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Summary:

Shares of Violin Memory stock closed their first day of public availabiity at $7.02, down 22 percent from the morning’s initial asking price of $9 per share. However, CEO Don Basile is confident the market will come around in time.

NYSE violin
photo: Violin Memory

Violin Memory has had a rough opening day as a public company — seeing its stock (listed as VMEM on the New York Stock Exchange) closed the day 22 percent down from its $9 per share opening price — but CEO Don Basile (pictured above in the center) says he’s confident the company will prove its value in the long run.

Asked about the poor performance of the company’s stock during a phone call on Friday, he shrugged off any concern that it’s indicative of the company’s prospects. “It’s all about the psychology of the market [on any given day],” Basile said. “… We’re playing a long-term game.”

He touted the company’s continuous revenue growth, as well as the fact that the company isn’t locked into a particular customer (or handful of customers) or industry for too big a chunk of its revenue. Basile did note the immense value of its now defunct reseller deal with HP — it helped the company boost revenue by 500 percent in the first year — but added that it has been seven quarters since that deal accounted for a significant portion of Violin’s income.

And if Basile is right in his assessment of the flash storage market, other smaller vendors that have floated the idea of an IPO (such as Pure Storage and Nimble Storage) should be rooting for Violin to continue growing. There’s increased competition from large storage vendors such as EMC and, now, Cisco, and Basile thinks any success Violin has against the incumbents will prove the small guys can compete and boost excitement around future flash-storage IPOs.

Regardless of what happens going forward, though, Basile is spinning the IPO itself as a triumph. “We’re excited to be public,” he said, noting the small percentage of companies that ever reach this point and the relatively short 3.5 years between Violin’s first funding and its public offering.

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  1. Gone are the days when companies had to show a few profitable quarters before thinking of going public :)

    But, seriously, someone should have quizzed the CEO on his annual $18 mn. pay package when the company itself was running up a ~$110 mn loss…

    1. Wow -> $18M salary for CEO where his company is in $110M loss! Then a failed IPO !!

      God bless America!

  2. this is completely laughable. with all the hot storage properties out there, posting huge organic growth qtr over qtr numbers, violin has to rush for an IPO because the CEOs bonus is tied to all whilst teetering on the edge of business failure a few quarters from now. I’m looking forward to comparing Pure and Nimbles numbers to Violin… they’re going to make Violin look like child’s play.

    1. “this is completely laughable.”

      Look at the profile of CEO, his prior experience is United Healthcare & Raza foundries! He does not have any storage experience but he is a CEO of a storage company !!

      http://www.linkedin.com/pub/don-basile/0/131/189

      “this is completely laughable.”

  3. First, one should congratulate any company for making it this far, despite the circumstances of a 20+% drop in the stock on the first day. However, ‘the game’ is far from over and a “long-term game” requires long term thinking which I think is an issue in this discussion.

    One of the problems, I see, is that companies that focus on simply flash storage for performance are missing the bigger picture. A year ago there were only a few players in the cloud and enterprise flash storage market. This has changed dramatically. Today there are so many companies that are competing and producing excellent and fast flash storage systems – that is a very tough market with some very strong competitors like Hitachi, EMC, NetApp, SolidFire, Nimbus, Nimble and Nutanix. Further two strong PCIe flash card players, Fusion IO and Virident, have enterprise reference architectures for running very large databases or virtualization platforms on their cards.

    With regards to the enterprise/cloud array storage systems one sees that some of these companies have transcended the ‘ferrari complex’- meaning focusing wholly on speed. It’s not enough to deliver IOPS and low latencies. There are important technologies that some of these companies are bringing to the table in their systems – quality-of-service guarantees around IOPS, in-line data reduction (in-line de-duplication, compression and thin-provisioning), scale-out clustering that allows incremental scaling of flash nodes in one contiguous storage space, array/ cluster redundancy, non-disruptive upgrades, native volume authentication (around QoS), full support of file system protocols (like NFS, SMB), large scale monitoring of storage and more.

    This was a topic of a recent article I wrote : http://www.digitalcld.com/cld/future-proofing-your-clouds-flash-storage-evaluate-your-clouds-needs/

    So, my observation is that a ‘long term game’ needs ‘long term thinking’ and that companies like Pure, SolidFire, Hitachi and Nimbus have spent a lot of their energies architecting for the long term and have produced very aggressive, feature-rich flash storage systems that will not be easy competition to deal with.

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