EqualLogic Seeks Own IPO In VMwares Wake

Is EqualLogic the next $100 million company? Don't be shocked as it could happen as the startup files for an IPO.

VMwares initial public offering may be getting the lions share of attention, but it isnt the only vendor to buck up the courage to go public.

Storage startup EqualLogic has registered with the U.S. Securities and Exchange Commission for its own initial public offering of common stock.

The moves comes as the explosion in data growth, the proliferation of server virtualization and the need for data protection and disaster recovery tools to preserve information continues to drive the storage market.

EqualLogic refused to answer questions about the IPO because it is in its registration period.

But according to a statement, Goldman, Sachs & Co. and Credit Suisse Securities (USA) LLC are running the Nashua, N.H.-based companys books for the IPO. The number of shares to be sold and the price range for the proposed offering have not yet been determined.

EqualLogic is part of a bumper crop of storage startups, including Lefthand Networks, aGami Systems, 3PAR and others, looking to lay siege to market share from the incumbents EMC, IBM, HP and Hitachi Data Systems by incorporating the iSCSI storage protocol into its products.

EqualLogic makes PS Series SANs, a combination of storage disk arrays and storage management software that use iSCSI, or storage over Internet Protocol, which is designed to be more cost-effective than traditional Fibre Channel storage systems.

According to IDC, storage capacity is increasingly being deployed on IP SANs and the iSCSI SAN market is expected to grow from $600 million in 2006 to $6.0 billion in 2011, a compound annual growth rate of 60.9%.

EqualLogic employs a virtualized architecture that untethers stored data from disks, allowing the storage arrays to share resources and balance workloads.

In May, the company added thin provisioning, which allows IT administrators to limit the allocation of physical storage to what applications immediately need. Capacity may also be added on demand at pre-set limits, so that companies can steer clear of buying and managing excessive amounts of disk storage.

PointerClick here to read more about EqualLogic and thin provisioning bandwidth.

EqualLogic is demonstrating a growth rate not unlike VMware, the EMC subsidiary that is capturing the hearts and wallets of Wall Street investors today.

EqualLogic said in its S1 filing that it had $68.1 million through 2006 on losses of only $0.5 million. In its first quarter of 2007 (ended March 31), the company boasted revenue of $23.8 million. Average that out over a full year and EqualLogic will approach the $100 million mark that made VMware famous a few years ago when EMC acquired it.

Mesabi Group analyst David Hill said EqualLogic may not be of the VMware caliber, but its got good products and good people to back them. In fact, he said EqualLogic is one of 10 or 12 companies out of 200 storage startup hopefuls that has a good shot to succeed.

"The hardest part is getting to that first $100 million," Hill said. "Thats something that very, very few companies get to. EqualLogic picked an iSCSI area that was going to take off and grow and they targeted it very nicely with quality products."

Time will tell. In the meantime, EqualLogic will focus on boosting its customer base of 2,500 customers across 30 countries.

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