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Squeak! - The fastest growing profitable
STORAGE companies in the US - 2002

published May 2002
See also:- click here for an updated version of this popular article

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history:- the Fastest Growing STORAGE companies:- 2001, 2002, 2003, 2004
The results below speak for themselves. These companies have hot products which people want to buy. The companies are well managed businesses. Success brings its own rewards, because buyers prefer to deal with suppliers who are likely to be around longer.

One of the companies from last year's list, OTG Software, was acquired by Legato Systems recently. That seems to be the common fate of successful storage software companies. Only one company from last year, Overland Data, made it onto this fast growing list for a second consecutive year.
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..........The fastest growing profitable storage companies in the US - 2002..........

Companies are listed in alphabetic order Supporting data

Dell Computer Austin, Texas - May 16, 2002 - Dell reported on their first-quarter (which ended May 3). Net earnings were $457 million, or 17 cents per share, on revenue of $8.1 billion. Results for the period were essentially identical to those for the first quarter one year ago.

Total storage capacity shipped by Dell during the quarter increased nearly 70% from one year ago. External systems grew to 49% of company storage revenue. Storage sales were up more than 20% sequentially and current demand suggests a higher rate of growth from Q1 to Q2. The category is both Dell's fastest growing and most profitable as a percent of revenue.

I/OMagic SANTA ANA, Calif.--Feb. 21, 2002--I/OMagic Corp. (OTCBB:IOMC - news), a leading developer and marketer of optical storage, digital entertainment and peripheral PC products, today announced that its optical storage business unit has grown significantly over the past year. The company posted more than 1.5 million unit sales for this division in 2001 -- up 260% over last year. I/OMagic will expand its optical storage offering by soon introducing both internal and external 40x12x48 CD-RW drives -- the industry's fastest burners to date.

Iron Mountain BOSTON, May 1, 2002 - Iron Mountain Incorporated (NYSE: IRM), the global leader in records and information management services, today reported higher revenues and Adjusted EBITDA for the quarter ended March 31, 2002. Iron Mountain's total consolidated revenues for the quarter ended March 31, 2002 grew to $313 million, an increase of 10 percent compared with the quarter ended March 31, 2001. Storage revenues increased 9% to $183 million for the first quarter of 2002 from $168 million for the same period in 2001. This marks the 53rd consecutive quarter for which Iron Mountain has reported increased storage revenues. Storage revenues, which are considered a key performance indicator for the records and information management services industry, are largely recurring since customers typically retain their records for many years.

Net income was $13 million or $0.15 per share on a diluted basis for the first quarter of 2002.

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Overland Data


2nd consecutive year featured in this "fastest growing" list
SAN DIEGO – April 23, 2002 – Overland Data, Inc. (Nasdaq: OVRL) today reported its fiscal 2002 third quarter and nine-month year-to-date results, and also formally announced the launch of a new software business unit by the Company. Third quarter revenues for fiscal 2002 grew 15.7% reaching $42.8 million, compared to $37.0 million in the third quarter of fiscal 2001. Net income for the third quarter of fiscal 2002 was up nearly 150%, hitting a record $2.1 million, or $0.18 per fully diluted share, compared to $850,000, or $0.08 per fully diluted share in the third quarter of fiscal 2001.

Revenues for the nine-month period ended March 31, 2002 were $128.4 million compared to revenues of $118.3 million during the same period of the prior fiscal year. Net income for the first nine months of fiscal 2002 amounted to $5.1 million, or $0.46 per fully diluted share, compared to net income of $4.0 million, or $0.37 per fully diluted share, for the corresponding period in fiscal 2001.

Christopher Calisi, president and CEO of Overland Data, said: "My goal when arriving at Overland a year ago was to capitalize on the Company's success and broaden the scope of our business. ...Our Neo product family represents the most successful product launch in the Company's history. Recently, Freeman Reports identified Overland as the market leader and fastest growing mid-range tape automation vendor, citing an increase in market share from 37% in 2000 to 57% in 2001.

Precise Software Solutions WESTWOOD, MA. – April 23, 2002 --Precise Software Solutions (Nasdaq: PRSE), a leader in optimizing business through Application Performance Management, today reported its financial results for the first quarter ended March 31, 2002. Revenues for the first quarter of 2002 grew 49 percent to $17.1 million compared with $11.5 million for the first quarter of 2001. The Company reported a pro forma operating income of $672,000 or $0.02 per share, for the first quarter of 2002, compared with a pro forma operating loss of ($726,000), or ($0.03) per share, in the same period last year1. The Company reported a net income of $650,000 for the first quarter of 2002, or $0.02 per share, compared with net income of $29,000, or $0.00 per share, in the same period last year.

"Precise had a solid first quarter 2002 in spite of the typical seasonality of the quarter, and amidst a challenging economic climate. While we did not meet all of our expectations, I am pleased with the overall performance of our company," said Shimon Alon, Chief Executive Officer of Precise Software Solutions. "We continued to enjoy strong loyalty from our existing customers, we strengthened our leadership position in the Application Performance Management marketplace, and we achieved record revenues from international sales, all while increasing our profitability."

