Hardware is alive and kicking, especially in the storage arena, according to Dan Warmenhoven chief executive of Network Appliance (NetApps), whose profits have more than doubled.
For its fiscal third quarter 2004 the storage vendor reported net income up 104 per cent to $40.2m. Turnover was up 30 per cent from the same period in 2003 to $228.5m.
"IT spending is definitely on its way back up. There is strength in budgets," Warmenhoven exclusively told CRN. "Our services business represented 9.5 per cent, software 31 per cent and the remainder was all hardware."
However, Warmenhoven said 85 per cent of NetApps R&D is on the software that ships with the hardware. He predicted growth for Q4 of about seven to nine per cent and about 25 per cent for next year.
Hamish Macarthur, managing director of storage analyst Mcarthur Stroud, said hardware and software are complementary businesses.
"Hardware platforms are becoming commoditised but there is software within the hardware, so users effectively get added functionality as part of the hardware package," he said.
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