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Summary:

Violin Memory has filed for a $173 million initial public offering, although it did so without much of the hype traditionally associated with Violin news. The company is on pace for $100 million in revenue this year, but it’s now part of a crowded flash market.

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photo: Violin Memory

Flash memory storage pioneer Violin Memory has finally filed for its initial public offering. More surprising than the filing — Violin has been promising it would come for years — is how quiet the company has been about it.

Violin has not been shy about touting its huge investment rounds or putting advertising signage all over airports, but its IPO press release on Monday crossed the wire with little more than a whimper.

Arik Hesseldahl at AllThingsD has some insightful thoughts as to why this might be, including that CEO Don Basile stands to make millions more if the IPO completes by the end of September, and that Violin lost a major source of revenue last year when a reseller deal with HP ended. Violin noted the impact of that deal in its S-1 filing, noting that:

In fiscal 2012, Hewlett-Packard Company, or Hewlett-Packard, represented 65% of our total revenue, while in fiscal 2013 and the six months ended July 31, 2013 Hewlett-Packard represented less than 10% of our total revenue. … [O]ur total revenue declined $11.7 million, or 53%, from $21.9 million for the three months ended January 31, 2012 to $10.2 million for the three months ended April 30, 2012. Nearly the entire decline in total revenue during this period was attributable to a decline in orders in fiscal 2013 from Hewlett-Packard, a systems vendor customer.

There are possibly other issues at play, too, including the steady increase in competitive pressure in Violin’s market. At one point, it was largely compared with Fusion-io, although Fusion-io traditionally sold server-side cache appliances rather than full-on flash-based storage arrays like Violin sells. Today, however, not only has Fusion-io moved a little more into Violin’s space (and appears to be struggling two years after its IPO), but major storage vendors such as EMC, NetApp and IBM have moved into the flash space, too. There’s also a whole suite of startups, arguably led by Pure Storage, selling all-flash systems and doing so at a lower price point than is Violin.

Violin’s arrays are designed for large companies, but there are only so many of those to go around — especially with those mega-vendors now in the fold. Violin’s two biggest customer, according to its S-1, are resellers putting Violin systems into the data centers of government agencies and “a large global retailer,” respectively.

Basile claimed in March 2012 that Violin was valued at $800 million. It aims to raise $173 million in its IPO and will trade under the symbol VMEM. Toshiba is Violin’s largest shareholder and also its sole supplier of flash memory.

  1. Man! Read the S1 get your FY, CY in order. Look at the actual numbers in the financial summary. For example: you make of context statements about a Q from almost year and half ago. You talk about desolution of a deal with HP which was not brining any value as a bad thing. You mix IPO proceeds with enterprise value in the same sentance. Anybody with one semester of finance will laugh at this.

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