Compellent - the billion-dollar storage company?
Screw the recession up
Comment Holding up Compellent as an example - and with an emphatic sideswipe at some business ethics - Compellent CEO Phil Soran opened his company's CDrive conference today by saying: "Big business isn't going to pull us out of this recession. Nor big computer computers. It's the small and medium-sized businesses that are going to have to pull us out."
Soran lamented a decline in business ethics, mentioning - amongst other things - a survey finding that 45 per cent of law students had cheated in their studies. He encouraged people to be ethical, focussed on efficiency, enthusiastic and entrepreneurial, and declare: "Screw the recession up."
Compellent results backed up Soran's sentiments, with his company being the only publicly-owned storage company currently exhibiting growth in profits. For its first 2009 quarter (Q109), Compellent recorded revenues of $28.1m, up 53 per cent year-on-year and 4 per cent sequentially. Net income was $1.0m ($0.03/share) compared to Q108's net loss of $1.6m (-$0.05/share). It was Compellent's fourteenth quarter of record revenue numbers, and it was fueled by 98 new customers in the quarter. The company now boasts 1,376 customers.
Some 45 per cent of the quarter's revenues came from existing customers. Average customer spend peaked at $22,652 in Q308 and has fallen sequentially since to $20,422. The gross margin is 52.8 per cent, up from Q108's 52.2 per cent.
Operating expenses rose from Q108's $12.05m to $14.03m. But within that, both R &D and sales and marketing spend rose while general and administrative expense fell to $1.4m from the year-ago quarter's $1.7m. The company is being run very tight reins. Soran said Compellent hit the $100m/year run rate in Q408. With these results demonstrating an ability to almost scythe through recessionary constraints, are we looking at the next billion dollar a year storage company here?
Asked if people at Compellent were getting the scent of the possibility of it becoming a billion dollar company, Bob Fine, Compellent's director of product marketing, said: "Absolutely." Soran has also been musing about the need to keep the spirit of the founders alive. He knows that few founders are still at their companies when it becomes a billion dollar a year earner.