In its first quarter as a public company, Nimble Storage sidestepped the IT spending slowdown that its larger competitors say have hampered sales.
Nimble reported $41.7 million in revenue last quarter, more than double from its $20.2 million in the same quarter the previous year. Nimble’s $126 million revenue last year also more than doubled from $54 million the previous year. For this quarter, Nimble expects revenue in the range of $42 million to $44 million, roughly double the $21.1 million it generated a year ago.
In comparison, EMC’s storage product revenue grew 10 percent year-over-year last quarter. NetApp’s FAS and E Series revenue declined five percent, Hewlett-Packard’s storage revenue stayed the same despite a substantial increase in its 3PAR storage and IBM’s storage revenue declined 13 percent.
Part of the reason for Nimble’s rapid growth is its revenue is still tiny compared to the giants it competes with. It also sells mostly lower-priced systems to smaller companies — many of whom are adding Nimble arrays to earlier implementations — rather than large enterprises that take longer to make purchases. Nimble’s average deal price is under $70,000, but it also reported an increase in deals of more than $100,000 last quarter.
Nimble claims it added 527 new customers last quarter, bringing its total to 2,645.
EMC and NetApp executives talked about cautious IT spending and longer evaluation cycles during their earnings calls, but Nimble VP of marketing Dan Leary said his company has not run up against those trends while selling its iSCSI hybrid flash arrays.
“We haven’t seen those headwinds in our business,” he said. “We’re winning deals because we’re delivering better performance and better capacity with about one-third to one-fifth the amount of hardware that our competitors require. The primary thing limited our growth is the ability to hire and recruit headcount, and that’s why we’re investing heavily in the company. We’re not seeing any market limitations.”
That investment is also part of the reason Nimble is still losing money. It lost $13 million last quarter and $43 million for the year. The losses are expected to continue at least into late 2015, but CEO Suresh Vasudevan said the company will continue to invest and grow, and has around $208 million in cash.
On the product front, Nimble is investing in more enterprise features. It added capabilities to its CASL operating system last year that allows customers to set up clusters in scale-out arrays. Another item on the roadmap is Fibre Channel support. Vasudevan said on the earnings call that Fibre Channel support is planned for late this year to help win deals at large companies already invested in the protocol.
He said Nimble currently wins about 40 percent of its deals against FC SAN arrays now, but “at the same time, there are several large enterprises that have already made an investment in Fibre Channel and that becomes a stumbling block for us.”