Mergers and Acquisitions, Mergers and Acquisitions, IT management, Content

NetApp Acquires Spot Cloud Cost Optimization, Migration Tools

NetApp is acquiring Spot for public cloud cost optimization and compute management tools. The deal is expected to close in the first half of NetApp’s fiscal year. Financial terms were not disclosed.

This is M&A deal number 237 that ChannelE2E has covered so far in 2020. See the complete M&A deal list here.

Spot is NetApp's third recent acquisition. The other deals involve CloudJumper for desktop as a service (DaaS) and Talon for software-defined storage solutions. The purchases generally align with NetApp's push beyond traditional on-premises storage toward public cloud and hybrid IT data management.

Moreover, the purchases have channel-centric business models. CloudJumper works closely with MSPs (managed services providers). Similarly, Spot works closely with technology, MSP and reseller partners.

In a bold prediction, NetApp says Spot and associated tools "will help customers save up to 90 percent of their compute and storage cloud expenses, which typically make up 70 percent of total cloud spending, and will help accelerate public cloud adoption." NetApp did not share specific details about how partners and customers can achieve such dramatic cost savings.

NetApp Acquires Spot: Executive Perspectives

Amiram Shacha, founder and CEO, Spot
Amiram Shacha, founder and CEO, Spot
Anthony Lye

In a prepared statement about the deal, Anthony Lye, senior VP and GM, public cloud services, NetApp, said:

“In today’s public clouds, speed is the new scale. However, waste in the public clouds driven by idle resources and overprovisioned resources is a significant and a growing customer problem slowing down more public cloud adoption. The combination of NetApp’s leading shared storage platform for block, file and object and Spot’s compute platform will deliver a leading solution for the continuous optimization of cost for all workloads, both cloud native and legacy. Optimized customers are happy customers and happy customers deploy more to the public clouds.”

Added Spot CEO and Founder Amiram Shacha:

“Spot was founded with a vision to revolutionize the way companies consume cloud infrastructure services, using analytics and automation to deliver the most reliable, best performing and most cost-efficient infrastructure for every workload on every cloud. We look forward to joining the NetApp family and building together the future of Application Driven Infrastructure and helping customers to deploy more workloads in the cloud.”

NetApp Business Evolution

NetApp recently disclosed Q4 2020 financial results. Among the key metrics to note:

  • Revenue of $1.40 billion, compared to $1.59 billion in the fourth quarter of fiscal year 2019.
  • GAAP net income of $196 million, compared to GAAP net income of $396 million in the fourth quarter of fiscal year 2019.

NetApp blamed the revenue weakness on the coronavirus pandemic and associated economic fallout. Still, there were signs of progress. For instance, NetApp's cloud data services annualized recurring revenue reached $111 million, up 113 percent year-over-year.

Joe Panettieri

Joe Panettieri is co-founder & editorial director of MSSP Alert and ChannelE2E, the two leading news & analysis sites for managed service providers in the cybersecurity market.