Arik Hesseldahl

Recent Posts by Arik Hesseldahl

Fusion-io Looks Ahead, Sees Streets Paved With Golden Flash Chips

Shares of Fusion-io, the company that uses flash memory to speed up servers in data centers and also a founding member of the year-old Flash Madness Club, just reported its quarterly earnings, and, well, they’re flashy.

Sales were $106.6 million, and per-share earnings were 9 cents, easily besting the consensus of $96 million and 3 cents. Great, but that’s not what got investors so excited that they kicked Fusion shares up by 26 percent in the after-hours session. The company said it expects sales in its fiscal year 2013 to grow 45 percent to 50 percent, well ahead of the 37 percent analysts had been expecting.

At least part of that outlook stems from things like the super-secret deal Fusion did with enterprise storage concern NetApp last week, and also the trend of servers going all flash, thanks in part to Fusion’s software.

“We got new products and new opportunities within existing markets, so we feel pretty good,” CEO David Flynn told me in a brief conference call after Fusion reported earnings today. All the new stuff going on is offsetting what has been the traditional criticism against Fusion since its IPO last summer: That it relies too heavily on large purchase orders from a small number of customers, specifically Apple and Facebook, who buy a lot of Fusion’s technology for use in their data centers.

“They’re representing a smaller overall portion of our business as these new opportunities develop,” Flynn told me.

One other thing he said: Some of those big customers have some pretty aggressive plans to scale out their data centers. “These relationships have afforded us some visibility on their plans, and we’ve factored that into our guidance with high confidence.” It looks to me like Fusion-io’s guidance is quickly becoming a pretty good barometer for the overall state of the data center business.

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I think the NSA has a job to do and we need the NSA. But as (physicist) Robert Oppenheimer said, “When you see something that is technically sweet, you go ahead and do it and argue about what to do about it only after you’ve had your technical success. That is the way it was with the atomic bomb.”

— Phil Zimmerman, PGP inventor and Silent Circle co-founder, in an interview with Om Malik