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Hybrid array vendor Nimble Storage revenues are growing

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August 27, 2014

It's reported that Hybrid array vendor Nimble Storage saw its revenues grow as its rivals were unable to deliver equivalent price/performance products.

Overall, revenues were $53.8 million for its second quarter, an 89 percent increase year-on-year and beating its own guidance of $49 million to $51 million.

There was a net loss of $26.1 million however, 149 percent worse than a year ago, meaning that losses are increasing faster than sales revenue.

Nimble CEO Suresh Vasudevan’s statement was enthusiastic, however-- “We added a record 663 new customers during the quarter, ending with a total of 3,756 customers, an increase of 115 percent from Q2 of 2013. During the last four quarters, we added a total of over 2,000 new customers as we continued to increase our share of the market. We also closed a record number of deals with a value over $100,000 each during Q2, including the largest deal in our history.”

William Blair analyst Jason Ader said Nimble had “continued its land-and-expand success (large enterprise and cloud service provider customer bases up 81 percent and 119 percent year-over-year, respectively).”

All in all, he sums it up like this-- “Overall, in line with commentaries from our reseller contacts, the company appears to be firing on all cylinders as it continues to make inroads against large storage incumbents and disrupt the market at large.“

The company is “on track to achieve the break-even point on a non-GAAP basis by the end of our next fiscal year,” meaning by May 1st, 2016. That means a GAAP profit later in 2016.

Fibre Channel support should be added around January 2015 and this could increase its revenues in larger enterprises.

Ader comments-- “We believe that the addition of Fibre Channel support, the newly released high-end platform, and the general availability of its new scale-out software should expand the company's addressable market beyond the midrange and enable it to continue taking share from vulnerable incumbents.”

Technology giants such as Dell, EMC, HP, IBM and NetApp appear unable to respond to Nimble’s success by developing competing products.

Nimble’s international direct sales force is now in 19 countries, vs. 13 in the prior quarter, while Nimble has international distribution arrangements in an additional 26 countries, vs. 21 in the prior quarter.”

We don’t see how competitors could lower prices to meet the price/performance levels of Nimble without drastically affecting their profitability.

The best method would be for them to bring out hybrid array product ranges which don’t impact their mainstream revenues but, at first glance, that would seem like an impossible marketing stunt to pull off.

The outlook for Nimble’s third quarter is for revenues between $56 million and $58 million, the midpoint being 71 percent higher than the year-ago period.

In other IT news

It looks like VMware is feeling the heat that OpenStack poses to its livelyhood and has decided to do something about it by developing its own distribution of the cloud called VMware Integrated OpenStack (VIOS).

OpenStack is often perceived as a direct threat to VMware because the two stacks have a fair amount of overlap. Think of duplication of services in a way.

VMware's argument suggests that “Organizations, particularly enterprises, have found that deploying OpenStack can be time and resource intensive, and that the underlying infrastructure does not always meet their requirements for security, resilience and performance.”

The operations people who do care about those things sometimes rely on VMware to provide the qualities listed above, so by making an OpenStack distribution that is driven by VMware developers gets the best of both worlds.

Details about just what's in VIOS are sketchy, but the information provided to us last night before the VMworld 2014 keynote says it will offer “full integration with VMware administration and management tools, allowing customers to leverage existing VMware expertise to manage and troubleshoot an OpenStack cloud.”

The VMworld keynote will also reveal the likes of vCentre, and VMware's other management tools, now live under a brand called “vRealize Suite”. The suite won't just manage private clouds or hybrid clouds running in VMware's own Air public cloud-- the company says workloads in Amazon Web Services' cloud will also be fair game.

Also on offer will be “Infrastructure services costs, metering and analysis including public cloud rate cards, facilitating optimal workload placement and transparent show/charge back” along with “On-demand delivery of applications and infrastructure services via a service portal/catalog or API and guided by policy.”

Analytics and performance optimization tools are other elements of the suite, along with “an ecosystem of third-party management packs for Microsoft, AWS, Cisco, SAP and more.”

