Okay, let's get started. I'm Jason Ader with William Blair. Welcome to everybody this morning to our tech talk about NetApp's Public Cloud business. I'm very pleased to be joined by Anthony Lye, who is the EVP and GM of Public Cloud for NetApp, as well as Kris Newton, who's VP of Investor Relations. Welcome, Anthony. Thanks very much, Jason. Great to be here. Good. Before we get going, I need to read NetApp's safe harbor statement. Today's discussion may include forward-looking statements regarding NetApp's future performance, which are subject to risk and uncertainty. Actual results may differ materially from the statements made today for a variety of reasons described in NetApp's most recent 10-K and 10-Q filed with the SEC and available on their website at netapp.com. NetApp disclaims any obligation to update information on any forward-looking statement for any reason. With that out of the way, I also wanted to let everybody know that if you have a question, there's a Q&A box at the bottom. You know the drill. You can enter your question at any time during our talk. We're gonna. Anthony's gonna start out with some slides, and then I am going to ask some questions directly to him. Please enter your questions and we'll try to get to as many of them as we can. I guess that's all the housekeeping. Anthony, let me turn it over to you. Thanks very much, Jason. If we could just put the first slide up. I joined NetApp, it'll be five years next month. My background really has been exclusively in the application development space, building substantial applications in CRM, ERP, human capital management across a number of different industries. I was really excited to join NetApp to really think about what NetApp might be in a public cloud. I think the most important thing that we've been able to do is we didn't just think about storage in the cloud as we had thought about storage on-premise. What we've seen really in the public cloud is a fundamental I think restructuring and reorganization and reimagining of sort of technology, really. What we're increasingly seeing, and it was probably best said by Marc Andreessen, that sort of software is everywhere, and that every company, even if they were born physical, is now digital. We're seeing this huge, I think, increase in companies that are born digital or businesses within companies that were physical that are now exclusively digital. The strategy at NetApp was really to sort of to think about the problem from the lens of the application, not from the lens of the infrastructure. That organizations would increasingly become application-centric and would focus on data and the use of data in the application to increasingly differentiate itself over its competition. Over the last five years, we have organically built and inorganically acquired a number of technologies that position us, I think, very much at the forefront of the cloud opportunity. It's that cloud opportunity that really, really excites us, and we see it as an enormous growth opportunity, and one that increasingly broadens our appeal to our existing customers, to customers on-premise that hadn't purchased NetApp, and the sizable opportunity we see with organizations that were sort of born in the cloud or these sort of cloud natives. If you go to the next slide, just a brief sort of history of what we've accomplished at NetApp over my five years. I think the things to understand are, before we go into the sort of product side of things, is we see opportunities for NetApp with the traditional IT operations organizations. You know, IT, prior to the cloud, was structured in sort of horizontal layers. You would have a networking team, you would have a storage team, you would have a security team, you'd have a database team. What we see in the cloud is IT operations are bridging and extending and migrating their existing infrastructure models over to the public cloud. Uniquely to NetApp, we have also, I think, recognized the position and value proposition of our portfolio to these application-centric teams. The sort of a 90-degree pivot from IT infrastructure into application-centric infrastructures. Here we tend to see a customer that identifies themselves more as cloud ops than traditionally IT ops. Within cloud ops, we tend to see these sort of application-centric teams dividing themselves up into DevOps, into FinOps, into SecOps, where they're sort of constructing a holistic group to manage the SLA, the SLO, and the competitive advantage they get with the application. I want to make sure that everybody understands that this has been a huge opportunity for us, not just to provide safe harbor and to provide, you know, direction and openness to our existing customers, but we are acquiring a sizable number of our competitors' customers who, frankly, have missed the cloud opportunity, who now deny the cloud, who now consider the cloud to be their number one enemy. An enemy, frankly, I would not want to have. The partnerships that we have with Microsoft, with Google, and as of last September now with Amazon, are very unique to us, unique in the industry, and we are taking sizable share as our customers consider the cloud architectures for extension migration or new application development. Equally, we see that opportunity in our competitors' customers. We've thought long and hard about the importance of the channel. While we had built, I think, for many years, a business that was very successful directly selling to the end customers. We have, of course, uniquely captured Microsoft, Google, and Amazon as strategic partners and OEMs or first party partners. Over the last sort of 12-24 months, we've really put a lot of time and effort into the needs and wants of the managed service providers, a new category of partner, global systems integrators, as well as the traditional resellers