replace their VMAX array, a flagship EMC product, with a Violin stack that’s five feet high and outperforms VMAX by 5x to 50x, depending on the application.”
Enterprises spend $20 billion a year to replace or upgrade existing storage systems. As the servers they’re connected to get faster, disk-based arrays will have a harder and harder time keeping up. That could put Violin in position to grab quite a bit of business. “For most companies in the startup world, even finding a billion-dollar market would be wonderful,” says Basile. “We are talking about a multi-billion market available to us, and this is what is exciting for us as operators and for our investors.”
With their legacy disk technology, none of the incumbent storage vendors are likely to make the leap to all-Flash arrays on their own, Basile predicts. But they might decide to buy rather than build—which could put Violin in line to be acquired. “The technology transformation will happen,” Basile says. “Whether it happens under the brand of Violin Memory, or a company like EMC decides to acquire the technology, is an open question. It’s really up to Larry Ellison and Joe Tucci and Sam Palmisano [CEO of IBM] and Leo Apotheker [CEO of HP] whether they will allow companies like Violin to become standalone, large entities.”
That definitely hasn’t been the pattern lately—giants have snapped up storage companies like Netezza (acquired by IBM), Data Domain (EMC) and Equal Logic (Dell) as soon as they’ve hit a couple hundred million in revenue. But there’s another path available to Violin, Basile says. “The opening of the IPO market has made it possible for an independent company to get big,” he says. “We’re watching current market conditions closely, including the success of Fusion-io’s stock market debut and the excitement around Groupon, which, like Violin Memory, has a short revenue track record. All are factors in leaning toward an IPO rather than toward being acquired.”
On the same day he met with me, Basile told Dow Jones VentureWire that he’s already in talks with bankers, law firms, and stock exchanges about going public, and that the offering could move forward as soon as December. An IPO would bring Violin more cash to expand internationally, develop the next generation of even faster and more reliable memory arrays (the company has a close R&D partnership with Toshiba), and build the sales team it will need to compete against the storage incumbents—not to mention the smaller followers now cropping up.
“Our market is very crowded,” Basile acknowledges. “Thirty to 40 startups have popped up in the last two years to chase me and my prior company [Fusion-io] into the market. It’s our job to stay ahead and win.”