VMware will also reveal “vRealize Air Automation”, a subscription application and infrastructure service.

Another software announcement from the show is NSX 6.1, an update to VMware's network virtualization tool with a headline feature of improved network micro-segmentation.

There's also a new version of VMware's top certification – the VCDX – focussed on network virtualization.

Material we've been provided ahead of the keynote doesn't mention a vSphere update, but does include news of a 5.8 release for vCloud Suite complete with “policy-based provisioning capabilities that will enable customers to add compute, network, security, storage and now disaster recovery services to their applications and infrastructure.”

VIOS is scheduled for the first half of 2015. vRealize Suite will land later in Q3 2014. NSX 6.1 and vCloud Suite 5.8 appear to be available now, according to what we've seen.

In other IT news

For another episode in yet such little time, China is once again taking a nationalist approach on technology, but this time with its own PC and mobile operating systems. And it looks like the project has been planned for a while.

The state-controlled Xinhua News Agency reported the announcement late yesterday, citing U.S. surveillance as one of the reasons Chinese engineers are developing their own operating system for desktop computers and mobile devices.

The new software would compete directly with Microsoft's Windows and Google's Android OSs. And it would be available to China's consumers and government personnel alike.

The operating system is slated for release in October, Xinhua reported. The project is being completed by an alliance of various developers operating under the guidance of Guangnan Ni, who co-founded Chinese computer maker Lenovo in 1984.

He remains one of the top figures in the country's technology scene. Ni told Xinhua that the Chinese government should lead the project going forward.

He noted that software developers in China have been building their operating systems on top of Google's Android platform instead of starting from scratch, and that the government could help move them to the new Chinese operating system.

To be sure, the Chinese government has complete and total control of the country's software market, and this is the latest sign that authorities are seriously going domestic on technology.

When Microsoft ended support for Windows XP on April 8 of this year, it left nearly three-quarters of Chinese computers at risk of bugs and malware. China's government was angry that Microsoft would let them down and promised that it would look at all its options.

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China then took the unusual step of blacklisting Microsoft's latest operating system, Windows 8, banning it from all government computers.

The Chinese news agency named Microsoft's "monopoly" as one reason for bringing production domestic rather than upgrading government computers to Windows 8.

But it also cited U.S. spying as a reason for backing its own operating system, suggesting that the Chinese government is worried the U.S. National Security Agency might be inserting backdoors into U.S.-made software like Windows and Android, something that the U.S. has been worried sick about from Chinese networking firm Huawei.

In other IT news

Some industry observers are now saying that the ARM processor architecture will graduate to production servers soon.

However, before ARM servers can ship in any significant volume, a standardized hardware platform that specifically targets the data center is an absolute requisite.

At least that's the view of chief ARM architect for enterprise Linux vendor Red Hat, who addressed the topic during a session at the LinuxCon 2014 conference in Chicago last Thursday.

Red Hat and several others – most notably the Linaro consortium, of which Red Hat is also a member – have been working on getting Linux ready for ARM servers, and vice versa, for several years.

But according to Masters, one specific challenge has been convincing hardware vendors that what has worked for ARM on mobile devices won't work for the data center, since those are two very different environments.

"A lot of early servers – not just in the ARM case but with other architectures – were built using what I call an embedded mindset," Masters said. "So they continue what I affectionately call the embedded zoo, which is really applying the design philosophy that you take with a mobile phone and applying that to a server."

It's not that Masters sees anything wrong with how phone vendors have been building their devices. He does admit however that the embedded design philosophy has served Apple and the various Android mobile-makers extremely well.

But these efforts have been successful in large part because smartphone vendors build their hardware so that the software is welded to the hardware as a fully integrated system.

Whether they use an off-the-shelf ARM system-on-chip (SoC) component or they create their own – as Apple and Samsung have both done – each device they produce typically contains numerous software adaptations for its own, very specific hardware. And that what's important here.

Source: Nimble Storage.

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