and distributors. I'm incredibly proud of our numbers. If you look at what we're showing every single quarter, I hope that you're seeing customer acquisition rates, retention rates, and expansion rates that are as good, if not better, than almost any other cloud company. We have really chosen to embrace the cloud fully in our business models. At NetApp today, a sizable amount of our business is what we call pay-as-you-go. We allow our customers to consume on a monthly basis our services as much or as little as they need. We allow and fully support the elastic properties of the cloud. People can use our technology to scale up and to tear down or scale back. As well as providing consumption services, we do provide our customers an annual subscription service. We've embraced all of the various different channels to sell. Of course, the big three clouds themselves sell, serve, and support our technologies and our services. We sell not only directly through the NetApp brand and our existing channel, but we've made conscious decisions to embrace the public cloud marketplaces. We are one of the most significant contributors to the marketplace roadmaps, and we use a sizable amount of the public cloud marketplace functionality to serve ourselves. Next slide. Just a brief history. You know, five years ago, we had investigated our ONTAP technology, and we made a port. We took ONTAP in its entirety, and we ported it to Amazon. That formed the basis of a very successful business we now call Cloud Volumes ONTAP. It's deployed by a customer, managed by a customer through an Amazon Machine Image, and it sells incredibly well to our installed base. What we did, and I think what we did incredibly well and uniquely, was we decided that we wanted to put ONTAP in the cloud to be as good in a public cloud as it was on-premises. What we're talking about is incredibly high throughputs, incredibly low latencies that would allow customers and give customers the confidence to know that ONTAP in the public cloud was as good as it was on-premises, we would give them that absolute symmetry. We didn't just stop at the primary storage. We felt that in this sort of application-centric world, customers would want more than just primary storage, and that they would want us to take care of things like backup and restores, cross-region replications, compliance, data classification, that we would enhance the primary storage with capabilities like caching. We do all of those things through our cloud manager product. We made a bold decision to take a very, very successful enterprise software business, OnCommand Insight, to the cloud, and we reimagined and reengineered the intellectual property of OnCommand Insight to now Cloud Insights, a very fast-growing cloud business. It's done very, very well in that it's helped the OnCommand Insight extend their infrastructures to cloud with Cloud Insights. It's given us a whole new area of opportunity to sell Cloud Insights to companies that couldn't afford to or couldn't deploy OnCommand Insight, whether that's a division or a department of a large company or a small or medium company that previously was sort of unreachable. Then, of course, we made a very sizable decision to acquire Spot, and Spot now forms the basis of our CloudOps platform. You may not know, but we've made four, now five acquisitions with CloudCheckr to bolster the Spot platform. We believe that we are a leader, a significant player now in CloudOps, and we have a very, very strong bench of technologies that serve our customers in automation as well as optimization, spanning DevOps, FinOps, and SecOps. The important thing to understand here is that we chase on a daily basis all of the cloud applications, and we chase all of the cloud application teams. We chase the enterprise applications, we chase high-performance compute workloads. We chase the SaaS vendors as they migrate from SaaS 1.0 colo architectures over to the public cloud. We chase the virtual desktop infrastructures, and we chase applications being built on cloud-native technologies like Kubernetes, and most recently with our introduction of Spot's Ocean for Spark, we're now providing automation optimization services for big data lakes. Next slide, and then we'll go into Q&A. There are four motions, really, Jason, that we target. Our field wakes up every day, our channel and our partners wake up every day, and we try and serve customers across one or more of these particular motions. Our customers, our existing on-premise customers, see the public cloud as a natural extension of their existing infrastructure. They want to use the public cloud for simple things like disaster recovery, backup and restore. They like the elastic properties of the public cloud for things like dev test. For bursting, where workloads require incremental CPU and storage that they can't serve within their own on-premise environments. We help people migrate holistically applications like SAP, relational database workloads, high performance workloads in oil and gas, pharmaceuticals, genomics, financial services, all now see NetApp and NetApp capability as that sort of symmetrical service that they relied on so heavily on premise. We are now running some of the very largest enterprise applications ever created on our platform, on Microsoft, on Google, and now on Amazon. This is where our sort of first party services have really given us this wonderful opportunity for growth. We help people automate, optimize, and secure applications that were built or run in the public cloud. That's really where we focus our Spot offering. Companies that really see the cloud as competitive advantage, companies that want to embrace CI/CD, they want to embrace speed as the biggest differentiator in their businesses. These are organizations that want to move very, very quickly, but are frequently