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Squeak! - The fastest growing profitable
STORAGE companies in the US - 2001

See also:- click here for an updated version of this popular article
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Squeak! - the Solid State Disks Buyers Guide
Squeak! - the 10 biggest storage companies in 2008?
Squeak! - the Top 10 Storage Software Companies
article:- Flash Memory vs. Hard Disk Drives - Which Will Win?
article:- Sanitization Methods for Cleaning Up Hard Disk Drives
Squeak! - Why are Most Analysts Wrong About Solid State Disks?
Acquired companies, Manufacturers, Services Software, articles, Market research, news on MarketingViews
history:- the Fastest Growing STORAGE companies:- 2001, 2002, 2003, 2004
In the current recessionary conditions prevailing in the US computer industry, it would be understandable if many of you thought that the companies listed in this article were just lucky when they got their results in. You might also doubt if they could could do it again. But when you've spent most of the last decade analysing this segment of the computer industry as I have, and when you're old enough to have worked through a couple of serious recessions, it's hard to avoid coming to the following conclusions.
  • this recession, which was triggered by the capital wipe-out of the wasteful and irresponsible dot-com bubble, is not going to suddenly go away.
  • recessions do not impact all companies equally. Whereas most companies, and people do suffer, they provide a growth opportunity for products and services which can increase the efficiency of business operation. The take up of some new technologies is slower in good times, because there is less need for business to be efficient.
  • you can segment the US computer market into two economies.

    The first - associated with the desktop market and PC's is going to have a really miserable year in 2001. (FYI - This was published a week before IBM's Louis V. Gerstner, Jr., IBM chairman and chief executive officer, said "The desktop segment is hurting -- and it is not just a cyclical issue. This is a mature business, and it no longer drives the economics of the IT industry.")

    The second - associated with enterprise storage and multiprocessor rackmount servers is growing at phenomenal rates and may actually speed up as a result of the recession. In February Dell Computer reported that sales of its high-density rack-mounted servers had more than tripled, and accounted for more than 40 percent of Dell's server revenue. In March, GNP Computers, a manufacturer of SPARC compatible platforms for the convergent teledatacom industry announced that the company's gross revenues in 2000 increased over 230 percent from the prior year.

    That's because these technologies can automate and replace many non computing functions in traditional businesses, displacing sales, marketing and other white collar knowledge workers and replacing inefficient hangovers from the pre-electronic economy which companies have found hard to let go.
The negative consequences of the dot-bombs are hurting people everywhere. If you've just lost your job, or had 60% of your life savings disappear, or are facing a 10% reduction in your company revenue you may find it difficult to swallow that the dot-com bubble may have some good long term effects.

That may sound like a giant meteor has just landed on your house, and some mad optimist says cheerfully:- that with a bit of redevelopment, the site could be converted to a wildlife reserve or a lake.

Nevertheless, there will be some positive outcomes in the long term...

Most dot-com companies were at the extreme end of a technology utilization curve, but many of the lessons they provide will endure.
  • you can replace many business functions with computer technology. But the customer getting a benefit is not sufficient. The enterprise using the technology must ensure that the entire business process is profitable.
  • if what you're doing is inefficient, or wasteful, then scaling the process up makes your business sink faster. Many newly enriched dot-coms handed over large parts of their investors' capital to the TV advertising industry, without bothering to test whether that was a sustainable method of acquiring customers.
  • the dot-com bubble speeded up the penetration of internet access everywhere. This will enable the next generation of business-savvy companies and educational institutions to benefit from the low cost information exchange, content delivery, and micro transaction costs which are the real strengths of this technology.
It looks like it will take more than a hit from a giant meteorite, or a worldwide recession to slow down the growth of most of the companies listed below.
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Zsolt Kerekes - Publisher
In compiling this list I looked at US companies which had annual revenue of at least $50 million, for which their primary business was storage.

The company had to be profitable in the reported period, and could be private or publicly listed. I also contacted some of the world's largest computer companies to see if they would disclose data for their storage business units.

Should your company be on this list?

We announced this article for 3 months before running it, and then ran it on this site for 3 weeks during which we accepted last minute updates and corrections. Any company which does not appear in this list and thinks they should be, should ask themselves what they pay their marketing department for, and will have to wait till next year.

STORAGEsearch is not a financial investment publication. It's a buyer's guide. Some companies use different reporting periods, and I've taken the view that if the storage market situation has greatly improved during the last 6 months or so, perhaps due to new product introductions, that's more important than something which happened maybe as long as a year ago. I've included data from more than one quarter as a sanity check if there have been very large changes or uncertainty in the data I've quoted.

