Accelerated Sales Growth
NetApp Cloud Data Storage Company
NetApp is a global enterprise storage and data management solutions company based in Northern California. In 2009, NetApp had $4 billion in revenues and 7,000 employees
worldwide. Although the company was growing, it was also facing significant challenges. Through a consultant’s study, leadership came to realize that their customers were changing how they purchased data management solutions. Instead of buying direct from vendors like NetApp, they started to buy from third party intermediaries that packaged storage solutions with other hardware and software, providing a bundled solution to clients. These third party aggregators and integrators represented global partnering opportunities for NetApp. However, senior leaders had struggled to develop a new go-to-market sales strategy that could gain traction with these partners. As a result, the company began to lose market share relative to its largest competitors. Senior leaders also realized that the company's direct sales approach resulted in one of the highest cost models in the industry, yielding lower margins and profitability than its competitors. With slower growth, and lower profitability, NetApp’s stock price and market cap dropped, leaving it vulnerable to a takeover.
Kotter International Engagement with NetApp
In May of 2009, NetApp senior leaders engaged Kotter International to help achieve three strategic initiatives:
The team at Kotter International began working with NetApp senior leaders to increase the level of true urgency in the company, with a focus on field operations and sales. Although the NetApp senior leadership team and field operations leaders saw the real risk of being taken over, they also saw a window of opportunity to become the #1 storage device company in the emerging cloud computing market. Kotter International helped NetApp gain focus and urgency around this opportunity, and as a result 65% of all field operations personnel worldwide volunteered to actively help. The Kotter International team then advised NetApp leaders on a process for harnessing employee energy and innovation in a coordinated way that would accelerate NetApp’s top strategic initiatives.
- Grow market share
- Diversify pathways through the implementation of global partnerships
- Drive efficiencies to achieve lower operating costs
Results Achieved by NetApp
Over 21 months, the results achieved by NetApp were extraordinary:
- Market share accelerated to #2 from #5 in the market.
- Sales through partners grew by 55%.
- Gross profit grew by 22%.
- Operating income by grew 305%.
- Market capitalization grew by $14 billion.
- Revenue growth accelerated by 44%.