hit by cost overruns, by inefficient and ineffective infrastructure decisions and risks due to misconfigured cloud configurations. Spot plays incredibly well there, and it's been a hugely successful acquisition for us. As I said on the prior slides, we've made a number of other acquisitions to bolster and enhance and increase the growth rates that we see. Of course, we give our customers the ability to normalize their infrastructures across the hybrid multi-cloud, to monitor and manage their environments, to make decisions as to sort of what stays, what goes to the cloud, using Cloud Insights, a technology that was sort of based on a very successful enterprise platform that was used by probably 75% of the Fortune 1000. We've now replatformed and reimagined that as a fully enabled multi-tenant cloud service, giving us reach to more and more customers. These are our plays. We feel that we do address all the entire spectrum of opportunity on the public cloud. I think, honestly, Jason, you know, what we did was we wanted to make the cloud a first-class citizen. I think unlike all of our existing or traditional competitors, we made that bold move, and we made it early, and we were able to demonstrate to Microsoft, then to Google, and now most recently to Amazon, that we could deliver a service and we could deliver capability at cloud speed, and we would understand and embrace the sort of the fundamental dynamics and attributes of a public cloud. Let me pause there, Jason, and see if there are any questions or how you want to proceed with the conversation. Yeah. I've got a list of questions, and then again, for the folks on the webinar, please enter your questions in the Q&A box if you have any. Maybe to start out, Anthony, that was a great level set on kind of what you guys have built and you know how you've kind of fashioned this business over the last five years under your leadership. My first question is really just what are the critical factors that drive customers to adopt public cloud from NetApp? Is it a workload level decision? Is it a business model kind of directive or maybe like top-down CIO saying, "We got to go to the cloud first. Yep. You know, we wanna maybe work with folks that we know. Yeah. No, it's a great question. I think we, the honest answer is we see both. We see companies that are making sort of top-down, cloud-first or cloud-only decisions. These, honestly, Jason, are largely made in partnership with one or two or three of the big public clouds, and we are brought in to help the public clouds with application migrations. Here we chase the sort of the traditional IT infrastructure teams who are tasked with the cloud-first or cloud-only mandate. Now, even with that top-down mandate, companies tend to sort of move on an application or workload basis. Let me just point out the difference. An application is in itself, it's an entirety like an SAP and all of the surrounding services. A workload is a sort of a subset or a subcomponent of an application like disaster recovery or backup, where they may leave the primary application on premise, but they'll use the public cloud as a secondary. They'll migrate part of the application environment, and we help people do both. Now, second, you know, we've probably, like everybody else, increasingly see that public clouds more than anything else have sort of democratized infrastructure, and that now more and more companies are able to take advantage of technologies that were once only available to the largest companies in the world. We're starting to see more devolved decision-making within companies. Increasingly, the line of business that was either born physical is now building applications to complement physical with digital, or we're serving companies or businesses that were born digital. The line of business creates these application-centric teams, and we chase these application-centric teams around our CloudOps Spot story. What's interesting is between the two, you know, think of Cloud Insights as a way that allows those customers to normalize these complex hybrid multi-cloud environments and manage their cloud opportunities and their on-premise opportunities with data. Okay, great. I know there's a bunch of other vendors out there in storage that offer kind of the data center extension type of approach, but the first party services do seem pretty unique to NetApp. Can you give us some examples of kind of NetApp primary file storage in the cloud? What types of applications are customers using NetApp primary storage in the cloud through one of the three public cloud partners that you have? Yeah. You know, just to sort of ground everybody with the product names, we started off building a service with Microsoft that's called Azure NetApp Files. It is available now in probably more than 35, maybe 36 Azure regions. It's one of the most successful and fastest growing Azure services. We are often coined by Microsoft, the platform that migrates the un-migratable. Typically, you know, people are bringing us in to migrate very sizable enterprise applications that had file-based dependencies. Probably the most significant and well known of these is SAP. We are used extensively by SAP and SAP customers to migrate SAP applications from on-premises to the cloud, whether they are Oracle-based SAP applications or increasingly the more modern HANA-based applications. We're used also extensively to help people with Hybris, SAP's e-commerce application, SAP's BW, the data warehouse application. We do a sizable business in helping companies migrate SAP workloads from on-premise to the cloud. It doesn't stop there. We help people with Oracle, with VMware-based applications. I said we help people in oil and gas, pharmaceuticals, genomics, migrate or extend their sort of high performance computer applications. You