Omneon Preps for $115M IPO

Omneon Video Networks has joined the growing list of storage specialists filing for IPOs, in a move that reflects the growing convergence of storage networking and the broadcast industry. (See Storage Grabs Video Limelight, Double-Take, Isilon Go Public and Double-Take Seeks IPO.)

The vendor, which makes disk-based digital storage systems and video servers, is looking to raise $115 million in its public offering, according to documents filed with the SEC. Proceeds from the IPO, it said, may be used for future acquisitions, and also for working capital, although the firm refused to expand on these details when contacted by Byte and Switch today.

J.P Morgan Securities is acting as Omneon's book-running manager. Deutsche Bank Securities Inc., Canaccord Adams, Needham & Co., and JMP Securities, along with J.P. Morgan, are underwriting the offering, which comes at a time when many broadcasters are rethinking their storage strategies. (See Turner Exec Explains Overhaul, HBO Turns to Sun, and Warner Bros..)

As broadcasting firms and telecom providers look to offer more services such as video on demand, there is a growing need for new forms of storage, according to Stephanie Balaouras, senior analyst at Forrester Research. "What makes this content different from traditional enterprise content is that there are traditionally extremely large files that need to be read multiple times and streamed to potentially hundreds or thousands of users simultaneously."

These sentiments are echoed by Tom Coughlin, president of analyst firm Coughlin Associates. "I think that there is enormous growth potential in this market," he says, adding that the popularity of personal content sites such as MySpace will boost demand for specialist storage systems.