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back to article Nimble nearly nudging $200m: Claims all-Flash grunt with partial iron

Hybrid array high-flier Nimble Storage has upped its revenues by 110 per cent annually - but deepened its losses by 109 per cent, as it eschews profits for growth. In its first fiscal 2015 quarter revenues were $46.5 million compared to $41.7 million in the previous quarter and $22.1 million a year ago. The net loss was $19.6 …

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Silver badge
Meh

Really?

".....Nimble is intent on killing them and, so far, has not put a foot wrong." You can only sell at a loss for so long before the shareholders and VC lose interest. And if the only reason you are selling is because you are selling at a loss, when the shareholders run out of patience and you jack the price up to make a profit then it could be Nimble that will be killing itself. I thought Nimble's best hope was being bought out by CISCO to plug into the UCS product, but the purchase of Whiptail instead seems to have killed that idea.

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Bronze badge

Re: Really?

that strategy is worked well for Fusion IO and Violin.

oh wait, never mind.

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Anonymous Coward

Re: Really?

Guys and Editor,

There is a slight difference between the headline loss numbers and cash burnt by the company during a quarter. Free Cash Flow (or simply "net cash spent") is more interesting for these companies which are still trying to grow revenue aggressively.

NMBL has been burning $3.3M per quarter for last two quarters.

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Price...

...is the reason they are tearing it up around here. If they are selling at a loss, then they need to be very explicit with customer as to what their plans are for profit. Growth is good, but if you aren't profitable there will be no money to reinvest in R&D and the product will stagnate.

That said, we resell HP and EMC as well as Nimble, and Nimble is outselling them both, combined, as of late.

A Cisco buy would have been a huge boost to their business, but the growing relationship between Cisco and Red Hat (after their Inktank acquisition) means they could deploy scale-out Ceph nodes on their C240 servers connected to a Nexus fabric, and leverage Invicta for flash acceleration. I don't know if Cisco really needs them any more. I guess we'll see if they decide to buy either of them (or both, that would piss off a lot of people and be hilarious for the industry in general).

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Anonymous Coward

Er... You are kidding right? What's Cisco going to do with Invicta? No HA = Tier 4 use at best, SSD Flash for Tier 4? Surely thou je$t!!!

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Er... You are kidding right? What's Cisco going to do with Invicta? No HA = Tier 4 use at best, SSD Flash for Tier 4? Surely thou je$t!!!

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At this stage when a public company like Nimble has a growth in losses (109%) that is matching the growth in revenue (110%) someone should be screaming "fire" and heading for the exits. This is circa 2000 internet bubble economics applied to an infrastructure company. Has measurement of the growth in losses become the equivalent of justifying stock valuations based on the growth in number of eyeballs?

There is a train wreck coming for new investors who have been sucked into the stock. I pity those that bought in the public market all the way up to $58 and have got killed with it back down to $28. The shorts will let it run back up from here, despite the end of the lock up, to maximize their opportunity and then the next down trend won't stop at $20. It's painful to watch what looks like a Ponzi scheme that's about to burst.

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Get all the facts

DISCLAIMER: Nimble Employee

I do urge you to read the full earnings report and analyst feedback. There's quite a bit more to this story if you don't focus on one factor. For example, margins continue to rise, are some of the highest seen in the industry, and continue to beat expectations. In other words, Nimble isn't selling just by dropping price...for once it's actually a company selling on value. If you look at the trend of various costs vs. revenue, you'll find they're all going in the exact direction that investors want (and ahead of expectations). Look at operating costs. Look at timing expectations for profitability. Keep in mind the age of the company and the fact that the IPO was less than 2 quarters ago. There's really more to it than just the revenue vs. loss rate in itself. But hey, everyone is entitled to their opinions.

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Anonymous Coward

Release of our Fibre Channel capability by the end of FY15....

They must be joking: "FC by the end of FY15" !!!!

FCP it's a must-have for enterprise storage for last....well, i don't remember: just a big bunch of years!!! If they pretend to be taken seriously by CUSTOMERS, better hurry up with this FC15 milestone.

Sub-milliseconds latency doesn't match very well with IP protocols (unless you ask Cisco, aka TCPIzilla). In fact, some AFAs nowadays just come with optional Infiniband ports just to get better latency....so, wake up Nimble, iSCSI is not the best way to fight AFAs boxes.

Cheers!

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Re: Release of our Fibre Channel capability by the end of FY15....

DISCLAIMER: Nimble Storage Employee

Nimble's Fiscal Year is not the same as Calendar Year. FY15 ends on January 31st, 2015. In other words GA FC support is expected within the next 7 months at most.

While I don't disagree with you one bit that FC is a major enabler for the enterprise, I do think you'd be surprised at how many enterprise shops have been more than willing to take on iSCSI with Nimble. FC is going to vastly increase the reach for sure, you can clearly see the stats within the earnings report on enterprise adoption.

