"We need to grow pretty fast," said Frank Slootman, the CEO of Data Domain (NASDAQ: DDUP), in an interview with me. "In the storage industry, you can only be a small company for a short period of time."
If history is any indication, he's spot-on. That is, the storage industry tends to be a winners'-take-all proposition.
The good news for Data Domain is that the company is getting bigger. In fiscal Q4, revenues spiked 151% to $44.9 million over the past year. In fact, there was a 40% increase from the prior quarter. In all, the company posted revenues of $123.6 million last year, which was a hefty 166% increase.
Basically, Data Domain is capitalizing on a megatrend; that is, the transition from tape storage to digital storage. The company calls its technology "deduplication," which is quite efficient and cost-effective.
After just a few years, the customer count now stands at 1,537 (there were 341 new customers in the past quarter). What's more, Data Domain is aggressively expanding into foreign markets, with offices in 22 countries.
And, while there's lots of talk of a slowdown in IT (information technology), Slootman isn't seeing it. "Storage is not a category you can get rid of," he said. "It's something you need.
Tom Taulli is the author of various books, including The Complete M&A Handbook
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Reader Comments (Page 1 of 1)
2-04-2008 @ 6:51PM
Dieter Rothmeier said...
Good article, but there's a rather significant typo: In the last paragraph, it says:
Storage is not a category you can't get rid of
It should be
Storage is not a category you can get rid of
2-04-2008 @ 9:29PM
TX CHL Instructor said...
You might want to look up the term "gorilla", or the phrase "800-lb gorilla". "Guerrilla" means a member of an irregular, usually indigenous military or paramilitary unit operating in small bands in occupied territory to harass and undermine the enemy, as by surprise raids.