It wasn’t that long ago that Violin Memory pioneered the high-performance flash market. They created the market for speed but were lacking a rich data services offering. It wasn’t long before many other all-flash storage arrays came to market which may not have been as fast but were good enough with a rich feature set. The lack of data services and competition ultimately causes a lot of pain for Violin Memory. It was so bad that many people thought the company was doomed, but after our SFD8 presentation I’m not convinced.
The meeting had started before the cameras were actually rolling, which I think was really unfortunate for Violin. We were doing two things: eating breakfast and talking financials with the CEO. As we listened to him talk one thing became apparent – Violin financials say they have a chance. CEO Kevin DeNuccio said they had a quarterly burn rate of $12mm with a break-even point being 4 to 8 quarters out. They also have $120mm in cash from the latest funding round. What this means if we need to keep a close eye on them over the next few quarters to see how the burn rate changes. If they can manage to move down to a $7mm – $10mm burn rate, I can see where they make pull back from the brink.
Violin Memory has done a lot of work to change their technology to move forward as a platform. Building rich data services is no easy task, but they seem to have done a great job. The underlying hardware has evolved, but they now have several platforms based on need. Watch the full SFD8 presentations for a deep dive into the technology, but sufficed to say it looks great. With the technology being a major investment, and the financial picture looking promising, Violin Memory may just make it.