Storage Soup

Dec 16 2013   3:04PM GMT

Flash array vendor Violin sends CEO overboard following post-IPO swoon

Dave Raffo Dave Raffo Profile: Dave Raffo

Struggling flash array vendor Violin Memory today dumped Don Basile, 11 weeks after he took the company public.

Violin chairman Howard Bain III takes over as interim CEO, and the board has hired an executive search firm to find a permanent replacement for Basile.

Violin’s initial public offering (IPO) turned out the beginning of the end for Basile. The company’s stock price dropped from $9 at its IPO to $2.68 this morning, and Violin missed analysts’ expectations in its first quarter as a public company. CTO Jonathan Goldrick resigned last week, and there has been speculation since then that Basile would leave. Violin is also besieged by a rash of investor lawsuits and analyst downgrades because of its poor financial performance last quarter.

Basile became Violin’s CEO in 2009 after serving as CEO of Fusion-io. During his tenure, Violin raised at least $180 million in funding and became the all-flash array market leader – according to Gartner – with $72 million in revenue in 2012.

However, investors and analysts were stunned to learn Basile earned $19 million in 2013 while the company lost more than $90 million through the first three quarters of the year.

Much of Violin’s early sales success came before large storage vendors got into the all-flash market, but all major storage companies now have at least one all-flash platform.

Violin’s press release made it clear that the change in CEO was the board’s choice, and not Basile’s. While the release went into great detail on Bain’s background, it mentioned Basile only once – saying Bain’s new role “follows the decision of the board of directors to terminate Donald Basile.”

David Walrod, chairman of Violin’s nominating and corporate governance committee, was quoted in the release saying “the board believes this leadership change is necessary to enhance the management team’s operational focus and ability to execute the company’s plans for profitable growth.”

Violin lost $34.1 million last quarter on revenue of $28.3 million.

Bain has been on Violin’s board since October 2012 and became chairman in August. He has been CFO of Symantec, Informix, Portal Software and Vicinity.

 

 

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