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Isilon cuts staff, recruits NetApper

Fizz, not Fitz

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Scale-out NAS supplier Isilon has made a first quarter loss, fired about 40 people, and recruited another NetApp sales exec to bolster its executive ranks.

Prelimanary results for the first quarter of 2009 show revenue in the $26.5m to $27m range, which is 10-12 per cent up on the year-ago quarter. But it's also 15 to 17 percent down on the final 2008 quarter. The company expects a net loss of $0.16 to $0.217/share.

CEO Sujal Patel fingered the now usual suspect. "It's clear that persistent global economic weakness and uncertainty has led to contraction in many of our customers' IT budgets," he said. "Softening economic conditions during the quarter required that we take steps to maintain the company's path towards profitability and to ensure that we're in a position to pursue strategic growth initiatives...We have implemented a workforce reduction that will impact approximately 10 per cent of our global employee base and result in cost savings of approximately $4.0 million per year."

The workforce reduction of about 40 people will create a one-time operational expense of approximately $850,000 in the second 2009 quarter, but hopefully, it will result in savings of $4m a year.

Turning to the single Isilon recruitment here, George Bennet was America's sales VP from 2003 to 2008 at NetApp, and his region's revenue was $600m when he started and $2bn plus when he finished. Isilon want some of that star sales quality.

He left NetApp to join Quantum as SVP world-wide sales in September 2008 and has now exited Quantum to join Isilon as SVP for world-wide field operations, the head honcho for global product and services sales, reporting direct to CEO Sujal Patel. At Isilon he can say hello to Leonard Iventosch who joined it in October 2008 as VP for channel and OEM sales, having left a similar position at NetApp in July.

Why did Bennett leave Quantum after just eight months? Was it just more dollars or does Isilon's future look better to him than recently bailed-out Quantum's?

Isilon has included Steve Fitz, its previous SVP world-wide sales, in the headcount reduction, after two years in post. He joined Isilon in April 2007, coming from EMC and reporting to the then-Isilon CEO, Steve Goldman. Isilon is presently recovering from Goldman's somewhat unsatisfactory leadership which ended with Patel coming back to resume the CEO position. The company did not issue a "Thanks Steve, for all your efforts" statement, which is unusual. This generally indicates a degree of dissatisfaction about performance or some other aspect of the defunct employee's role.

Isilon has announced the availability of its new IQ36000 and other hardware, which we covered in March. It has also announced "an integrated nearline archive solution combining Isilon's new 36NL and Ocarina's ECOsystem storage optimization software." This combo could deliver up to 10-to-1 data reduction and average storage utilisation rates of up to 90 per cent.

Patel is clearly hoping for NetApp-like sales revenue growth and looking to Bennett to add the fizz that Fitz didn't. ®

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