Pivot3 Financials and Market Fit Examined

Last year, Pivot3 raised an additional $23 million to fund expansion. Now, the company is confirming doubling of revenue year over year and total 2012 revenue of $31 million. Inside this note, we break down the numbers, looking at their market fit and competitive positioning.

Details

Pivot3 confirmed that while they are expanding into non surveillance opportunities, like their VDI offering, virtually all 2012 revenues were in surveillance with ~2500 appliances shipped last year, totaling over 50 Petabytes (PB) of storage (1024 TBs in a PB).

The average Pivot3 surveillance user deploys numerous appliances and 100+TB of storage. See this IPVM member's experience / use of Pivot3 as an example.

While Pivot3 over the years has offered mini solutions and promoted scale out offerings, these results show that Pivot3 is gaining the greatest acceptance in classic, larger scale surveillance systems. This is certainly an area where there is far less competition and far more differentiation for their offering.

The most obvious standout Pivot3 feature is eliminating physical VMS servers as Pivot3 runs VMS software inside their storage appliances as well as enabling failover of VMS software when using multiple Pivot3 units. Additionally, Pivot3 cites fast ingest capability (via their parallel ISCI network to each box) and flash caching (50GB SSD in each appliance) allowing them to scale well and handle bandwidth spikes.

All of these features clearly provide more valuable in larger scale systems and would not be that useful for a sites with only a single or very few VMS servers.

Competitive Positioning

Pivot3's major cash infusion plus the collapse of their most well known competitor (Intransa) puts them in a fairly good position. However, they do need to continue to grow robustly as their $31 million in revenue pales in comparison to their $100+ million VC funding.