know, Repsol, Energy, Chevron, organizations like this use us extensively. GlaxoSmithKline, all of these organizations rely on our enterprise-grade infrastructure in the public cloud. Virtual desktop infrastructures, you know, a very sizable market that was sort of dominated by a Citrix or a VMware on-premise, is now, with this pandemic, aggressively moving over to public cloud, where they see the elasticity and the distribution of regions far more advantageous to virtual desktop infrastructures. We're platforming Citrix, we're platforming Horizon, and we're seeing a huge growth opportunity with Microsoft's entry into the virtual desktop infrastructure market with Azure Virtual Desktop and now with Windows 365. It's the enterprise applications holistically or in piece. It's applications in particular industries, like Epic in healthcare or the SAS Institute, Teradata. It's relational database workloads that were so heavily dependent on our technology on-premise that can now use the same technology in the public cloud and the virtual desktop infrastructures. Those are sort of the very common examples that we see with our primary storage platform that's sold, supported, and billed as a first-party service by Microsoft, Amazon and Google. Great. Very helpful. Now, what's the value proposition if I'm a customer and I'm looking at doing that migration like you talked about? Obviously I have options in AWS. I assume that Azure also has a file services or file storage option for primary storage. What's the value proposition for using either Azure NetApp Files or the other FSx or the CVS? Sorry. Yeah, it's a good question. I would say, you know, I think that we recognize that customers have a choice, and I think that benefits the customers. You know, the public clouds will offer block storage, they'll offer object storage, and in some cases they offer fairly remedial file storage. You know, NetApp is the gold standard in file storage, and we have uniquely sort of built a set of capabilities that differentiate our file-based protocols, so much so that the application vendors themselves mandate our infrastructure on the public cloud, and they haven't certified other infrastructures. They do that because I think we have not just a very scalable file system, but we have a rich set of data services that allow us to do things in the context of the application that frankly others cannot. We have built in partnership with SAP a lot of intellectual property that allows us to do backups and snapshots and clones in the context of the SAP application itself, not just the storage. We were and continue to be the gold standard for relational database workloads, and we have a rich set of capabilities that differentiate ourselves to run those particular workloads. We oftentimes compete with, you know, disk, and we're able to show at scale, you know, sub-millisecond latencies. We're able to prove capabilities. An example of a customer was they were running about 40 different database workloads on premium disks, and they switched over to Azure NetApp Files and found that the performance was significantly better of the throughput. They found the latencies on premium disk were somewhere between three and seven milliseconds, with Azure NetApp Files consistently below 1 millisecond. To give you an idea of the data services. Backups, database backups and snapshots on the premium disk were sort of holistic in that they couldn't decipher what was on the disk and were taking several hours. The move to Azure NetApp Files and the use of our ONTAP technology brought those backups and snapshots down from several hours to several minutes. We also provide this rich shaping capability so customers can scale up and down the throughput and the capacity on our file system, a unique capability that isn't offered by any other file system on the public cloud, whether it's the rudimentary services offered by the public clouds themselves or third parties in the marketplace. You know, it's not given to us, Jason. We earn it, but we have, as I think you know, many will testify for 30 years, proven ourselves to be very, very unique and very, very successful in serving the file-based protocols to the applications. You have, I guess, a very tight linkage also with the kinda object-based storage from the. Correct. various partners as well. You can just do backups to S3. Correct. Something like that, right? Yeah, we aren't limited. That's a good point. We are... My team, we build, you know, customer experiences, and those customer experiences aren't just limited to our infrastructure. We will take advantage of, as you said, object storage where it makes sense. Customers can use our primary storage in the cloud, back up to an object store using lowest cost storage that doesn't have the same sort of latency or response time requirements. We do intelligent tiering, so we, for customers, will tier off cold data automatically from the primary volume. Again, constantly optimizing for price and performance. It's that envelope that I think we drive within our sort of product strategy that our customers benefit from. Yeah, think of us as sort of part of what we would call a fabric of infrastructure, and we will of course take advantage of any public cloud infrastructure we can to better our own experience for our customers. Great. Well, let's drill down a little bit into the various first party services that we talked about. With Azure NetApp Files, how are you splitting the responsibilities with Azure? You know, what are you doing? What are they doing, and how long did it take to stand up the service? Yeah. Very simply, Azure NetApp Files is a Microsoft product, and Microsoft and only Microsoft sell Azure NetApp Files. NetApp does not actually sell Azure NetApp Files. Microsoft sells our product, Microsoft supports our product, and Microsoft bills for