Violin Memory, Pure Storage hope to avoid Fusion-IO example

NYSE photo

Everything looked rosy for Fusion-IO when it went public at $19 a share. It closed Thursday down more than 40 percent at $10.84. Shown here are, from left, founder and Chief Marketing Officer Rick White, Apple co-founder Stephen G. Wozniak, who is Fusion-io's "chief scientist," and David A. Flynn, who was replaced earlier this year as CEO.

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Cromwell Schubarth: Senior Technology Reporter- Silicon Valley Business Journal; Email | Twitter | Google+

Violin Memory and Pure Storage this week made bold promises about future IPOs but first they will have to avoid the example of Fusion-IO, the flash storage competitor where Apple co-founder Steve Wozniak is "chief scientist."
Salt Lake City-based Fusion-IO went public in spectacular fashion back in 2011, raising $233 million when it sold its IPO shares for $19 each.
The stock soared as high as $39.60 within five months on the promise that flash storage would replace the spinning disks that have been the backbone of data center for years. But the shares closed Thursday at $10.84, down about 43 percent from the IPO price.
The speed of flash memory tantalizes companies that need faster access to the masses of data being created in the mobile computing era. Two major contributors to that data deluge are Facebook and Apple, Fusion-IO's biggest customers.
But the cost of flash storage has remained high, going today for about $6 or more a gigabyte stored compared to the 50 cents to $1 per GB of disk storage sold by legacy companies such as EMC and NetApp. Hell, there are even places where tape, disks' predecessor technology, is still being used to store data that nobody needs to get to fast.
Storage upstarts like Fusion-IO and Violin Memory say they have figured out ways to make flash cheap enough to be the right answer for customers who need their data immediately.
Pure Storage goes further, saying that it has figured out a way to apply advanced software technology to flash to make it nearly as cheap as disks. Its president, David Hatfield, told me that revenue at the Mountain View company has grown by 50 percent sequentially since it began making sales a couple of years ago.