Name: NetApp CEO: Companies investing in technology do well in an economic downturn
Uploaded: 2022-09-14
Duration: 8 min 13 s
Description: George Kurian says NetApp’s data and cloud services enable companies to pivot and adapt quickly.

George Kurian says NetApp’s data and cloud services enable companies to pivot and adapt quickly.

NetApp CEO: Companies investing in technology do well in an economic downturn

Leadership

NetApp CEO: Companies Investing in tech do well in downturn

NetApp CEO: Companies Investing in Technology Do Well in an Economic Downturn

George. Thank you so much for joining us to talk about your company. Net app. You know you've made so many dramatic changes at your company since you became Ceo in 2015. Can you tell our viewers in a simple way, what does Net app do today? Netapp is a Fortune 500 company. We help organizations store protect and use their data for competitive advantage. Today we are a part an integral part of the world's leading public clouds as well as some of the most advanced artificial intelligence environments in the world. Well, many of your companies are big tech companies like amazon and Microsoft alphabet facebook and many others. Why do they turn to Net app? What is the biggest service that you provide for them? I think over the last several years we've seen two important trends in business. One is the idea of a technology enabled business strategy as opposed to a business strategy supported by technology. And people talk about the idea of digital business as you know, as a common metaphor for it. And the second was the use of data and the cloud as enablers to deliver upon technology strategy, technology enabled business strategy. And we have done really good work to bring our industry leading data management tools not only to customers data centers but now also available on all the big public clouds like you mentioned. You're absolutely right. We hear from C. E. O. S saying that they're making more investments in technology and automation, partly for the innovation that comes with it but also to reduce their costs and to grow their companies. Especially now as the U. S. Economy is weaker, inflation keeps rising. What does this trend mean for Netapp? And We've been fortunate, we just recently reported the first quarter of our fiscal year 23 and revenues were up 9%. Our public cloud business grew really strongly to growing 73% year on year. So we're really excited about the two men trends cloud and digital and data as key enablers of our business. I think the points you made susie were exactly what I hear from our clients which is about flexibility to respond to a volatile economic and geopolitical environment and speed so that you can sort of pivot and deliver on what customers expect from you quickly. Well can you give us an example of one of your customers why they came to you and the critical breakthrough that you provided for them? Yeah we've been fortunate to work with DreamWorks. They are the company that makes so many beloved movies and you know probably your viewers are probably aware of the movie, the bad guy. It's a DreamWorks animation film that has recently come to market. And you know these films take four years to develop and produce and in the the middle of the creation of the bad guys you had Covid impact all of you know the world. And so DreamWorks was forced to enable their creators, their animators and there you know technologies to have to now work in a hybrid working environment and they decided to use cloud based technologies To enable all their creators to work together. And Netapp was a key part of enabling all those animators to work together. So that about 20% of the bad guys was developed entirely on the cloud. And we were really important part of enabling that. Well, that sounds very exciting, and it also sounds like you're helping companies to in some ways disrupt their own business model and come out ahead. Right? Absolutely. Digitization is in some ways the disruption of a traditional approach to doing business based on what your customers want. You said a moment ago that you reported a record numbers with your financial results, Are you able to deliver on all the new business that you're getting? Because we hear so much about supply chain issues for so many companies. Do you have any supply constraints? We had supply constraints in the past quarter, we have tried so hard to meet all of the demand, but demand was still ahead of supply. Rethinking the global supply paradigm has been one of the important lessons that we've had to embrace over the last few years to create more flexibility to source parts from different parts of the world and also to make our, you know, systems be more like lego building blocks so that you can compose it and make it available to customers as the parts come in. So you're saying that those supply pain points are less of an issue for net app right now there are less than they were a year ago but they're still not we're still not able to meet all of the demand that we see. So we still have got work to do for a few more quarters. Are there any other headwinds that you're concerned about? The macroeconomic environment is uncertain. I would say that you know there are puts and takes to it. I think that G. D. P. Growth, for example has certainly come down relative to what we saw, you know, a few months ago. On the other hand, job growth continues to be strong as even the most recent economic forecasts indicate. And so what we're trying to help our clients do is to use technology like mentioned to these to help automate their business to bring advanced capabilities like artificial intelligence to help them progress their business even in an uncertain economic landscape. I understand that net app is hiring, what you're thinking on hiring right now in this uncertain environment that we're in, we're gonna continue to hire for the most important growth areas of our business. We continue to believe strongly in the growth of our business, especially of our cloud business. We think we're at an inflection point in the, you know, sort of the scaling of that business and we're going to keep investing in that part of our business. We are being disciplined about, you know, other parts of the business where we don't see as much opportunity and so it's really about portfolio management that, you know, our philosophy of that is you've got to invest where, where you see the growth and if you don't see it you don't invest George. You've been ceo during up cycles and down business cycles. What have you learned about leading in on certain times like we're going through right now, I think being clear about what's most important so that you can pivot the business quickly to that and be second communicate and be transparent with employees so that they have confidence and trust in leadership that you won't mislead them. And that is important to to be transparent even when things aren't good because I think that's when they really want you to be transparent with them and the third is to stay balanced, you know, so that people feel that there's a steady hand at the tiller and that you're going to guide people through this. Listen, we've learned a lot of lessons through the covid pandemic. I feel if you could guide a business through that and do well, it certainly, you know, any recession would be or any sort of adverse economic cycle would be far less impactful than what happened during covid