As for latency, I must vehemently disagree. If you are comparing iSCSI of yesteryear on 1Gb switches with low port buffers to 8Gb FC, then absolutely! If you have a properly implemented 10Gb iSCSI network optimized for storage traffic and compare to 8Gb FC, then your statement doesn't hold true. And at the end of the day, the few microseconds of difference you might be able to find are irrelevant compared to multi-millisecond latency in legacy storage.

As for AFAs, FC has nothing to do with performance improvements on a Nimble array. We can (and do) go head to head with them with iSCSI and win. FC is simply an enabler to go after environments that require FC.

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WTF?

Re: Dmitriy Re: Release of our Fibre Channel capability by the end of FY15....

".....If you have a properly implemented 10Gb iSCSI network optimized for storage traffic and compare to 8Gb FC....." Apart from the fact I'd argue that little statement, the competition have already moved up to 16Gb FC, and 32Gb is due in 2016. Nimble's own inclusion of FC on their roadmap underlines the logical fallacy of your claim that iSCSI is better than FC - if it were true, Nimble would be spending the money on demonstrating iSCSI's superiority to customers rather than integrating additional FC ports into their products. Are there 40Gb iSCSI ports on the Nimble roadmap?

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Anonymous Coward

Re: Dmitriy Release of our Fibre Channel capability by the end of FY15....

No doubt, when the major storage vendors start releasing arrays with 40GB ports, they will also come with dials that go to 11.

The reality is, for any average net new install, that none of this matters. Media is irrelevant (Ethernet vs FC). Protocol is irrelevant (iSCSI vn CFIS/NFS). No host is going to overrun an 8GB port (or even 4 in most instances).

However, just like there are legions of CCIEs who have built their career on allowing "nothing but Cisco" into the DC, there are legions of SAN Admins who have done the same with FC. There are a significant number of potential customers in the enterprise space who won't take you seriously unless you support FC. From that perspective, adding FC support seems like a smart move, regardless of the state of the overall industry.

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FAIL

Re: AC Re: Dmitriy Release of our Fibre Channel capability by the end of FY15....

".....Media is irrelevant (Ethernet vs FC). Protocol is irrelevant (iSCSI vn CFIS/NFS)....." You have immediately disqualified yourself from serious technical consideration.

".....No host is going to overrun an 8GB port (or even 4 in most instances)....." I've seen UNIX clusters do that quite easily for years. More to the point, putting massive amounts of SSDs in an array behind 10GbE or 8Gb FC ports WILL swamp the ports quite quickly. About twenty SSDs and you stop improving performance and just add capacity, which you might as well do with cheaper SAS drives.

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And only 40 calories per slice.

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Anonymous Coward

Mixed Bag

Q4FY2014 = 41.6 mil

Q1FY2015 = 46.5mil

Loss = (0.14c) per share

QoQ Rev growth = +11%

Operating Loss = (10.1mil)

Q2FY2015 = Projected rev 49-51. Midpoint= 50

Projected Loss = (0.16) - (0.17) = Call it (0.16)

QoQ Rev growth = +7.5%

QoQ Projected Loss = (14%)

Projected Operating Loss = (11-12mil)

While YoY things look great, QoQ looks average. The SME market is a battleground dominated primarily by price sensitivity with too many young companies competing against each other. It's very difficult to run a profitable storage business in that space, particularly when selling at a loss and almost all of them do just that. Nimble will need to move up the totem pole quickly or the headwinds will become stronger the longer it stays there. However, as they move higher, the requirements will change significantly. Price becomes less of a factor, risk becomes a greater factor, functionality demands increase, integration demands increase, partner ecosystem demands increase, and naturally system complexity increases as a result of all these. Every system becomes as simple or as complex as the environment it lives in. It's not enough, imo, to have 2 patents in your name and have aspirations to become the next great systems company.

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Aggressive pricing reflects in Nimble's revenue

IMO Nimble is simply making roads by means of price (lower margins). They do not have anything significant new which EMC, NetApp and others have. Nimble just have same old product with only iscsi protocol. And yes their product which is hybrid array (HDD + SSD) is now old story and nothing different than EMC/NetApp. Full flash array is the new thing and they are lagging behind

They are definitely hurting NetApp more than EMC due pricing. I wonder why NetApp did not crush them but looks like they decided to maintain their margins than sales. Cloud is going to eat the low end/SMB market. What NetApp is facing on low end, same thing is going to be true for Nimble and any other hybrid array startups. For now it looks like Nimble is done after IPO.

Also it is just ridiculous see that uneducated analyst comparing Nimble with Pure storage and other all flash companies. Full flash is different territory. Pure has distinct advantage and head start in full flash array compared to EMC/NetApp. Nimble never had such advantage with their hybrid arrays.

In short, low price and superb marketing with Suresh V. they were able to pull it through IPO. And whatever it may be, they have done good job so far. But do not know where they will be after year or so.

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