3PAR, which claims that its utility storage products for tiered storage enhance their economics and performance compared with traditional systems, is seeking $100m in an IPO that will either be on Nasdaq or the New York Stock Exchange.
The Fremont, California company says that its storage system is designed as a key building block for utility computing, which virtualizes application servers and storage arrays to serve up capacity as required, rather than allocating it on a dedicated basis to individual apps, thus improving utilization rates. It says that such computing aims to capture the key advantages of both mainframe computing and client/server.
3PAR argues that traditional SAN and NAS approaches can lead to many individual storage silos, which in turn can require incremental networking infrastructure, adding complexity to storage infrastructure and placing a strain on IT personnel.
It says that other limitations to traditional SAN and NAS approaches are slow provisioning of storage services, performance bottlenecks and under-utilization of storage assets.
3PAR quotes researchers at the 451 Group as calculating that the ongoing management and support costs associated with traditional enterprise storage systems are often more than twice the initial capital expenditure.
Traditional storage systems also use a dedicate-on-allocation approach that requires customers to purchase and pre-dedicate large quantities of storage capacity to applications and servers significantly ahead of when data is actually written. The results, according to data published by IT consultants GlassHouse Technologies, is that storage utilization rates have been estimated at an average of 25%.
By contrast, utility storage was emerging as a storage architecture that leveraged technologies that include virtualization, automation and clustering to create shared infrastructures for flexible workload consolidation.
3PAR believes that when compared to monolithic and modular storage, its utility storage products enhance service delivery and storage economics by offering higher performance at a lower total lifetime cost of ownership.
It says its software allows customers to improve their utilization of physical storage capacity by minimizing the use of pre-allocated, unused storage capacity. Its Thin Provisioning software allows an application to be allocated the virtual storage capacity it requires, without having to dedicate all of the associated physical capacity up front.
It uses a dedicate-on-write approach that it says differs from the traditional dedicate-on-allocation approach. The Thin Provisioning software dedicates storage capacity to a unit of storage allocation, or volume, only when an application actually writes data to it. As a result, it says each storage volume is driven towards full utilization and the software also allows new applications to be implemented immediately using virtual capacity.
The company has a history of rapid growth since it began generating revenue in 2003, though is still mired in losses. In the year to March 31, it only reduced its net loss from $16.2m to $15.4m on revenue that rose 71.7% to $64.9m. With sales and marketing costs almost doubling to $10.4m in the first quarter to June 30, the net loss increased from $2.2m to $4.6m on revenue 57% higher at $23.1m.
3PAR’s escalating sales and marketing costs are explicable because the company explains that a typical initial order requires three to six months of selling effort as it educates prospective customers about the technical merits and capabilities and potential cost savings of its products.
Repeat orders, which accounted for 66% of its revenue last year, are usually less time-consuming. The company is heavily dependent on the North American market and international sales only account for 11% of revenue.
3PAR says it has over 400 systems to more than 200 end customers, including Credit Suisse Group, Department of Justice (FBI), Dow Jones, US Census Bureau, and Verizon Business.
The company’s InServ Storage Server products can support up to 384 terabytes of storage in a single tightly clustered system. This can be mixed between various types of enterprise-class and nearline disk drives to meet the differing needs of a variety of applications supported on a single system.
3PAR says its systems allow Fibre Channel and iSCSI host connectivity concurrently, which permits the consolidation of a wide variety of applications and servers. In addition, through our alliances with NAS gateway vendors, it says it can offer open, unified storage solutions for overall storage consolidation.