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Isilon Reveals IPO Plans

Isilon is the fourth storage company -- and the first storage systems vendor -- to file for an IPO this year. (See Isilon Files for IPO.)

Following in the footsteps of backup software vendors CommVault and Double Take, and WAFS startup Riverbed, Isilon filed documents with the SEC Friday afternoon before the long weekend. (See Double-Take Seeks IPO, CommVault's Taking the Plunge, and Riverbed Hedges IPO Bet.) Isilon's filing details plans to raise up to $86.25 million in a public offering underwritten by Morgan Stanley, Merrill Lynch, Needham & Co., and RBC Capital Markets.

All four storage companies, who also have plans to go public, will be watching each other closely. CommVault, which first filed in March, said last week it is looking to list its common stock at a price from $12.50 to $14.50 per share. (See CommVault's One Step Closer.) Riverbed has set a target range of between $7.00 and $8.50. Both could begin trading shares within a month.

An interesting trend has developed among the IPO hopefuls: Riverbed, Double Take, and Isilon plan to go public without having turned a profit yet. Isilon, despite impressive revenue growth since it started selling its Isilon IQ clustered NAS systems in 2003, lost more than $19 million last year and is $10 million in the red for the first half of 2006.

Isilon's revenues have grown substantially, however, from $7.6 million in 2004 to $21 million in 2005, and $23.8 million for the first half of 2006 -- a 245 percent year-over-year increase. Isilon's backers hope that its revenue growth and an anticipated increase in the clustered storage market will lure investors.

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