Howard Marks

Network Computing Blogger

Upcoming Events

Where the Cloud Touches Down: Simplifying Data Center Infrastructure Management

Thursday, July 25, 2013
10:00 AM PT/1:00 PM ET

In most data centers, DCIM rests on a shaky foundation of manual record keeping and scattered documentation. OpManager replaces data center documentation with a single repository for data, QRCodes for asset tracking, accurate 3D mapping of asset locations, and a configuration management database (CMDB). In this webcast, sponsored by ManageEngine, you will see how a real-world datacenter mapping stored in racktables gets imported into OpManager, which then provides a 3D visualization of where assets actually are. You'll also see how the QR Code generator helps you make the link between real assets and the monitoring world, and how the layered CMDB provides a single point of view for all your configuration data.

Register Now!

A Network Computing Webinar:
SDN First Steps

Thursday, August 8, 2013
11:00 AM PT / 2:00 PM ET

This webinar will help attendees understand the overall concept of SDN and its benefits, describe the different conceptual approaches to SDN, and examine the various technologies, both proprietary and open source, that are emerging. It will also help users decide whether SDN makes sense in their environment, and outline the first steps IT can take for testing SDN technologies.

Register Now!

More Events »

Subscribe to Newsletter

  • Keep up with all of the latest news and analysis on the fast-moving IT industry with Network Computing newsletters.
Sign Up

See more from this blogger

Violin's IPO Tumble Is About Violin, Not Flash

Violin Memory had its long-awaited IPO recently, and by the end of the day the stock had fallen from the initial offering price of $9 to just over $7 a share.

Does this mean the market is sour on upstart flash vendors? Or is Wall Street's response to Violin Memory just about Violin, as Freud's cigar is sometimes just a cigar?

More Insights


More >>

White Papers

More >>


More >>

Violin was the market leader in Gartner's 2012 flash array survey, but we should avoid reading too much into that single fact. Violin's total sales last year were $73.8 million, and the company managed to lose $109 million during that period. Sales are increasing, with the last six months showing $51.3 million in sales, but still $59 million in losses.

Several newer startups, including Nutanix and Nimble, are selling kit at a faster rate than Violin. Nimble claims a run rate over $100 million a year. Even direct competitor Pure Storage, which sold its first few units in 2012 when the survey was taken, is fast approaching Violin in size. Pure also managed to raise $150 million in venture capital in August, versus the $162 million Violin raised in its IPO.

All these vendors use standard SSDs, rather than develop several custom ASICs as Violin does, so they can concentrate on software development. Software development is both faster and less expensive than coding ASICs.

[As the SSD market heats up, Howard Marks makes his predictions for who'll come out on top in "SSD Vendors: Which Will Win?"]

While Enterprise Strategy Group's Steve Duplessie was right when he tweeted that the IPO didn't flop because Wall Street hates Violin CEO Don Basile, there is an impression that Basile, and the Violin board, are a bit fonder of Basile than Violin's performance would seem to warrant.

Basile's total compensation was reportedly about $18 million last year; while that may be reasonable for running HP or IBM, anything over 20% of gross revenues seems excessive to me.

In addition, Basile received a grant of 5 million shares of Violin stock, worth over $35 million even at the stock's low point Monday, for creating a liquidity event (taking the company public) within 60 days of July 31.

I, for one, am experiencing just a touch of schadenfreude in the losses Violin's initial public investors took as the stock fell. These aren't grandmothers and orphans being taken advantage of by Jeff Skilling or Bernie Madoff--these are Wall Street insiders who, because of their wealth and position, have the influence to get shares at the initial offering price.

Most of the time, their investment banker friends price the offering so they can buy at $9 and dump the stock to the greater fools placing buy orders on eTrade for $15 or so as the stock sky rockets on day one. That didn't happen this time around.

Violin faces several significant challenges if it is to cut its losses before the $162 million it raised in the IPO runs out in about 18 months. The biggest is its lack of software-related functionality. Violin arrays were designed strictly for performance, as its recent 2 million IOP announcement demonstrated. But, like a top fuel dragster, it sacrificed everything else to go fast.

Even basic data management features such as snapshots are provided in a Violin array through a custom version of Symantec's venerable Storage Foundation running on a pair of Xeon processor cards. The competition--from Pure and Solidfire to Cisco's Whiptail and EMC's ExtremIO--can deliver more performance than 98% of the market needs while also supporting VAAI and deduplicating data. At the same time, PCIe flash cards, which Violin does now make, are stealing much of the OLAP and HPC markets Violin was initially successful in.

Now that EMC, Cisco (via Whiptail), HP and Dell have all flash products good enough for 95% of buyers, Violin will have to make some really sweet music to stay in tune with its shareholders.

Related Reading

Network Computing encourages readers to engage in spirited, healthy debate, including taking us to task. However, Network Computing moderates all comments posted to our site, and reserves the right to modify or remove any content that it determines to be derogatory, offensive, inflammatory, vulgar, irrelevant/off-topic, racist or obvious marketing/SPAM. Network Computing further reserves the right to disable the profile of any commenter participating in said activities.

Disqus Tips To upload an avatar photo, first complete your Disqus profile. | Please read our commenting policy.
Vendor Comparisons
Network Computing’s Vendor Comparisons provide extensive details on products and services, including downloadable feature matrices. Our categories include:

Research and Reports

Network Computing: April 2013

TechWeb Careers