July 12, 2018

Tintri, close to the cliff

Anticipating an out of cash period following a high rate cash burn, Tintri voluntary filled July 10th a petition for bankruptcy aka chapter 11.

A few hours later, DDN declared its intent to acquire all of the assets of Tintri. This transaction is not guaranteed to be successful and seems to be the only solution for employees and customers.

Tintri was founded in 2008 and raised a total of $262.2M with 8 rounds. The 1st product release came in March 2011. Annual figures show that the company did $49.8M in 2015, $86M in 2016, $125.1M in 2017 and $125.9M in 2018 illustrating a rapid growth for 3 years except last year which is really flat.

Having difficulties to raise a new round from VCs, Ken Klein, CEO, and his team have decided to make the company public and it was an error but did they have really an other alternative? Not sure. The IPO took place June 30th 2017 at $7 per share from a previous plan in the range $10.5-12.5 and gave a valuation of $216.4M, really a drop from $785M in 2015.

More recently as the IPO has crystalized a new financial difficulty, Tintri has recruited Tom Barton as CEO but he stayed less than a quarter having faced the huge challenge and difficulty.

Following Intel Lustre entity acquisition, DDN confirms if needed to be the #1 private storage company with a revenue of $300M in 2016. It is also confirmed with its presence in the bi-annual storage unicorn report published recently. It’s a new market segment for DDN who understood the business opportunity Tintri and the installed base represent claiming more than 1,000 enterprise customers. It also brings to DDN analytics and VM automation capabilities that can be potentially leveraged by other DDN products like HPE did with InfoSight following Nimble Storage acquisition. We’ll learn more about that move for DDN as the company participates to the December IT Press Tour.

But it invites us to ask a question: even if Tintri has developed a real IP, does the market really need a dedicated VM-aware storage? Facts show negative answers illustrated by Atlantis Computing, Evostor, NexGen and Virsto or CloudByte, Maxta, StorMagic, Tegile, and Gridstore now HyperGrid.

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