All the data comes from press releases on the original company's web site, or from press releases which we have run on this site. I've included the minimum amount of data required to show that each company deserves a mention in this article.

Thanks to the readers who have contributed to this article.

If you don't see your fast growing company in the top 10 list below...

Remember what I said about the "profitable" qualification above.

For example:- Emulex (Nasdaq:EMLX) reported April 19, 2001 results for its third fiscal quarter ended April 1, 2001. Revenues expanded to $60.4 million, up 65% from the same quarter a year ago. But Emulex reported a net loss of $24.5 million.
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Squeak! - The fastest growing profitable storage companies in the US

Companies are listed in alphabetic order Supporting data
ADIC REDMOND, WASHINGTON - March 21, 2001 - ADVANCED DIGITAL INFORMATION CORPORATION (NASDAQ/NMS Symbol: ADIC), one of the world's leading independent storage solutions providers, today announced that sales and bookings to date for the current quarter ending April 30, 2001 remain consistent with the previously announced target of approximately 40 percent annual revenue growth. The Company noted that it may be growing faster than underlying economic trends would suggest because of the impact of new products, expansion of existing OEM sales channels and payback on investments made in branded sales channels over the past several months.

REDMOND, WASHINGTON - February 14, 2001 - ADVANCED DIGITAL INFORMATION CORPORATION (NASDAQ/NMS Symbol: ADIC) today announced sales grew 41 percent to $90.1 million for the first quarter ended January 31, 2001 versus sales of $63.9 million for the same period a year ago.

In the fiscal year 2000 - total revenue grew by 21 percent.
CNT MINNEAPOLIS, February 22, 2001 - CNT® (Computer Network Technology Corporation; Nasdaq: CMNT) today reported financial results for the period ended January 31, 2001. For the fourth quarter of fiscal year 2000, revenues totaled $47.0 million, an increase of 46 percent from the fourth quarter of 1999.

For fiscal year 2000, revenues totaled $176.1 million, an increase of $50.1 million, or 40 percent above fiscal year 1999.
Datalink April 18, 2001 Datalink Corporation (Nasdaq:DTLK), a premier independent information storage architect, reported that revenues for the quarter ended March 31, 2001 rose 46% to $40.9 million from $28.0 million in the same period a year ago.

For 2001, Datalink expects revenues to range from $165 to $175 million, a 20% to 27% gain over 2000.


MINNEAPOLIS - June 21, 2001 - Datalink Corporation (Nasdaq:DTLK) today presented a revised outlook for its second quarter results for the period ending June 30, 2001. Editor - The company now expects year to year revenue for the quarter ending June 30, 2001 to decline.
EMC Hopkinton, Mass.- April 19, 2001 EMC Corporation (NYSE:EMC) today reported strong financial results for the first quarter of 2001, reflecting its expanding lead in the worldwide market for information storage solutions, one of the fastest-growing business segments in today's economy. Information storage revenue for the first quarter grew 37% compared with the first quarter of 2000 to $2.26 billion. This strong quarterly growth was highlighted by 158% year-to-year revenue growth in networked information storage, which totaled $833 million during the quarter; and 73% year-to-year growth in information storage software revenue, which reached $468 million. Information storage-related revenue represented 97% of EMC's total consolidated revenue during the quarter.

February 21, 2001 - EMC Reaffirms 2001 Goal and Comments on Business Climate Through the fourth quarter of 2000, EMC's results have been extremely strong despite the emerging slowdown in the United States economy. Thus far in the first quarter of 2001, global demand for EMC's information storage systems, software and services is strong. Pockets of the U.S. have been challenged by a sharp drop-off in spending by Internet companies, but overall demand from large global companies, deployment of networked information storage, and the growth of international business continue to be strong. EMC continues to march toward its revenue goal of $12 billion in 2001, in a total market anticipated to exceed $50 billion. Since last November, EMC Executive Chairman Mike Ruettgers has been sharing his view that the largest risk to today's U.S. economic climate is the risk of self-fulfilling prophecy. If enough pundits continue to predict that the U.S. economy will slow further, it will do just that. This is a situation that EMC, like the rest of the world, is watching closely. Given this uncertain U.S. economic climate, EMC expects revenue growth to be in the range of 25-35% for 2001.

