Traditionally known for developing on-premise data storage systems, NetApp (NTAP) has moderately transitioned into a more cloud-oriented company to support enterprises in accelerating their digital transformations. This evolution, which started seven years ago with the launch of Cloud ONTAP, has been unstable at times while the company fought to regain market share from leading cloud vendors like Amazon (AMZN), Google (GOOG), and Microsoft (MSFT).The pandemic initially added another layer to the challenge as enterprises prioritized IT security and eCommerce capabilities over data storage. However, the tide is now turning in favor of data storage spending, as evidenced by NTAP’s better-than-expected Q4 results and upside Q1 guidance, as well as Hewlett Packard Enterprise’s (HPE) solid Q2 results, as reported on Tuesday.Beyond the EPS and revenue beats, what stands out about NTAP’s report is the substantial progress and momentum experienced in the company’s cloud services category. For the quarter, NetApp Public Cloud services generated an annualized revenue run rate (ARR) of $310 mln, up an impressive 171% yr/yr and 27% sequentially. This growth is empowered by a combination of new clients and increased spending from existing cloud customers. During FY21, NTAP added roughly 1,500 clients while its dollar-based net revenue retention rate climbed to an outstanding 252%.There are three major offerings that are driving solid cloud services growth: Cloud Volumes, Cloud Insights, and Spot. Cloud Volumes is a fully managed cloud storage product that’s available for Amazon Web Services, Google Cloud Platform, and Microsoft Azure; and Cloud Insights is an infrastructure monitoring tool that allows users to monitor, optimize, and secure public clouds and private data centers. Spot, which NTAP acquired one year ago today, provides cost optimization tools for use of public clouds.