Feeds

High-flying 3PAR down at ground level

Revenues yes, profit not so much

HP ProLiant Gen8: Integrated lifecycle automation

3PAR is growing revenues, but has seen the bottom line go red in its third quarter. Its product strengths don't seem strong enough to repel competitive pressures.

Its third quarter 2010 revenues were four per cent up year-on-year at $50.1m, confirming as others have that the recession is definitely easing. Notwithstanding that, it made a loss of $528,000, which compares to a profit of $461,000 a year ago when revenues were lower. What went wrong?

Operating expenses were up, with the combined R&D and sales and marketing budgets adding another $2.57m to OpEx year-on-year. Stifel analyst Aaron Rakers identified several things contributing to the loss. Average deal value fell as the lower-priced mid-range F-Class product sales ramped up. There were slightly fewer sales reps in the quarter, and new customer revenue was down 53 per cent year-on-year, and also 42 per cent compared to the second 2010 quarter. That's not good news.

Jim Dawson, 3PAR's sales head in its high-growth years, departed to Fusion-ion in May last year, and it does seem that 3PAR may not be selling as effectively as in the past. (The preceding quarter also saw a net loss of $760,000 on revenues of $46.1m.) It's gratifying that revenues rose sequentially and annually, but disappointing that internal cost rises ate into the increase and cancelled it out in a profit sense.

The company has had its once revolutionary thin provisioning technology lead whittled down. EMC, HDS and others have added their own thin provisioning technologies. Although 3PAR has continued improving its thin capabilities and is cementing its arrays more effectively to VMware, these moves have not been enough to get it flying again.

The contrast with growing sales of smaller SAN products from Compellent and Dell shows that the high-end enterprise array market is not yet on the move. We're all waiting to see when it will lift off and how the various suppliers will do when that happens.

3PAR's outlook is for fourth quarter revenues of $50.5m - $54m. The 3PAR execs will be pushing hard for the $54m number and show us all that it is still a growth company. ®

Reducing security risks from open source software

More from The Register

next story
Sysadmin Day 2014: Quick, there's still time to get the beers in
He walked over the broken glass, killed the thugs... and er... reconnected the cables*
Amazon Reveals One Weird Trick: A Loss On Almost $20bn In Sales
Investors really hate it: Share price plunge as growth SLOWS in key AWS division
Auntie remains MYSTIFIED by that weekend BBC iPlayer and website outage
Still doing 'forensics' on the caching layer – Beeb digi wonk
SHOCK and AWS: The fall of Amazon's deflationary cloud
Just as Jeff Bezos did to books and CDs, Amazon's rivals are now doing to it
BlackBerry: Toss the server, mate... BES is in the CLOUD now
BlackBerry Enterprise Services takes aim at SMEs - but there's a catch
The triumph of VVOL: Everyone's jumping into bed with VMware
'Bandwagon'? Yes, we're on it and so what, say big dogs
Carbon tax repeal won't see data centre operators cut prices
Rackspace says electricity isn't a major cost, Equinix promises 'no levy'
prev story

Whitepapers

Designing a Defense for Mobile Applications
Learn about the various considerations for defending mobile applications - from the application architecture itself to the myriad testing technologies.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Top 8 considerations to enable and simplify mobility
In this whitepaper learn how to successfully add mobile capabilities simply and cost effectively.
Seven Steps to Software Security
Seven practical steps you can begin to take today to secure your applications and prevent the damages a successful cyber-attack can cause.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.