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NetApp: 'We're Winning'

Network Appliance says its financial results from last quarter show its strategy to become more of a SAN and enterprise vendor is working. (See NetApp Reports Earnings.) And they attributed a successful quarter to larger deals involving systems rolled out in the past 15 months -- the FAS3000 the FAS6000.

"I would just keep it simple -- we are winning," NetApp president Tom Mendoza said Wednesday night on a conference call with analysts. "We are winning big deals, big opportunities we were not even in before. We are getting invited into big deals that we were not invited to before."

As evidence of this, NetApp execs say they landed their biggest deal ever last quarter -- a $12 million contract with a federal agency. They also reported another deal worth over $10 million and several between $5 million and $10 million. Overall, NetApp reported 70 percent of its income from "enterprise-class" customers -- up from 58 percent the previous year. When asked by analysts last night, NetApp officials would not divulge names of any of the new customers.

NetApp reported revenues of $621.3 million for the quarter, up 39 percent from last year. This compares to flat systems revenue for its major competitor EMC last quarter and five percent year-over-year growth by its next largest competitor Hewlett-Packard. (See Tucci: EMC's Problems 'Self-Induced' and HP Announces Earnings.)

NetApp CEO Dan Warmenhoven has made it clear in recent months that he expects to transition from a pure NAS play to more of a SAN and enterprise vendor. (See NetApp Solid On SANs.) Warmenhoven says the average capacity of systems shipped increased sharply last quarter, up nearly 60 percent on the midrange FAS3000 and nearly 27 percent on the new enterprise FAS6000 from the previous quarter. He says NetApp shipped more than 100 FAS6000 systems in its first full quarter of availability. (See NetApp Scales Up.)

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