Company's Profile: Netgear

Location
HQs in San Jose, CA; 25 offices in the world

History in brief
The company, now public, was founded in 1996 as a subsidiary of Bay Networks, purchased by Nortel in 1998 and becoming independent in 2002. It entered really in storage in May 2007 after the acquisition of Infrant Technologies, involved in NAS for SMBs, in May 2007 for $60 million. Before that, it resold low-end NAS from Zetera with relatively poor quality.

Note also that Netgear acquired in January 2010 for $2.1 million certain IP and assets of Leaf Networks, in peer-to-peer VPN technology that enables NAS users to remotely access their devices.

Financial figures
Global revenues were $1.18 billion in FY 2011 ended December, as compared to $902 million in 2010, a 31% yearly growth, with net income of $91 million and $51 million respectively. The company targets $2 billion by year 2014. Revenues were $326 million for its most recent quarter, 1Q12, a 16.8% year-over-year growth, with a corresponding $28 net income.

"Our Commercial Business Unit revenue was down 11% sequentially, and down 6% over the prior year quarter, reflective of the continued fallout from the Thailand floods in 2011 and the resulting impact to the storage market," said Patrick Lo, chairman and CEO, commenting 1Q12 results. "We saw some HDD shortage in 4Q11 an raised the prices of our NAS, but without increasing profit. The situation is now improving," told us more recently Andrew Meyer, senior director of product and marketing, Consumer Business Unit, Netgear.

Network storage represents around $100 million in 2011 or 8% of total sales, an amount growing 15.1% compared to 2010 (and 51.3% from 2009 to 2010). The goal is to reach $120 million this year. In this segment, Europe represents 45%-50%, North America 35-40% and AsiaPac 10%-15%.

Products
Netgear is primarily focused in the home and SMB networking market, including wired and wireless technology, switching being its core business. NAS and their own software are designed by a dedicated engineering team with about 20 people in USA and some other in China for testing.

All products are assembled by several outsourced manufacturers in Asia and sold without or with HDDs coming from Seagate and WD, SSDs from Stec.

The firm offers a broad range of external or rack-mounted under the name ReadyNAS from one to twelve drives with X-RAID2 technology and also units for the surveillance market.

Its most recent product is a 2U enterprise unified NAS/SAN product, the ReadyDATA, with 12 bays (1TB, 2TB or 3TB SATA or SAS HDDs or SSDs) scalable up to 60 drives or 180TB with 4U expansion unit. The RAID-0, -1, -5, -6 or -10 system has two 10GbE ports for iSCSI support. Thanks to its OS based on ZFS, it includes data replication as a standard feature, but also thin provisioning, compression and de-dupe of block and file, unlimited snapshots, with virtualization certifications from VMware, Microsoft and Citrix. List price is $14,000 with 12 SATA HDDs with a North American street price estimated under $10,000.

NAS shipped
109,000 units in 2011, +57% from 2011; number one last year in WW unit share for NAS that cost less than $25,000, according to Gartner.

Roadmap
To focus on prosumers with system containing 2 to 6 drives; rackmount versions for SMBs; adding Thunderbolt interface; next product being a "smart network like Apple Store".

Main distributors (no OEMs)
Tech Data and Ingram Micro, all NAS being sold indirect, through the distribution channel.

Competitors
Qnap, Synology, Buffalo, Thecus, EMC/Iomega, HP