Pivot3 Q1 2013 UpdateBy Carlton Purvis, Published Mar 27, 2013, 12:00am EDT
Intransa's troubles have raised concerns about the viability of specialized surveillance storage appliances. However, Pivot3, another well known provider in this space, says its 2013 outlook is strong and that restructuring rumors about the company are misleading. For this note, we interviewed Pivot3 CEO Richard Bravman, examining the latest numbers and "software only" product plans.
[UPDATE: The CEO is gone one month after this initial post.]
Pivot3 projects 2013 growth of nearly 50 percent over 2012 to around $45 million. They cite nearly 600 customers served to date, with 390 customer orders in 2012. The company previously nearly doubled its revenue in 2012 to $31 million after raising $23 million for expansion. The company projects to be profitable with cash on hand and is expected to break even this year.
We noted last month that Pivot3 is gaining acceptance among large-scale surveillance projects, an area where there is less competition. Intransa, its biggest brand competitor, has laid off all its staff, eliminating a rival.
Pivot3 says it has seen growth in interest in both its surveillance and non-surveillance offerings and says it sees opportunities in security for its VDI offerings [link no longer available] to provide a way for users to watch video from iPads or other devices from VMS platforms that don’t have mobile apps. However, most VMS platforms already have their own mobile apps.
We were given a preview of forward product plans into 2014, when Pivot3 will extend its offerings to include 'software only' products to add capabilites to vSTAC appliances. Pivot3's "vSTAC OS" will be sold separately from its hardware appliances. Pivot3 has traditionally bundled the two together, but in the future it wants to allow users to choose their storage device and load vSTAC OS later.
From the Pivot3 website:
Pivot3 says vSTAC OS will provide users a way to migrate data intelligently from one array to another. The software will be compatible with both Pivot3 and third party hardware, offering the future potential of mix and match storage solutions. The company did not say how much it will sell the software for.
As it adds products and services, Pivot3 plans to expand to additional markets worldwide. To facilitate its growth, the company has expanded some departments and contracted others.
The company had 90 full-time employees last year, and now has 82. They say the change is due to employees leaving for other opportunities, one person being asked to leave, and contractors whose projects ended. The company has added three new positions in the last three weeks. At least two more job openings are posted on SimplyHired.com [link no longer available].
The move to sell Pivot3's software 'only' has potential. Selling commodity hardware is tough. The margins are low. Users often have their own preferred providers and choosing one from a smaller provider brings risk of lock in or support problems (e.g., if an Intransa situation occurs). By offering its software independently, this enables new features end users to pick preferred hardware providers and minimize risk on that side. However, this will simultaneously increase pressure for Pivot3 to justify the value of its software and offering independently. How successful this will be is impossible to tell this far out from launch. However, it is an interesting development to watch.
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