Posted by: Dave Raffo
Storage vendors were cautiously optimistic over signs of a spending uptick in late 2009, but at least one has stumbled out of the gate in 2010.
Compellent Wednesday evening said it missed its sales projection last quarter, and expects to report revenue of around $31.5 million to $32 million instead of its previous guidance of $35 million to $37 million. The new projection puts Compellent revenue down 12 percent to 13 percent over the fourth quarter of 2009, and up about 12 percent to 14 percent from the first quarter of 2009.
Compellent CEO Phil Soran blamed the shortfall on delays in some large orders and changes in the sales force, and said “We remain positive about the outlook for continued growth.”
But analysts and investors weren’t so forgiving. After several Wall Street firms downgraded its stock price, Compellent shares opened today at $13.75 – down from Wednesday’s closing price of $17.56 – and continued to fall this morning.
Analysts also believe Compellent’s problems were not typical of storage vendors last quarter. Wedbush Securities analyst Kaushik Roy did not downgrade Compellent, but pointed out Xyratex reported better results than expected, LSI raised its guidance for the month and EMC is expected to beat its previous forecast for last quarter. Roy wrote in a note to clients today that part of Compellent’s problems are caused by growing pains as it finds itself with greater challenges than when it went public in 2008.
“As the company grows, competitors such as EMC, NetApp and Dell are now increasingly taking notice of Compellent,” Roy wrote. “We believe that competitive pressures from these companies have increased as a result leading to some of the revenue shortfall.”
Roy added that EMC’s announcement of its FAST automated tiering software roadmap may be offsetting Compellent’s first-to-market advantage with its Data Progression tiering software. He also wrote that Compellent’s 100 percent reliance on the channel could also hurt it because channel partners are less motivated than direct sales people to close deals in time to meet sales targets.