As expected, 3PAR's results were not great in a bare numbers sense, but a comparison with EMC and other enterprise storage array competition implies that 3PAR is gaining market share.
The company's virtualised InServ arrays compete for enterprise storage business with EMC Symmetrix, HDS USP, HP EVA and XP, and IBM's DS8000 and XIV products. InServ products stand out for their early and strong focus on thin-provisioning and their popularity with service providers.
For its first financial 2010 quarter, 3PAR's revenues were $44.5m, up 4 per cent year-on-year but down 8 per cent compared to the previous quarter. There was a net loss of $1.8m, which compares to a $678,000 profit a year ago. CEO David Scott said this about the numbers: "Though disappointed by our revenue shortfall against expectations, we are pleased that we grew year-over-year in a difficult economic climate, and that we continued to take market share."
Aaron Rakers of Stifel Nicolaus checked this by running the numbers through his spreadsheets, and came up with these comparisons: 3PAR's product revenues were down 3 per cent year-on-year, but EMC Symmetrix revenues fell 28 per cent y-on-y in EMC's second 2009 quarter, to $550m from about $760m a year ago, according to Raker's model, a decline nine times greater than 3PAR's.
Raker's model shows HDS product revenues were down 19 per cent and IBM's disk storage revenues were down 20 percent, both falling roughly five times faster than 3PAR product revenues. He said this comparisons with EMC, HDS and IBM's revenue pattern "implies share gains" by 3PAR.
Without being unkind, we can say 3PAR is a one trick storage array and service pony and doesn't have any balancing revenues from infrastructure software, system-focussed global services, servers, PCs or networking. So a comparatively puny fall in storage product revenues affected its bottom line considerably, whereas EMC and IBM with their vastly larger revenue lines were much less badly affected.
3PAR says it saw considerable price cuts by EMC as it fought to repel 3PAR incursions into its accounts, and some giveaway trial offers for XIV from IBM. There was little evidence of the new V-Max Symmetrix; perhaps that is waiting for the coming FAST automatic data allocation to storage tiers before customer interest ramps up.
The outlook is for full financial year 2010 revenues to be $190m - $205m, the same range as the prelimanary statement. If its competitors continue to lose share relative to 3PAR then, when the economy picks up, 3PAR could benefit disproportionately and be a much stronger company as a result. ®