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Nexsan the brave

 In a bit of a Friday surprise, storage systems vendor Nexsan Technologies today filed for an initial public offering (IPO) with the SEC.

The move is surprising not because of Nexsan’s financial situation, but because storage IPOs are so 2007.  IPOs in general are down this year with Wall St. fearing recession and waiting to see if the problems financial services firms are having spread to other sectors.

On the storage front, no company has gone public since 3Par last November. NAS vendor BlueArc and consultant firm Glass House Technologies filed for IPOs late last year but neither appears close to actually going public. Neither company has updated their S-1 filings with their latest earnings, which suggests they’re in no hurry to test the market.

Financial analysts and other industry sources say companies such as DataDirect Networks, Copan, and LeftHand Networks are eager to go public and probably would have filed by now if market conditions were better.

But Nexsan is brave enough – if brave is the word – to give it a shot. The systems vendor that specializes in SATA arrays for archiving probably isn’t as well positioned as some of the above mentioned vendors. Nexsan lost $3 million on revenue of $49.8 million for the year that ended June 30, 2007, and dropped another $2.3 million on $30 million in revenue during the last six months of last year. According to its filing, Nexsa has lost a total of $35.1 million.

Histories of losses haven’t stopped other storage companies from going public. Those that took the plunge in 2006 and 2007 – 3Par, CommVault, Compellent, Data Domain, Double-Take, Isilon, and Riverbed – had a quarter of profit at the most and almost all of them had never recorded a profitable quarter before their IPO. The same goes for EqualLogic, which had its IPO short-circuited by a $1.4 billion acquisition offer from Dell.

And while Nexsan‘s finances don’t look much different than those of Compellent’s or Isilon’s before they went public, at least there was a bullish IPO market when Compellent and Isilon went out.

So Nexsan’s progress deserves keeping an eye on. If they do make it public for a decent price, it could spark another rush like the storage market saw in 2006 that lasted until late 2007.

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