RDS) domain. Talon Storage has boosted NetApp’s portfolio of cloud data services.

Apart from acquisitions, NetApp’s performance is gaining from continued strength in the Hybrid Cloud and Public Cloud segments as well as robust billings growth.

The company is also gaining from increasing clout of cloud-integrated all-flash solutions; File, Block and Object Software products; and hybrid multi-cloud offerings.

Rapid adoption of Microsoft Azure NetApp Files is a major catalyst driving the company’s Public Cloud Services, which recorded annualized recurring revenues of $337 million in the first quarter of fiscal 2022, up 89% year over year.

Higher expenditures on product development amid intense competition from fellow storage peers including Pure Storage are a concern.

Zacks Rank & Stocks to Consider

Currently, NetApp carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader technology sector are Square (SQ - Free Report) , HP Inc (HPQ - Free Report) and Avnet (AVT - Free Report) . All the stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for Square, HP Inc and Avnet is pegged at 31.4%, 8.2% and 25.4%, respectively.

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