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NetApp 'Kinda Screwed Up'

Network Appliance Inc. (Nasdaq: NTAP) execs insist the problems causing their disappointing sales last quarter were self inflicted.

CEO Dan Warmenhoven Wednesday night repeated the claim he made two weeks ago that a product transition rather than competition hurt NetApp last quarter, and he took the blame for the poor timing behind the rollout of the FAS3000 midrange system (see NetApp Sags in the Middle and NetApp Promotes SATA).

Warmenhoven did admit an attempt to step up midrange SAN competition with EMC Corp. (NYSE: EMC) played a big role in the blunder.

This is increasingly becoming a two-horse race,” Warmenhoven said of the midrange storage landscape. “We’re becoming an alternative to EMC. The mix has shifted from file server NAS to Fibre Channel across the board, and we’re taking it to them. We’re the only two vendors that offer the complete array of low end to high end, primary and secondary storage, SAN and NAS. We’re competing across the board.”

Warmenhoven insists, though, that it was neither EMC nor a comebacking Hewlett-Packard Co. (NYSE: HPQ) that hurt NetApp last quarter (see HP CEO Calls for Better Storage). He says the FAS3000 hurt sales of NetApp’s higher-end FAS960 and NearStore disk backup products. Warmenhoven says customers wanted to evaluate the new systems before making any buying decisions, and there were too few evaluation units available when NetApp announced the product in May.

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