Storage Soup

Jul 29 2016   9:55AM GMT

Quantum results indicate ‘stable’ backup market

Dave Raffo Dave Raffo Profile: Dave Raffo

Tags:
Data protection
Quantum

It’s no secret that storage sales have been hard to come by over the last year or two. Most of the large vendors experience product revenue decreases or small increases quarter after quarter. But the data protection market appears to be on the upswing, or least it’s no longer on the downswing.

Backup software vendors Veeam Software and Commvault reported positive earnings growth for last quarter, and backup hardware vendor Quantum this week said its revenue increased and exceeded its previous forecast.

Quantum’s revenue of $116.3 million last quarter increased $5.4 million, or five percent, over the same quarter last year. The fastest growth came from Quantum’s StorNext scale-out file system, which grew 11% to $30.8 million. But that’s less than 30% of Quantum’s overall revenue. Its data protection revenue increased six percent to $76.9 million. That includes DXi disk backup revenue of $21.5 million (up 24%). Tape automation revenue dropped four percent to $42.6 million, but, hey, that’s tape. Tape OEM revenue did increased six percent, and tape devices and media revenue actually grew 17% to $12.8 million.

“We believe it’s indicative of a more stable traditional storage market, including tape backup, than the industry has seen over the last couple of years,” Quantum CEO Jon Gacek said of the results on the company earnings call. “One quarter does not a trend make, but as we look at what’s going around it, the data protection side has been solid.”

Quantum CFO Fuad Ahmad added: “As mentioned in previous calls, we’ve been impacted by overall market weakness in general purpose storage including data protection over the past year. However, we believe the market has begun to stabilize and our results reflect that.”

We don’t know yet if the overall market is turning, or vendors such as Veeam, Commvault and Quantum are taking business from larger rivals. There is no visibility from the largest data protection vendors. EMC did not break out data protection revenue in its bare-bones earnings report as it prepares to merge with Dell. IBM does not give specific data protection figures, and Veritas is now a private company and does not report earnings.

Quantum received a boost from several large StorNext deals last quarter, mainly in video surveillance and media and entertainment. Gacek spoke of an $800,000 follow-on purchase by a large consumer electronics company and a $200,000 deal with a virtual reality company. He said there was another $200,000 in Asia and a $150,000 installation at a government medical center. And a previously announced public cloud project deal is expected to bring Quantum at least $20 million this year.

Quantum forecasts a revenue range of $118 million to $122 million this quarter. Gacek said he expects $500 million in revenue this fiscal year (last quarter was Quantum’s first fiscal quarter) and he expects scale-out to become 35% to 40% of total revenue.

The vendor lost $3.8 million but that was down from $10.8 million last year. And it generated $5.2 million in cash from operations compared to using $13.6 million in cash a year ago.

 Comment on this Post

 
There was an error processing your information. Please try again later.
Thanks. We'll let you know when a new response is added.
Send me notifications when other members comment.

Forgot Password

No problem! Submit your e-mail address below. We'll send you an e-mail containing your password.

Your password has been sent to:

Share this item with your network: