Storage IPO success is no longer as certain following Isilon's interrupted journey to storage stardom.
Blue Arc, 3PAR and EqualLogic are all being fingered as near-term IPO candidates. Investors had been salivating at the idea of easy share value gains following the huge early success of Isilon's IPO.
Such investors are not really welcome to a company because they are short-term, impatient and greedy rather than supportive and focusing on the long-term. They want one-night stands with a stock, not marriage.
Following Isilon's rip-roaring success of an IPO the company's momentum has slowed. Last quarter its CEO said the company's order pipeline was at an all-time high. This quarter slowing European sales and a slower-than anticipated take-off from a Koday reseller deal have caused the company to drop its earnings estimates.
The one night stand investors, looking for continued and fast share value growth, got impatient and bailed out causing the prices to fall. They suggest that Isilon's technology advantage has been over-blown (not least by the same now sorry investors) and, no doubt, soon they'll be pointing their fingers at Isilon's lame management.
But then they're lame investors.
Certainly Isilon faces growing competition but its technology fundamentals have not really changed and, no doubt, its product range will be enhanced. If the one-night stand investors get hacked off and sell-off their holdings then it could be a good thing. Let them blow off and alight on some other hot-tip and leave Isilon and its management alone so they can do their job.
They might fail; who knows? Certainly it might learn to be be more conservative in their earnings estimates in future. It looks a given too that it has to broaden its channel if it can, as well as maintain its technology superiority.
The people pushing Blue Arc and the others into IPOs also want returns on their seed money investment and they welcome the one night stand stock pickers, especially if the stock can be successfully hyped. Isilon's troubles could well cause a dose of welcome realism to be injected into the storage IPO market.