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The data-storage hardware vendor NetApp said today it plans to lay off 500 of its 12,000 employees as part of a restructuring plan. The news came on a day when the company reported disappointing financial results.

The company reported Wednesday that its quarterly profits had fallen by 32 percent.

NetApp may be struggling against the strong headwinds of change in the $100 billion data-storage industry. Many small and medium-sized businesses (SMBs) use software-as-a-service (SaaS) setups, such as Office 365, Salesforce, or Box, and as a result they will not need to buy storage anymore.

Large corporations continue to deploy their own storage, but they are using it in the way Google, Amazon, or Facebook do so. Data sits in silicon, close to the compute resources, in the form of all-flash arrays, hybrid storage, or converged storage. For other data loads, they used software-defined storage systems that run on commodity servers.

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So the market for traditional dedicated hardware storage from the likes of NetApp may be dwindling. We’re likely to see more material effects of these shifts in 2015.

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