It’s not your everyday startup CEO who shows up at Xconomy San Francisco’s office in cowboy boots, claims that he’s going to take over a $23 billion industry, and then hints that an IPO is in the offing. But that’s exactly what Donald Basile, CEO of Mountain View, CA-based Violin Memory, did this Tuesday.
The industry in question is external storage arrays—the big disk-based storage devices sold by companies like EMC, Hewlett-Packard, NetApp, Oracle, Dell, and Hitachi. Enterprises use these devices to store virtually all of their primary data—the databases and data warehouses behind their enterprise resource planning system, their human resources system, their customer relationship management software, and all their other critical functions.
Basile wants companies to replace all of those machines with new storage arrays based on Violin’s Flash memory boards, which can read and write data faster than disk drives and therefore have an easier time keeping up with the superfast, multicore processors in today’s corporate data centers. A longtime champion of Flash memory—he was formerly CEO of Fusion-io, the newly public Utah company that makes solid state memory modules for caching data inside servers—Basile is convinced that Violin can outrun the bigger storage vendors in the inevitable transition from disk-based storage to Flash.
And investors and creditors apparently believe him: they’ve handed over more than $250 million since Basile joined Violin in 2009, counting the money raised by Gear6, a caching startup Violin bought in 2010. Violin now has revenues that could zip past $100 million this year, and Basile says an IPO is likely within the next nine months.
That would be a remarkable turnaround for a company that was deep in debt—with no revenue, and facing a skeptical market—as recently as 2009. Violin didn’t even start selling its first enterprise memory array until mid-2010. But if it does reach the $100 million milestone this year, it will have done so in one-third the time it took a comparable startup—storage array vendor 3Par, which was acquired by HP last year—to hit the same revenue level.
That kind of growth is exactly what the startup’s backers, who include Rationalwave Capital Partners and strategic investors Toshiba and Juniper Networks, are pressing for. “We have, in 24 months, put together a quarter-billion dollars for Violin,” says Basile. “That is a lot of money for a company that had zero revenue when we started. It means people believe there is huge opportunity here. On the other side of the equation, it means you have to get pretty big”—and quick.
Flash memory was invented at Toshiba in the early 1980s, and the Japanese giant still makes about half of the world’s supply of the chips. The technology has already transformed consumer computing: if you hadn’t noticed, there isn’t a disk drive inside your