our product. There is no marketplace transaction. If you are a customer of Azure, then we are a service inside the Azure console. We sit behind the Azure APIs and the Azure CLIs. Customers that have an Azure account can in a few clicks activate Azure NetApp Files. You know, Azure NetApp Files has, I think, redefined, you know, enterprise-grade storage. Microsoft, you know, has been incredibly successful with that business. You know, Azure NetApp Files has unique performance characteristics at very low latencies. I talked about this cloud shaping constructs. The capabilities we've given Microsoft for cross-region replication, backup, and restore. The sort of certifications that we've garnered for Microsoft with companies like SAP, VMware, and other databases. You know, what we do is we build and we run the service, and we of course provide second and third line support to Microsoft. We are the sort of engine. We code directly into the Azure console. We provide the solution, and we manage the releases, the updates, the patches. Of course, these are all transparent to customers as it's deployed as a fully managed service. Our file system operates much like dial tone. It's always there, and customers can consume as much or as little of it as they want. Microsoft is really the front end. Microsoft handles selling, supporting, and billing, and we manage, we build, engineer, run, and deploy the services into Azure on a continuous basis. My understanding, at least as we talk about AWS and what you've launched there in September, my understanding is that it's somewhat different in terms of how it's structured, though I think with Azure NetApp Files at least, I think it's correct that you actually have built the hardware there off- That's correct. The hardware. Microsoft and NetApp wanted to build what we call a scale-up architecture. Public clouds were built in what the industry calls scale-out, and we wanted to capture the enterprise applications that had a dependency on scale-up infrastructure. In Azure, yes, there is NetApp physical infrastructure that forms the basis of Azure NetApp Files that gives us these wonderful performance characteristics at these incredibly low latencies that we engineered together. I'll tell you know, all credit to Microsoft, we challenged Microsoft around networking infrastructure and networking architectures, and Microsoft made conscious decisions to engineer top of rack switches and its networking architectures to really give us this unique and compelling experience that we pass on to customers. Now, with Amazon has a platform called FSx, and it's used today to support a very simple Windows server and as sort of a scale-out Lustre product. ONTAP is now a first-party service within the FSx framework. While we build and engineer the service, Amazon sells it, Amazon supports it, Amazon bills it. It is like Microsoft in the console, the Amazon console. There isn't a marketplace transaction for FSx for NetApp ONTAP. It's behind the Amazon API and the Amazon CLI, which I'll tell you, much like Microsoft, Jason, look, being on the inside looking out is quite different to being on the outside looking in. What I mean by that is Amazon and Microsoft embrace us like any of their own services. With Amazon, you're seeing just recently our integration with Lambda, our integration with SageMaker, our integrations with CloudWatch. We start to get access to all of the other Amazon services, bettering our experiences for our customers. Now, the unique thing is, because Amazon has the FSx control plane, Amazon actually runs the service, but we deliver and engineer and provide backline support. Some small subtle differences. Honestly, for the customer experience, they wouldn't really know nor understand these subtle differences. Think of ONTAP as a fully managed service like this sort of dial tone analogy that we build and we engineer in partnership with Microsoft, with Amazon, and with Google. Okay, that's clear, kind of some of the similarities and differences. When you talked about Azure NetApp Files, you talked about a lot of SAP, a lot of kind of, let's call it, I don't wanna say legacy workloads, but, you know, relational databases. Yeah. You know, sort of existing apps. With FSx, would you say it's more targeted towards more cloud native type stuff or similar? No, I would say both of them. I would say, you know, look, if you think about the value proposition of file, it probably has more historical value, which would probably push it more into the legacy. I think it's very clear to us that we can capture a sizable part of that legacy as customers extend on-prem or migrate on-prem, whether it's NetApp or non-NetApp. That value is very much consistent across our offerings on Microsoft, on Amazon, and on Google. We're going for that business. You know, what some people call, I think McKinsey called it, the rejuvenation of the enterprise. We wake up every single day, and we go talk to customers that have a file dependency on-premise, that expect or demand that same dependency in the public cloud. Now, on the other side of that, we now see these sort of cloud native, born in the cloud applications that are using container-based technologies, using CI/CD as their release process. They're using Kubernetes. File has a very, very significant role to play in Kubernetes. We have engineered a capability that we call Astra that sits on top of our storage, that purposes our storage to the applications that run within a Kubernetes framework that require application-level data protection, that require things like backups, that require capabilities like disaster recovery. We've engineered our file system to be highly attractive to these cloud native applications. Today, you know, Azure NetApp Files is integrated with the Azure Kubernetes Service. FSx for NetApp ONTAP is integrated