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CEO says Compellent benefits from Dell / EqualLogic fallout

Compellent joined other storage companies including EMC and Data Domain in reporting a strong first quarter despite a down economy. The company’s revenues more than doubled year over year to $18.3 million, growth of 107% over the first quarter of 2007 and 9% over the previous quarter.

The company also is still a ways from profitability, and lost $1.2 million last quarter despite the increased revenue. CEO Phil Soran said on the company’s earnings call that this is because Compellent is growing and is adding operating expenditures such as salaries for new employees. Soran said he expects Compellent to be profitable by the second half of this year.

With the rest of the country in financial turmoil, how are storage companies staying strong? “Storage is the last thing that gets cut from the IT budget,” was Soran’s answer. I would also imagine it’s because storage has always been a conservative market–it doesn’t have as far to fall as some other markets.

Another thing benefitting Compellent, according to Soran, is the acquisition of midrange disk array competitor EqualLogic by Dell. It’s been well-publicized that EqualLogic channel partners have been wary of the deal, if not downright alienated by it, because of Dell’s poor reputation in the channel. Soran declined to give any specific numbers around how many channel partners have defected or how much new business it accounts for, but volunteered anecdotally that Compellent is seeing more large EqualLogic channel partners looking its way as a result of the Dell deal.

Still, Soran says the company has a ways to go when it comes to gaining that mind share. Echoing some of NetApp’s statements when it rebranded itself earlier this year, Soran said Compellent does well when companies look at its products but often doesn’t get brought to the table.

I also asked him whether or not Compellent is seeing significant business as a tier-2 disk array in large shops. He said yes, but also declined to break out any numbers.

Soran attributed Compellent’s growth to the attractiveness of its consolidation and thin provisioning features in a down economy, similar to the power and capacity savings that have reportedly kept money flowing in to Data Domain’s coffers. But Soran said Compellent’s chief competitor remains EMC, which doesn’t yet offer many of the features he was referring to–and EMC also reported a stronger-than-expected first quarter.

“They have a good brand,” Soran said.

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Beth, This is a bit sloppy. Where's the beef? Phil has been plying this wishful thinking since the Dell/EqualLogic acquisition was announced back in November.
Beth, You always know you’re doing something right when others copy your success. Check out Marc Farley’s response on our Storage @ Work blog -
Marc, not sure what you mean by 'sloppy'. "CEO _says_" are the operative words here. It's noted he wouldn't supply numbers.