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StorNext sales help Quantum scale revenue

With its StorNext revenue rising while data protection sales remained flat, Quantum achieved its second straight growth period last quarter.

The StorNext file system is at the heart of Quantum’s scale-out data management products. Scale-out storage made up more than one-third of Quantum’s revenue according to its Wednesday night earnings report. However, Quantum will have to continue to land big scale-out deals to maintain growth. Its forecast for this quarter calls for a sequential drop in revenue.

Quantum’s $135 million in revenue in the quarter increased 15% from $117 million in the same quarter last year. A 56% increase in scale-out storage drove the revenue surge. The company reported $3.8 million in profit for its second straight profitable quarter.

Scale-out revenue hit $47 million, its highest quarter ever. CEO Jon Gacek said the increase came in sales to media and entertainment, video surveillance and technical industries such as life sciences and gas exploration. Quantum scored $1 million-plus deals with a media company and a consumer electronics company. Quantum added 85 scale-out customers in the quarter.

Quantum’s backup revenue was flat year-over year at $78.5 million. Tape automation revenue dropped $3.2 million to $45.2 million while disk backup increased $600,000 to $18.7 million, and devices and media increased to $14.6 million from $11.6M. Gacek said Quantum added 60 new branded tape automation customers and around 40 disk backup customers in the quarter.

“We’re getting growth on the scale-out side,” Gacek said in an interview after Quantum’s earnings call. “We still have lots of opportunity for improvement there. We have a unique product for video surveillance and we’re winning deals.”

Gacek said Quantum’s DXi disk backup sales “have been more stable, and they’re more reflective of the overall storage market.” He said the backup appliances do well in competitive deals but they are not the company’s main focus.

“If we have extra money to spend on go-to-market, we’re spending it on scale-out,” he said. “We’re not spending a lot of money to drive growth on disk backup. The opportunity is better on the scale-out side.”

Despite the growth expectations around StorNext, Quantum forecast a drop in revenue this quarter. Its forecast of $125 million to $130 million represents an unusual decline in the final quarter of the year, which is usually the best revenue period for storage vendors.

Gacek admitted the fourth calendar quarter is usually Quantum’s strongest but the uptick in larger deals makes it tough to predict. He is taking the conservative approach to guidance.

“We’re setting guidance based on what we see and we’re excluding large deals that we can’t predict in good conscience,” he said. “We’ve been closing those deals and that’s been driving us higher. If big deals close this quarter, our revenue will be higher, but we’re trying to be prudent.”