Arik Hesseldahl

Recent Posts by Arik Hesseldahl

Shane Robison Is Working on an Extreme Makeover at Fusion-io

robison-2-72It has been a rough year at Fusion-io, the Utah-based flash memory technology company. Its shares have fallen by more than 54 percent this year — a year marked by turmoil in the corner office — and missed earnings expectations. Not to mention the recurring chatter that it’s a takeover target.

But that’s about to change, argues analyst Brent Bracelin of Pacific Crest Securities in a note to clients today. Since former HP CTO Shane Robison took over as CEO in May, he has been carrying out what Bracelin calls an “extreme makeover” of the company, rebuilding the executive team, streamlining research and development efforts and revamping its approach to sales. He sees 2014 as having the potential for a strong turnaround.

Fusion-io sells flash-based inserts that are sold inside servers and other hardware that are intended to speed up their computing performance. IBM, Dell, Hewlett-Packard, Cisco Systems and Fujitsu are among the companies that resell Fusion’s ioDrive devices in what are known as OEM (original equipment manufacturer) deals. A newer product, the ioScale, is designed for distributed computing environments sometimes described as “hyperscale” and is as yet only qualified by IBM, but more are expected to follow, Bracelin said.

The bigger opportunity, though, is in the enterprise, he said. Four out of nine of Fusion’s customers who’ve bought $1 million or more worth of its gear in the last quarter were enterprise-focused and not hyperscale-focused customers, Bracelin said. “Hyperscale was and will be an important upside driver, but the growth sustainability will be increasingly tied to the enterprise,” he writes.

On top of that, products from competitors “hitting technical walls,” Bracelin argues. Meanwhile Fusion is nearing the release of a bunch of third-generation products that should start hitting the marketplace before the summer. Assuming revenue stabilizes, Fusion could see itself transforming from zero to hero by the middle of 2014.

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Just as the atom bomb was the weapon that was supposed to render war obsolete, the Internet seems like capitalism’s ultimate feat of self-destructive genius, an economic doomsday device rendering it impossible for anyone to ever make a profit off anything again. It’s especially hopeless for those whose work is easily digitized and accessed free of charge.

— Author Tim Kreider on not getting paid for one’s work