with the Elastic Kubernetes Service on top of Amazon. Think of our file system not divided by vendor. We provide the same set of services on Microsoft and on Amazon that attract the legacy customers and increasingly the born in the cloud customers. Gotcha. Just real quick on the P&L impact. Is there kind of a noticeable difference in terms of profitability for you just because in the case of Azure, you have the hardware that you sell into that? No. I mean, first and foremost, we don't really detail this. You know, yes, with ANF, we supply the software and inline storage, and we're compensated for both on a monthly basis based on the sold capacity. We do deploy systems into Azure clouds, and their depreciation will go against our COGS. It's a premium service. There's a very nice price point, and we frankly benefit from a very profitable royalty stream. For FSx, it is, and the rest of our portfolio is increasingly software only. It runs in FSx natively on the Amazon infrastructure, and we're compensated for the software. There's no depreciation to go for COGS. As we've stated very clearly, we think the overall blended margin is the most important thing for us to look at and analyze as we provide these sort of rich services that cater for the various different customer types and the various different applications. We've stated very clearly, I think that our margins are in the cloud business ahead of the blended margins of our traditional on-premise business. We're very comfortable and confident that there are gross margins on cloud, and cloud services will continue to increase as we reach scale within Microsoft, Google, and Amazon through the sort of the blended hardware and software solutions that we build. Gotcha. I know you don't wanna maybe pick between your children here, but do you feel like AWS, just given that it is, you know, the bigger... let's call it the bigger cloud right now, do you feel like that has more long-term potential? You know, the fact that it is, Amazon does just so much in storage right now, do you feel like that has more long-term potential, or is it sort of a tough call? Honestly, Jason, you know, I wrote down, you know, my children. I can't wait to tell Satya and Adam that you referred to them as my children. I sometimes feel like a mouse dancing with elephants. These are formidable companies that have growth trajectories and market impacts, the like of which we've never seen in the technology industry. I mean, you know, I was at Oracle for many years, and now Amazon is rapidly approaching double the size of Oracle. You know, Amazon started in 2006, and Oracle was founded in 1997. We work incredibly hard to provide a service to these organizations. We see huge opportunities, honestly, across all three. I wouldn't highlight any one versus the other. I think, you know, Amazon obviously really was the first, and Amazon has defined a lot of the sort of the capabilities now that you'll find in other clouds. But each of the clouds, I think, while having a good base, continue to differentiate and innovate in certain areas that give customers, increasingly, I think, the confidence to make multi-cloud an intentional decision going forward, as opposed to an unintentional one that it was for so many years. I would tell you know, we sit here and, oftentimes we have to pinch ourselves. When I joined NetApp, Jason, I never imagined, and I never really thought that we would be in this position. I never imagined that we would get to really deliver something into these public clouds. Nobody else has done this. I mean, honestly, really nobody else has done the level of integration, the first-party services that we have done, not on any one cloud, let alone across all three. It's really, I think, a testament to the capabilities of NetApp making ONTAP itself software independent of hardware. The company has leaned in where many others did not, and I think we've proven to these guys that we are a solid partner and that we bring significant value. All three of them, on a daily basis, Jason, bring us tremendous opportunity for customer acquisition and customer growth. Gotcha. Is it fair to say that part of the business, kind of the first party, you know, Azure NetApp Files, you know, FSx and now the Google partnership, you think that's gonna be the majority of your public cloud business over time? No, actually not. I think we have a strong. I think concept and construct that NetApp itself and Spot are very strong brands, and these are services that we will sell directly into the customer base. You can kind of think about it. I don't know whether it's the right analogy or not, but it's like the razor and razor blades, right? I mean, what we really wanted to do was make ONTAP a cloud product, and we wanted to get the confidence of the entire world that ONTAP was a platform that was cloud-ready and would be widely adopted by public clouds. That has given us not just an enormous opportunity to acquire customers through these massive organizations, but it's given customers the confidence that we can provide incremental services, that we can build technologies and solutions that complement or enhance our capabilities. So no, I would make it very, very clear to everybody here that while we've established a very strong channel, and we see enormous growth through the big three public clouds, channels that are very unique to us, we have an equal opportunity to extend our own brand and our own capabilities directly into the customer base, through, you know, our marketplace products, through our direct sales engagements, and through the existing and growing channel outside of the big three public clouds. So no, we don't have plans to be a provider of, you know, infrastructure to three companies. We want to be a provider of services to tens of thousands of companies. Okay, great. It