Western Digital Apr. 25, 2002 – Western Digital Corp. (NYSE: WDC) today reported revenue of $595 million (16% year on year growth - ed.) on unit shipments of approximately 8.1 million, and net income of $15.2 million, or $.08 per share, excluding non-recurring gains, for its third fiscal quarter ending March 29, 2002. The Company's hard drive business generated $22.3 million of operating income in the quarter, compared with $15.3 million in the second fiscal quarter, while new venture operating losses were reduced to $4.3 million from $4.9 million in the second quarter. Including non-recurring tax benefits and investment gains totaling $4.0 million, net income and earnings per share were $19.2 million and $.10, respectively.

In the year-ago period, the Company reported revenue of $512 million on unit shipments of approximately 5.8 million, and a net loss of $6.1 million, or $.03 per share, excluding non-recurring items. Including non-recurring gains from bond redemptions of $400 thousand, the year-ago net loss was $5.7 million, or $.03 per share.

Total gross margin in the March quarter rose to 13.6 percent from 12.3 percent in the second fiscal quarter and 12.4 percent in the year ago period. The Company achieved better than expected cost efficiencies in the quarter based on its cost-competitive WD Protégé® 5400 RPM value line, shipments of its WD Caviar® 7200 RPM product platform, and the successful ramp of 40 GB-per-platter technology into volume production.
Finding the winners in a difficult market.

I
n April 2002 I published the first version of this article. The IT recession had just started to bite, but there were still many fast growing company reports to soft through in compiling that list. Alas, this year the research was all to easy. With most computer companies reporting revenue declines of between 10% to 50%, adding the double test of being profitable was a hard test. But these are the companies which made it.

Many of you seem to find this kind of information useful, because during the 12 months following its publication this was consistently one of the top 3 most popular articles on StorageSearch.com.
Zsolt Kerekes - Publisher
In compiling this list I looked at US companies and business units which had annual revenue of at least $50 million in computer storage. The storage business unit had to be profitable in the reported period, and could be private or publicly listed.

Should your company be on this list?

If you work in marketing, and have checked that your own company's results mean you should be on this list, then email Zsolt@STORAGEsearch.com with the relevant info and or links on your site. Please don't send me information which is too old. I'm only interested in results for the period ending January to May 2002, so don't tell me how well you did before the recession...

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

Some storage companies which have reported high growth rates recently haven't been listed in here either because they declined to give us the actual numbers for competitive reasons, or because they made a net loss, or because their revenue fell below our threshold.

Thanks to the readers who have contributed to this article.
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Congratulations if your own company has been listed!

It's quite an achievement, and worth shouting about.

If you're a marketer in one of the companies listed here, you have our permission to quote that you are one of the fastest growing profitable STORAGE companies in the US - 2002 as ranked by STORAGEsearch.com. You can quote it for 12 months from this publication date.

Please make sure you get the spelling right, there are lots of storage portals on the web, but only one of them is aimed at readers who aren't scared of mice.
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Nibble May 2002:

Is the Recovery Going to be Worse for Storage Vendors than the Recession?


In looking over the financial reports from hundreds of US storage companies in recent weeks, I couldn't help feeling a sense of unease. Those storage companies which are growing and making money are a rare breed.

Is the IT Recession really over?

Well, apart from some headline basket cases, it seems that way. There are more disk drives being shipped than ever before, and there are plenty of companies with very high revenue growth rates. The only problem is, that almost no one is making any money out of selling computer systems or storage. We're reporting daily on new rounds of VC investments going into storage companies, so that's another sign that the market is on an upward curve. I worry that we could be heading into a kind of doomsday scenario where demand for storage grows, and the amount spent on storage increases but still no one manages to make any profit.

Organizations do crazy things sometimes. In World War I, after years of trench warfare produced no gain in territory, the allies made the cynical calculation that if they continued to pour men into bloody battle at the same rate as the Germans, they would still win the war, simply because they could afford to lose more men.

There are more companies than ever fighting for market share in every product category. That's good for buyers because they can shop around for bargain products which exactly suit their needs. Most startup storage companies are finding that the new, unique product ideas which they thought up two to three years ago when writing their business plans, were also thought of by maybe a dozen or so other companies. And some of those other startups have already been acquired by bigger more established vendors. So the clock to gain market share is ticking.

The lesson of Dell can't be ignored. You can gain market share and be profitable by being the low cost supplier. But most companies haven't got the time to reach profitability, or become the most efficient producer, and will be tempted to use learning curve pricing on its own to crank up their revenue. That will only work as long as their cash keeps flowing.

As the size of the storage market increases, and the prize of winning market share becomes more tempting, there's a growing risk that companies will do crazy things equivalent to sending more troops over the top in WWI. It wasn't worth it then, and it's not worth it now. Managers in storage companies should look hard at what they're doing and start focusing more on profitability than revenue. Otherwise their companies won't have a future.

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