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By | Chris Mellor 28th April 2010 14:15

3PAR adds offices serving five Apac countries

Nice, but how much does it help?

3PAR has added five Far Eastern countries to its sales geography in one month, and is gaining customers in Norway and South Africa.

This month 3PAR has opened up operations in India, China, Australia, New Zealand and Korea. These all have local sales offices except New Zealand, which is covered by the Sydney office. There was already an office in Japan. Vaughan Woods is the regional director for the Asia Pacific 3PAR region and is based in Singapore. Tim Pitcher is responsible for international sales and the Asia-Pacific expansion would be down to these two people.

3PAR has also announced that it's partnering with Purity, a systems integrator in Norway, and a number of deals are in the pipeline.

So 3PAR is now able to gain customers in Norway in the EMEA region and in five Asia-Pacific countries, when practically speaking it couldn't do so before. If each country sells 10 systems a year that gives 3PAR 60 extra system sales a year. The company has been suffering from increased competition while costs in research and development (R&D), sales and marketing have gone up. Revenues in the last quarter of 2009 were $50.1m, compared to $48.16m in the same period in 2008. Support revenues increased while product revenues decreased due to lowered prices intended to win new customers.

Over the same period sales and marketing costs went up around $1.5m while R&D costs increased by around $0.82m. These factors turned a $507,000 profit in the last quarter of 2008 into a $474,000 loss in the last 2009 quarter. It looks like 3PAR has decided that international sales expansion is the way to get more sales revenue when the competition - such as EMC - is squeezing prices in new customer deals.

Another 60 system sales a year should provide a healthy fillip to sales revenue, but as we don't know the average deal size we can't work out how much they'll help. 3PAR has bookings targets for its sales execs and these are understood to be $850,000 to $900,000 a quarter - say $3.4m a year. Assume one notional sales exec per country above and 3PAR could gain an extra $20.4m annual sales revenue if every one does the business. Adding that revenue, say $5m a quarter, would restore the company to profit and to growth. New customers take time to travel through the sales funnel and we could look to a revenue boost from these new sales countries in the second half of this year.®

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