Exclusive: NetApp CEO opens up on 'urgency' required to overhaul firm when he took over
George Kurian reflects on his first two years as NetApp CEO in an interview with CRN
NetApp's chief executive George Kurian has said he now feels good about where the company is, following nearly two years as CEO, during which he implemented a three-pronged turnaround plan.
Kurian took over the top job at NetApp in June 2015, at a time when the company's share price was falling and its then-UK boss admitted there was some confusion among customers.
Speaking exclusively to CRN, George Kurian (pictured) admitted it was clear when he took over that there was an urgent need to make changes. At first, he met with key company stakeholders to get a sense of where the company was at, before implementing his grand plan.
"I first spent time with our customers and partners and investors, in addition to the employees of the company - just interviewing many different stakeholders about the state of the union," he said. "I immediately got a sense of the real positives and the deep loyalty that we had in our customer base, the commitment of the partners, and the genuine affection for the company.
"I also felt there was clear urgency needed to steer a different course for the business, so we outlined a transformation programme that encompassed three things: The first was [to do with] the technology portfolio - to accelerate the technology portfolio towards the faster-growing parts of the market. The second was to adjust our cost structure to be in line with the expectations of the business; and the third was to bring on a new leadership team to drive the business to the next chapter of its evolution."
Kurian claims he has delivered on all three areas over the last almost two years.
"I feel really good about all those things we laid out," he said. "We communicated a plan to the investors and we are ahead of that plan. We returned the company to growth after three years; we accelerated our number-one position in several different parts of the storage market. We are the fastest-growing all-flash-array vendor, the fastest-growing SAN vendor - and that's the first time in the history of the company that a CEO of NetApp can say that. We have the first number-one share in the storage and device-management market. So we feel very, very good about our progress in those dimensions.
"In terms of the cost structure, I think the financial metrics continue to speak for themselves. The leadership team has really gelled - we have lots of new talent which has come to talent because they have confidence in our position that we get to take an institution that is beloved by customers for doing right by them to the next chapter of our history."
When Kurian joined NetApp in June 2015, the firm's shares traded for between $33 and $34 - a price which had fallen significantly compared with six months previously when the figure was closer to $44. Since Kurian took over, the company's share price has increased to highs of nearly $43 this month.
"We see Dell and EMC's merger as a complete opportunity for NetApp. We're gaining share at their expense. I think they've got several phases of rationalisation to take on."
Kurian added that now he sees a "real turnaround" in the company and its partners and staff. When asked if he first saw his mission as CEO as a turnaround mission, he said: "When I use the word turnaround, I mean we were not delivering to the fullest expectation and aspirations that we could deliver, and I see plenty of opportunity to accelerate that progress. We have made a lot of progress over the last year and a half; our stock price is clearly reflective of that. We think we've got even bigger and much bolder aspirations to take the lead in this industry."
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Exclusive: NetApp CEO opens up on 'urgency' required to overhaul firm when he took over
George Kurian reflects on his first two years as NetApp CEO in an interview with CRN
Last man standing
The storage market has undergone a significant transformation in recent years, with EMC being snapped up by Dell, HP splitting into HP and HPE - the latter of which snapped up Nimble Storage earlier this month. Furthermore, the start-up space remains aggressive and some, such as Pure Storage, have become more mainstream.
Against this backdrop, NetApp now claims to be the last, large independent storage firm standing. Kurian said this puts the company in a unique position to be able to compete against its rivals.
Appraising the current storage market, Kurian said: "We have a phenomenal flash portfolio. I think we are the only vendor in the storage market which grew market share year on year last quarter, even though it was not our fourth quarter, which is traditionally our strongest quarter. In the strongest quarter for our competitors, we grew share against them, which is why some of them had to buy assets to try to compete with us. We feel very, very good."
When asked to elaborate on his reference to what was presumably HPE's purchase of Nimble, Kurian added: "I think it is part of the road map they have laid out for themselves. I don't comment about others' acquisition strategies."
Dell EMC has been extremely vocal about its new partner programme and strategy, claiming its channel programme is the best in the world. Kurian remains unconvinced about his rival's offering to the channel and customers.
"We see Dell and EMC's merger as a complete opportunity for NetApp," he said. "We're gaining share at their expense, both because of the innovation portfolio that we have, as well as our focus and execution in the market. I think they've got several phases of rationalisation to take on and those partners who choose to work with us are going to continue to see success in the market, because we keep winning in the market."
NetApp is not immune to industry chatter about acquisitions, with many onlookers frequently suggesting it might be snapped up by a larger firm. When asked how he feels about this sort of commentary, Kurian said: "We're going to continue to focus on our customers and the innovations they are looking for. I think the results speak for themselves. There is always commentary and my own view is that it is most important to focus on what the customer wants so we are going to stay focused on that."