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Storage Bubble Wrap

5:10 PM -- A column (sadly, unlinkable) in the business section of yesterday's New York Times called attention to two market dynamics of interest to storage networkers:

  • Already in 2007, 53 companies have gone public, a 20 percent increase over the same period a year ago
  • Of those 53 companies, only 25 percent are profitable

While the percentage of unprofitable storage companies going public may not be that high, this lack of pre-IPO profit is a unique aspect to the market we're in and testimony to the hope/naivete also known as investor confidence. It also harkens back to the late '90s and the dotcom boom, leading some to conclude that today's market may be generating another bubble.

A strong balance sheet and several quarters (more than two, certainly) of profitability used to be the prerequisites to floating of shares. That's no longer a hindrance or disqualifier.

Good morning, Data Domain. (See Data Domain Files S1.) Hello, Isilon. (See Isilon Bleeds, Vows Profits.) Riverbed, we know you're claiming profitability, but we got our eye on you, all the same. (See Riverbed Flows Toward Profitability.)

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