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HP Muddies Water Around Violin IPO

HP let slip that it’s going to end its deal to resell Violin arrays with its servers

HP may have thrown what the English call a spanner and the Americans call a money wrench into Violin Memory's anticipated IPO. Whatever you call it, it can be bruising.

See, as soon as Bloomberg reported that the SSD array start-up had quietly filed to go public under the newfangled JOBS Act - which lets companies with less than a billion dollars in revenues put in their IPO papers without disclosing their plans or financials - HP let slip - also to Bloomberg - that it's going to end its deal to resell Violin arrays with its servers.

An HP flak told Bloomberg that "HP 3PAR is our strategic platform for solid-state storage."

This may have come as news to Violin, which told the news service that nothing had changed in its 15-month-old relationship with HP.

What it said exactly was:

"The current HP Violin relationship remains unchanged. The VMA product family (the Violin 3000 and vSHARE software) continue to be available to customers via HP as per the announced relationship (www.hp.com/go/vma). HP engineering continues to certify the VMA with additional servers, operating systems and joint selling and promotions. POC (proof of concepts) are currently active as are additional HP certifications.

"HP has stated 3PAR is the long-term strategic direction for their companies. Violin offers other products like the Violin 6000 through both our direct sales and our global reseller network as well as other software and system vendors which have been announced over the past 12 months."

Since Violin's S-1 was filed secretly there's no telling how important HP is to Violin and All Things Digital remarks that under normal circumstances an updated filing would have been in ordere. But it looks like HP will keep on selling the Violin products it took on board - at least for a little while - but not add any others and push 3PAR, which just went to an all-flash version of its P10000 array this summer, ahead of Violin where it can.

Whether losing a key account will damage Violin's revenues, reportedly worth $100 million last year, is unclear but it can't be good.

HP is in the middle of a massive five-year turnaround and needs to prove it didn't throw money away when it bought 3PAR out from under Dell at an inflated price of $2.4 billion in 2010.

Two billion is a recurring number in this case. The whole market for enterprise flash storage was worth just $2 billion last year. And Violin reportedly wants to be valued at $2 billion when it IPOs.

HP uses Violin's array with its high-end servers running Oracle's database to compete against Oracle's Exa machines. HP's own storage business is good for about $4 billion a year in sales.

According to what it told Bloomberg, HP estimates that corporate data is growing by at least 35% a year and storing data accounts for about 10%-15% of a business' IT spending.

More Stories By Maureen O'Gara

Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025. Twitter: @MaureenOGara

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