Violin Memory released a new line of all-flash-memory storage arrays yesterday, but my recent discussion with CEO Don Basile was all about the company’s future, which he said includes an upcoming IPO and possibly a flash acquisition or two. Fellow solid-state startup Fusion-io is flying high after going public in June, so now’s probably the time for Violin to really make a splash and establish its name.
Basile said his company is planning an IPO for the first or second quarter of 2012, a move that makes sense if you buy into Basile’s view of the world. Unlike Fusion-io, which sells flash components that plug into servers, Violin sells full-on storage arrays consisting of flash memory. Violin wants to disrupt the multi-billion-dollar storage and transaction-processing markets, whereas as Fusion-io is more of a complementary play in those areas.
That’s not a slight against Fusion-io — Basile was CEO there before coming to Violin — it’s just an assessment of the state of the flash-memory-in-the-data-center market. The thinking no doubt is that if Fusion-io can succeed as a public company, the potentially more lucrative Violin can too.
But Violin has one big obstacle in its quest to dominate the flash-storage world. That would be a list of well-funded startups such as Nimbus Data Systems, Pure Storage, Nimble Storage and others that are pushing their own flash-storage arrays and are marketing themselves around prices that rival hard disk drives (see Nimbus’s chart to the right).
By contrast, Violin typically sells high-end gear targeting high-end customers. For example, it has a deal with HP for a massive online transaction processing systems that rival Oracle’s pricey Exadata appliance.
Basile is fine with this arrangement, though. Positioning Violin as a whole-system vendor (Violin owns its IP from chips to software, Basile said) against software companies that do little hardware innovation. (Although, Nimbus Data Systems, at least, confirmed to me that it doesn’t OEM its hardware.) Right now, he said, Violin focuses on the Global 5000, whereas other flash-storage vendors tend to focus on the mid-market. Ultimately, though their paths might cross, he acknowledged.
At that point — if Violin does want to court smaller accounts — Basile said he thinks its current product lineup will do the trick, but he’d be open to buying someone if need be. All the flash activity means there’s a real market for the technology, he noted, and that means there’s some good innovation going on outside of Violin.
Basile probably has the cash to make such a move if need be. Violin has taken in $75 million in
venture capital this year alone, along with $140 million in debt financing, and Basile thinks the company could do $200 million in revenue next year. That would double the $100 million it’s projected to earn in 2011. A successful IPO, of course, would put even more money in the bank.