January 23, 2001 - For the full 2000 fiscal year, EMC's total revenue was $8.87 billion, up 32% over 1999.
INRANGE Technologies LUMBERTON, NJ, FEBRUARY 13, 2001 - INRANGE Technologies Corporation (Nasdaq: INRG), a leading provider of networking products and services for storage area networks (SANs), and data and telecommunications networks, today reported record revenues of $71.1 million, net income of $7.4 million and earnings per share of $.09 for the quarter ended December 31, 2000.

FOURTH QUARTER NET INCOME UP 148% The company reported record revenues for the fourth quarter of $71.1 million, a 48% increase over fourth quarter 1999, and up 11% sequentially over the third quarter 2000.

Revenues for the year ended December 31, 2000, were $233.6 million, a 16.5% increase over 1999.
Network Appliance SUNNYVALE, Calif.- Feb. 8, 2001 - Network Appliance, Inc. (Nasdaq:NTAP), reported revenues for the first nine months of the current fiscal year totaled $780.3 million, an increase of 106% compared to revenue of $379.3 million for the first nine months of the prior fiscal year.
Overland Data SAN DIEGO - Jan. 18, 2001 - Overland Data, Inc. (Nasdaq: OVRL) today reported that revenues for the second quarter were a record $43,586,000, a 59% increase over revenues of $27,469,000 in the second quarter of the prior fiscal year.

Revenues for the six-month period of the current fiscal year were $81,313,000, a 62% increase over revenues of $50,314,000 during the same period of the prior fiscal year.
OTG Software For the year ended December 31, 2000, OTG Software (NASDAQ:OTGS) revenues were $43,817,000 a 72% increase over the previous year. Net income was $ 4.3M. From 10-K405 filing on 03/07/2001

Editor's note:- although the quoted revenue figure is below our $50M threshold for this article, the company's revenue for the last 4 quarters, I believe would comfortably be above it.
QLogic Aliso Viejo, Calif., January 23, 2001 – QLogic Corporation (Nasdaq:QLGC) announced today that gross revenues for its third fiscal quarter ended December 31, 2000 rose 73% to a record $97.2 million, compared to the $56.4 million reported for the same quarter a year ago.

For the first nine months of fiscal 2001, gross revenues expanded 72% to $262.2 million, compared to $152.1 million for the same period a year ago.
Qualstar CANOGA PARK, Calif., January 31, 2001 - Qualstar Corporation (Nasdaq: QBAK), a manufacturer of tape libraries, today reported that revenues grew 39.6% to $15.5 million during the second quarter ended December 31, 2000 over the same period last year.

Revenues for the six months ended December 31, 2000 were $29.4 million, a 30.7% increase over the $22.5 million during the same period of the prior fiscal year.
XIOtech Eden Prairie, Minn., April 9, 2001 - XIOtech® Corporation, a wholly owned subsidiary of Seagate Technology Inc. today announced that its revenue increase of 386 per cent from 1999 to 2000 is anticipated to outpace that of its competitors in the worldwide disk storage systems market, according to a new report from International Data Corporation (IDC). In its 2000 Worldwide Disk Systems Market Forecast and Analysis, IDC estimates that XIOtech's growth will be higher than all other disk storage systems vendors including the market leaders. Disk storage systems include SANs, NAS, disk arrays and disk systems internal to servers.

Editor's note:- XIOtech is a privately owned company and for commercial reasons does not want to disclose exact details of its revenue at this time. However they have satisfied me that they should definitely be listed in this article.

...well, as we now know, in the months following the publication of this article, the recession got even worse, and even EMC reported a 6% year on year decline in their 2nd quarter, reported in July, 2001. But amazingly, some companies, which weren't mentioned in our original article, put out press releases suggesting that the software storage market was still an area of high growth. I'll be updating this section from time to time, as we get relevant announcements.

July 17, 2001 - Pegasus Disk Technologies today announced record sales for the second quarter of 2001 for its InveStore Storage Management Software utilized in applications requiring reliable and secure long term storage for critical data. Pegasus reported that sales in the second quarter of 2001 grew 59% over the same quarter in 2000, and on average increased 46% over the same period in the past 3 years. Pegasus supplies its InveStore software to major OEMs and ISVs for integration into back-up and archive system solutions. Pegasus' customers are primarily in the medical, financial, insurance, law enforcement, e-mail and web based mass storage environments where compliance with industry and government record and data storage regulations is critical for long-term access and any potential litigation issues requiring stored electronic evidence.
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