Fusion-io (stock symbol: FIO), which went public at $19 three weeks ago, was up $4.97 today, after rising $2.17 on Friday.
According to its final prospectus:
We have pioneered a next generation storage memory platform for data decentralization. Our platform significantly improves the processing capabilities within a datacenter by relocating process-critical, or “active”, data from centralized storage to the server where it is being processed, a methodology we refer to as data decentralization. Our integrated hardware and software solutions leverage non-volatile memory to significantly increase datacenter efficiency and offers enterprise grade performance, reliability, availability and manageability. We sell our solutions through our global direct sales force, OEMs, including Dell, HP and IBM, and other channel partners. Since inception, we have shipped solutions aggregating over 22 petabytes of enterprise class storage memory capacity to more than 1,500 end-users.
Our data decentralization platform can transform legacy architectures into next generation datacenters and allows enterprises to consolidate or significantly reduce complex and expensive high performance storage, high performance networking, and memory-rich servers. Our platform enables enterprises to increase the utilization, performance and efficiency of their datacenter resources and to extract greater value from their information assets. Many users of our platform have reported achieving greater than 10 times the application throughput per server through increased server utilization, resulting in reductions to ongoing facility, energy and cooling expenses.
sec.gov
Fusion-io Flashes Growth Before Its IPO
By ROLFE WINKLER
Wall Street Journal
HEARD ON THE STREET
JUNE 2, 2011
As a recipe for a blowout initial public offering, a storage firm with a dash of social media looks tough to beat. That's the buzz around Fusion-io, set to go public next week.
Fusion-io's specialty is selling NAND flash memory to enterprises. An alternative to traditional hard drives, NAND is popular because it uses less power and retrieves data faster. Fusion-io is bringing NAND's benefits to data centers, where storage can be a bottleneck. Traditionally, servers process data requests from users, and call up data stored in a hard drive nearby. Fusion-io speeds the process by putting data on NAND flash inside the server itself, where it's easier to retrieve.
Gartner estimates the market was about $1 billion in 2010 and will expand an average of 40% a year through 2015. The technology is particularly appealing for the likes of Facebook and Apple, which need to deliver data quickly to users. The two accounted for 52% and 20% of Fusion-io revenue, respectively, in the first quarter.
While it's encouraging that tech giants are adopting its technology, purchases can be lumpy and it is uncomfortable to be so reliant on two customers. Fusion-io says in a Securities and Exchange Commission filing that sales to Facebook will decline significantly this quarter, even as it seeks a $1.4 billion IPO valuation.
Fusion-io is burning cash and had just $16 million in the bank as of March, so the $160 million it hopes to raise is much needed to finance growth.
Another problem, Fusion-io faces a flood of new competitors, says Gartner analyst Joe Unsworth, though it has a head start and will package high-margin software with its hardware.
Like 3Par and Isilon Systems before it, Fusion-io also looks like a juicy storage takeover target. Early investors willing to accept the risk of high competition and lumpy revenue could prove winners.
Write to Rolfe Winkler at rolfe.winkler@wsj.com
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