Don't fret: Flash array fiddler Violin sees revenue rise, losses dip

Roadmap to profitability

As for growth: "We believe this market transition will continue to accelerate rapidly with many customers adopting flash for primary storage over the next 12 to 18 months", as data centres move to 2-tier storage, flash for the hot data, and cheap-and-deep disk storage for the rest.

The product roadmap is promising, though few details were released. "We have more technology on the way that we believe will allow Violin to become a category leader," he added.

Former CEO Don Basile was relieved of his duties at the end of last year

We expect Concerto to further differentiate us from our competitors both large and small as we tightly integrate all of its functionality into our array solutions.

By combining all of the high level data services, data protection and data reduction technology, including both deduplication and compression into a single core array operating system, we will be able to control and optimise all layers of the storage stack from within a single architecture.

The singular approach will allow us to seamlessly innovate from the lowest level silicon layers to the highest level command and control layer that enable enterprise class data services and connectivity.

“All of this functionality will be at the users’ control, feature by feature, app by app and one by one.”

Violin is adding a net 10-15 sales heads, and CFO Cory Sindelar said: “We've already added half of that number in November.”

DeNuccio said competition from other suppliers was very strong, and the "competitive landscape is as aggressive as I've ever seen it, as the market heated up and it is clear that you got [a] $16bn industry within a window of a tipping point that's going to move to all-flash for primary storage.”

The outlook for the fourth quarter is for revenue between $23m to $25m – not a dramatic rise. With the Q4 loss a year ago being -$56.5m on revenues of $28.8m, much attention will be focussed on the coming quarter's likely net loss (or profit). We estimate profitability will come in Violin’s fiscal 2017. DeNuccio is saying break-even cash flow would come in four to six quarters, possibly four if revenue steps up higher.

Violin is in a flash race. Can it build its sales and marketing infrastructure quickly enough, and develop it technology and products fast enough to capitalise on the data centre flash storage transition without being overtaken by Dell, EMC, HDS, HP, IBM, NetApp, Pure Storage and SolidFire?

They all want to kill Violin and DeNuccio wants to be the top flash array dog. Let the dogfight begin. ®