Big loss marks 'new chapter' for NetApp

New CEO claims to have made moves to 'regain traction' in the channel

NetApp has claimed its fiscal 2016 is "the beginning of a new chapter", despite posting a loss of $30m (£19m).

In the first quarter of 2016, which ended 31 July, NetApp's sales slumped 10 per cent year on year to $1.34bn. It made a net loss of $30m, compared with a net profit of $88m the year before.

Certain divisions in the business enjoyed growth though, the firm said, pointing to its all-flash business, which grew 137 per cent annually, representing its fifth quarter in a row of triple-digit growth.

The Q1 earnings call was the first for new CEO George Kurian. He said his arrival and the beginning of a new fiscal year marks a significant change for the company.

"Our first fiscal quarter marks the beginning of a new chapter for NetApp," he said. "In the next phase of our journey, we are pivoting to better address the changing industry, to improving our own execution and to enhancing value for our shareholders.

"In my first days as CEO, I spent time to ensure that we had a well-articulated view of the industry transition and a clear understanding of customers' IT transformation priorities, but this alone is not enough. To maximise results from our strong portfolio of technologies we need to operate the business with a greater level of discipline and to align resources against our most important priorities."

Kurian said turning around NetApp's channel business has been a priority for him.

"We also took action to regain traction in our channel," he said. "We added a global channel chief, a worldwide channel leadership team and made investments in channel marketing programmes, all by reallocating resources within our operating expense envelope.

"I personally have met with partners in the Americas and EMEA and have seen their excitement over the opportunity with NetApp."

NetApp's chief financial officer Nick Noviello agreed that FY16 will be one of change for the company.

"FY16 is a year of transition as we rebuild our pipeline, help customers through their IT transition and return the business to our targeted operating model," he said. "The positive feedback we have received from customers and partners reinforces our confidence in our directions."