sounds like it's helped your traditional business as well, just having this, these capabilities in the cloud. Well, I'll tell you, Jason, you know, I get brought into sales deals to present NetApp in the cloud, and I present the absolute, you know, commitment to our customers that we are in the cloud as good as, if not better sometimes, than they could do on-premises. Customers will look at me and say, "It's so great you're so committed to the cloud. I now have the confidence to make more on-premises purchases." They do that because they know that at any time, their investment in ONTAP can move, that they're not constrained or limited to, you know, a fixed decision. It's that symmetry, I think, that's given our customers and frankly, non-NetApp customers, the confidence to move forward with us as a company, whether that's in the cloud holistically, whether that's in the hybrid cloud, or whether that's on-premises. You know, we strive for that symmetry and that openness that I think we've done in many ways better than anybody else has done. Yeah. Great. Okay, we have about 10 minutes left. Got two really good questions from investors here, so I wanna throw those out at you. First is: Can you help us size the impact of all sales members having a separate public cloud quota, how significant a driver is this for NetApp going forward versus your cloud partners selling or your standalone cloud sales force? Yeah. You know, we made a conscious decision to bring in César Cernuda, a Microsoft executive, to run our go-to-market organizations. We felt that we had proven to the company, to the shareholders, to our customers, that we could succeed in a public cloud. We had done so largely by having two independent sales organizations. We wanted to make sure that we presented specialization to the customer, and we gave the customer confidence that we were as committed to the cloud as we were to on-premise. That really helped us establish the beachhead. Now, we've been running this combined model for quite a few quarters. What we really started to see was, we started to feel that there was a position for us higher in the organization, and then we would provide specialist organizations like in the sort of the control plane that would serve through the specialists. We've taken now a sort of a parallel sales organization of infrastructure on-premise salespeople and cloud people, and we've essentially put the infrastructure teams on top of the specialist teams. Selfishly, what that gives me, Jason, is thousands of people who now wake up with cloud on their quota sheets, with cloud driving their compensation. Outside of a very small number of companies that probably don't buy cloud, every single one of our sellers, every single one of our solution engineers, every single one of our channel partners is now highly incented to sell cloud alongside their existing on-premise infrastructure. Frankly, in a few accounts, in a few market segments, we only sell cloud. You know, when we sell to, you know, these unicorns, these organizations that were born in the cloud, we don't lead with an on-premise construct. We don't mention an on-premise construct, but we have very strong cloud tools. So think of us as selling, you know, hybrid infrastructures to the enterprises, the global accounts, with specialists that can come in and talk competently about any one of our particular motions and the technologies that support them. Then reaching new opportunities in our competitors and in these companies that didn't have on-premise infrastructure, where we take a strong position and lead increasingly with cloud. It's you know, if you think about, you know, a Dell EMC customer, I have to believe that they, like a NetApp customer, are facing cloud economics, are being challenged to prove innovation and disruption using a public cloud. They come to us for that, because their existing vendors have not done the same thing that we've done. Every single one of our sellers now has a public cloud quota, and we think that's really starting to show up now in our quarterly earnings as we continue to see the public cloud revenues grow. We've put a lot of emphasis on customer success and customer satisfaction, and I hope you're all seeing that in the revenue retention and expansion numbers that we also publish on a quarterly basis. Great. And actually that leads into the next question, a financial question, which is, you've had a strong record of net retention, but it seems like existing customer expansion has driven all of the growth in the October quarter versus the July and April quarters, whereas new customer ARR seems to have slowed down. Do you expect new customer ARR to re-accelerate as Amazon FSx ramps up? I can't comment on the details of that particular quarter month 'cause that's not the impression or what the data would suggest internally. We see a very healthy mix of new customer acquisition and existing customers doing more. You know, I'll tell you in the cloud, you know, selling something to somebody is where the relationship starts. Cloud is very much, you know, a pay-as-you-go elastic capability. You know, Jason, we're not really selling petabytes upfront. People aren't capitalizing their infrastructure. Customers can come to us, and they can onboard a few megabytes or terabytes, and they can test the service and run the service through a variety of different, you know, harnesses to get confident with the service. We tend to see a sort of customer onboarding experience that sort of starts with a small amount of data. They run that data through a whole series of processes, and then oftentimes they back it off. They're backing it off the environment now because they've done all the necessary benchmarks, and then it flows into their deployment infrastructures and their deployment decisions. You know, people don't just