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» VIEW ALL POSTS Apr 22 2010   3:07PM GMT

Isilon scales out sales, profits



Posted by: Dave Raffo
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NAS vendor Isilon made it two straight profitable quarters when it beat expectations for last quarter to report 46% year-over-year revenue growth.

Isilon’s revenue of $39.3 million was even up 5% over the previous quarter, and it’s rare for storage companies to increase revenue from the fourth quarter of one year to the first quarter of the next. Isilon had $1.1 million of net income, up from $100,000 in the previous quarter. That compares to a $10.4 million loss in the first quarter of 2009. Isilon executives even raised their forecast for 2010 revenue from growth in the low-to-mid 20% range to an increase in the mid-30% range.

Isilon CEO Sujal Patel said the revenue growth came partly from pent-up demand of customers who has budget constraints in 2009, as well as better international sales and an increased channel focus. He also said Isilon is moving into more mainstream enterprise NAS accounts to go with its previous success in verticals such as media and entertainment.

Patel says Isilon is also benefiting from an industry focus on scale out NAS because its main NAS competitors don’t have clustered products yet.

“We have very little competition in the scale out space,” Patel said today on the Isilon earnings conference call. “There are lots of announcements out there from large companies, but most of the products we compete with are still two-controller products.”

After adding support for solid state drives (SSDs) and other hardware enhancements over the past year, Patel said Isilon’s product focus will be on software this year.

He says Isilon plans an operating system upgrade this year with and new software applications in 2010 and early 2011. He didn’t offer details, but Isilon could benefit from greater optimization with virtual servers and mainstream storage applications such as Oracle databases as well as native data deduplication.

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