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NetApp CEO: No Spending Shortfall

Poor IT spending? What poor IT spending? That's the question Dan Warmenhoven, CEO of Network Appliance, is asking a day after his company posted strong revenue and earnings for its first quarter.

Bucking the trend of several other major IT manufacturers, Sunnyvale, Calif.-based storage vendor NetApp on Tuesday reported revenue of $358.4 million, up 38 percent from $260.5 million posted for the same quarter last year. Earnings hit $46.9 million, or 13 cents per share, up 73 percent from last year's $27.1 million, or 8 cents per share.

Speaking to CRN Wednesday, Warmenhoven said two trends helped differentiate his company's financial report from that of HP, which reported a loss in its storage business, and Sun, where storage revenue is up just a few percentage points over the previous year.

First, he said, surveys of enterprise customers have concluded that IT spending should be up about 5 percent this year compared to last. However, many vendors were expecting increases in IT spending of 10 percent to 12 percent.

Second, Warmenhoven said storage growth has been strong for companies such has his and EMC which specialize in this space, but it has been essentially flat for server vendors such as HP and Sun. "Server vendors are concerned about their storage attach rate," he said. "But I feel customers are separating their storage buying decision."

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