wake up on a Friday and decide to migrate SAP to Azure over the weekend. That's something that takes many, many months, that's almost always done in partnership with a large global systems integrator. Think of our customer acquisition as sort of being the first in a lengthy relationship that we try and establish with them. But the first transaction that we do with our customer is small. We try very, very hard to make whatever the customer wants to do or whatever size and scale successful, and we do it, as I said, on an application-by-application basis. We naturally come and expand. Maybe what you're seeing is because we've got so many customers now who have been through the sort of landing process and are now starting to ramp their expansions. That maybe, you know, what you're seeing is the expansions now starting to sort of grow more and more significantly than the lands. Our customer acquisition rates continue to grow as we continue to either develop or acquire technologies that we think are more and more apparent for non-NetApp customers. I don't think you're seeing, you know, new customer ARR slow. You may just be seeing the overshadowing of sizable expansions that are now taking place with very, very significant roll-outs of enterprise applications that may overshadow, but certainly don't distract us in any way from new customer acquisition. Okay. Understood. Now, of course, Amazon. Then there was the comment, do you expect new customer ARR to accelerate as Amazon? Of course. Yeah. Like, literally, you know, it's Christmas when Amazon says, "Oh, we'll sell it for you, and we'll make it an Amazon product." You know, that gives the customer a level of confidence and trust in us that Amazon's endorsement is very special, much like Microsoft's endorsement. They have an ability to affect markets that we don't. Yeah. Do we see Amazon as an accelerant? Absolutely. I mean, Amazon themselves said very publicly at re:Invent that we were one of the fastest-growing and most successful introductions of infrastructure they've ever seen. While we're not publishing specific numbers, they're Amazon customers, we're incredibly ecstatic by the Amazon relationship. It's much like Microsoft. These are very unique things that we've worked incredibly hard for. The Amazon thing didn't happen overnight. It's something we've been engineering with them for more than two years, and I have had to bite my lip on many occasions, not to say anything. September second was a remarkable achievement of, I think, a combination of many years of customer success, of proven customer demand, and I think demonstration that we can engineer a service that stands up alongside any other Amazon service. Okay, great. Well, we have like 55 seconds left. I wanted to see if you had any closing comment or anecdote on how the perception of NetApp has changed in the market since you joined. Any kind of customer quotes or anything like that you wanna share with us as we close here, just to kind of, you know, present the group here with sort of how the perceptions might be changing of NetApp. I think in closing, I would tell you the things that we've done well. I think probably the most significant thing that we did well was George Kurian, you know, our CEO, afforded me the opportunity to challenge the status quo, to reconsider and to reimagine what NetApp might be on a public cloud. Our uniqueness was, as I said at the start, we were able to take a very specific application-centric lens to the problem, and we engineered around the application, which is very different than the way storage was engineered on premise. That, I think, is something that we've done incredibly well. We fully embraced the elastic properties of the cloud. We didn't limit customers to large purchases. We didn't challenge them on subscriptions versus consumptions. We made it as easy to consume our product as any other Amazon service. I think we made a conscious decision to be bigger than storage. We felt that while we had a strong value proposition for the legacy, there was as big, if not a slightly bigger market opportunity in the sort of innovation, opportunity the public clouds brought. We felt that there was a bigger opportunity for NetApp to platform its services more holistically in infrastructure and increasingly in platform as a service. That's given, I think, us and our customers the confidence that we are not just thinking about how legacy transforms to the public cloud, but how innovation itself manifests itself in the public cloud. You know, I would tell you as the person that was given this opportunity, we find ourselves in a very unique position. I think our opportunity is significant. You know, I'm often asked, you know, what do I think of HPE and Dell EMC and Pure and Nutanix, and I honestly can't answer, Jason, because I never see them. I never ever see them in the public cloud. My competition, Jason, honestly, is block storage and object storage and, you know, those are sort of the considerations that customers are making and much like we did on premise, we go out every day and prove the benefits of ONTAP and our file services and the rich set of capabilities that surround them. We're finding, if you look at IDC numbers, we're seeing file storage now really grow very, very quickly in the public cloud. It's about 12%-13% of the total storage share, but growing 2x-3x faster than block and object. We think that NetApp can arguably take a very sizable share, much bigger share in the cloud than frankly we may have on-premises. Think of us as sort of, you know, kind of all in. We see the cloud as a primary opportunity, not as a secondary opportunity. Thank you very much, Anthony. This was really helpful and enlightening and thanks everybody for joining us. We'll have to leave it there and have a great day. Thanks very much, Jason. Bye-bye.