Compellent Preps for IPO

SAN specialist files S-1, eyes SMB and large enterprise opportunities

July 3, 2007

4 Min Read
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After months of speculation, SAN specialist Compellent has become the latest storage vendor to hit the IPO trail, filing its S-1 with the U.S. Securities and Exchange Commission (SEC) this morning. (See Compellent Plans IPO.)

Morgan Stanley will act as the vendor's book-running manager, with Needham & Co., Piper Jaffray, RBC Capital Markets, and Thomas Weisel Partners acting as co-managers of the offering.

The number of shares to be offered and the price range for the offering have not yet been determined, although the vendor plans its IPO sometime in the third quarter of this year.

Compellent was founded in 2002 and has clinched $53 million in three rounds of funding. Management's eyed an IPO for awhile, hoping to eventually trade under the ticker symbol "CPLT." (See System Startups Get Fresh Funding, Compellent Picks Up $15M, and Compellent Adds to Board.)

The S-1 reveals that Compellent's revenues are heading in the right direction, up from just under $10 million in 2005 to $23.3 million in 2006. Revenues for the first quarter of 2007 were $8.9 million, compared to $3.3 million in the same period last year.Despite this upward trajectory, the startup has yet to achieve a quarter of profitability and had an accumulated deficit of $43.7 million at the end of March this year. The vendor also incurred net losses of $11.4 million, $9.1 million, and $6.8 million for the years 2004, 2005, and 2006, respectively.

Compellent, which touts its products as a lower-cost alternative to SAN offerings from big-name vendors such as EMC, combines both Fibre Channel and iSCSI in the same system. (See Compellent Adds SAN Wizard and Thin Is Definitely In.) The vendor also competes against 3PAR, Xiotech, EqualLogic, and LeftHand Networks. (See 3PAR, NetApp Join Ranks, Xiotech Lands Multiple Contracts, EqualLogic: Thin Is In, and LeftHand Adds 10-GigE SANs.)

Compellent plans to use IPO proceeds to increase its channel partners and expand sales to both small-to-medium sized companies and large enterprise users. (See VeriStor, Compellent Team on SAN, and ZTE Warns on Profits.)

Compellent has been picking up customers at a clip over recent months, and the SEC filing cites the U.S. government as an "important end user" of its StorageCenter hardware. (See Krieg DeVault Picks Compellent, World Wildlife Fund, AHC Selects Compellent, IWMD Picks Compellent, and Compellent Deploys Software.) Since shipping its first products in early 2004, Compellent has racked up more than 550 customers, according to the S-1.

Another major area of focus for Compellent is virtualization. Last week the vendor unveiled a joint marketing agreement with virtualization vendor Virtual Iron, which followed a similar deal with VMware last year. (See Compellent, Virtual Iron Team, Virtual Iron Dangles iSCSI Savings, VMware Certifies Compellent, and VMware to Spin Out.)"Over half of our customers use some form of server virtualization with their Compellent SAN," said Bruce Kornfeld, Compellent's vice president of marketing, explaining that the South Carolina Office of the Attorney General and the PGA Tour Superstore are already joint customers with Virtual Iron.

More storage vendors are taking the public route. Trading began in de-duplication specialist Data Domain's shares last week, joining a growing list of other storage-related companies, including Mellanox, Isilon, Double-Take, Riverbed, and CommVault. (See Riverbed Comes Out at $9.75, CommVault Swims in Public Pool, Data Domain Goes Public, Data Domain Dives In, and Quantum Gains on Rival's IPO.)

Firms in related fields are taking action, too. Data warehousing specialist Netezza filed its own S-1 earlier this year. (See Netezza Nudges IPO.) More recently, virtualization behemoth VMware has edged closer to its own public offering via parent EMC, and IPO talk continues to swirl around Voltaire and Force10. (See VMware Closer to IPO, VMware Files With SEC, Voltaire Nabs Cash Amid Speculation, and Force10 Round Hits $113M .)

James Rogers, Senior Editor Byte and Switch

  • Compellent Technologies Inc.

  • CommVault Systems Inc.

  • Data Domain Inc. (Nasdaq: DDUP)

  • Double-Take Software Inc. (Nasdaq: DBTK)

  • EMC Corp. (NYSE: EMC)

  • EqualLogic Inc.

  • Force10 Networks Inc.

  • Isilon Systems Inc. (Nasdaq: ISLN)

  • LeftHand Networks Inc.

  • Mellanox Technologies Ltd. (Nasdaq: MLNX)

  • Morgan Stanley

  • Needham & Co.

  • RBC Capital Markets

  • Riverbed Technology Inc. (Nasdaq: RVBD)

  • Securities and Exchange Commission (SEC)

  • Thomas Weisel Partners

  • 3PAR Inc.

  • U.S. Bancorp Piper Jaffray

  • Virtual Iron Software Inc.

  • Voltaire Inc.

  • Xiotech Corp.

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