Posted on Monday, Mar 14th 2016
According to IDC, the worldwide converged systems market revenue increased 6.2% to $2.5 billion in 3Q 2015. Hyperconverged systems sales grew 155.3%, generating more than $278.8 million in sales or 10.9% of the converged systems market. Riding on this high growth, hyperconverged systems vendor SimpliVity has managed to make it to the Billion Dollar Unicorn Club within two years of its product launch.
Westborough, Massachusetts-based SimpliVity was founded in 2009 by Doron Kempel with a mission of simplifying IT, especially the modern data center. SimpliVity converges the traditional compute, storage, and network switching in an x86 server form factor to provide lots of functionality in a much smaller footprint. This simplifies device management and helps customers achieve economies and ease of scale.
Its flagship OmniCube platform was launched in April 2013. By mid-2015, deployments of SimpliVity’s hyperconverged infrastructure totalled more than 2000, with about 550 large and mid-sized enterprise customers, nearly 380% year over year growth.
Simplivity also offers OmniStack Integrated Solution with Cisco UCS and OmniStack Solution integrated with Lenovo x3650 M5 servers. Sales of its integrated solution with Cisco UCS recently crossed the 1,000 milestone.
SimpliVity’s customers include Dairy Farmers of America, MLB Network, Swisscom, T-Systems, Mandarin Oriental Hotel Group, Intersport Group in Germany, Monte Nissin in Singapore, the St Andrews Anglican College in Australia, Alten in France, PT Bukaka Teknik Utama Tbk in Indonesia, as well as five Fortune 100 companies, a top five oil and gas company, a top five global entertainment company and a top 10 global telecommunications company. More than 50% of its sales are from outside North America.
SimpliVity’s business model is 100% indirect, and its solutions and professional services are sold through its network of resellers and distributors. It has sales offices throughout the United States, Europe, the Middle East, Africa, and the Pacific Rim. SimpliVity has increased its global reseller footprint to more than 60 countries, expanded its employee base to 21 countries and grown its network to 700 partners globally.
SimpliVity is venture funded with investments of $276 million from Accel Partners, Charles River Ventures, DFJ Growth, Kleiner Perkins Caufield & Byers, Meritech Capital Partners, Meritech Capital Partners, Swisscom Ventures, and Waypoint Capital. Their last round of funding for $175 million was held in March 2015 that valued them at about $1 billion.
It does not disclose its financials but has disclosed that it has an annual revenue run rate of $100 million. It expects to go public at the right time. Meanwhile, rival Nutanix which in December 2015 had filed its IPO Prospectus has recently put off selling shares till market volatility subsides.
Apart from market volatility, SimpliVity and Nutanix also need to look out for increasing competition in the hyperconvergence space from tech giants like Cisco, Dell, and HP. HPE recently announced its plans to launch a ProLiant-based virtualization server targeting Nutanix. Early this month, Cisco announced its HyperFlex system, after EMC announced the VxRail server-based storage cluster in six models based on Dell’s PowerEdge servers.
Against the backdrop of the recent Dell-EMC merger, the increasing competition and consolidation in the server and storage business could also mean that SimpliVity could be an attractive acquisition prospect.
More investigation and analysis of Unicorn companies can be found in my latest Entrepreneur Journeys book, Billion Dollar Unicorns. Unicorns will also be discussed with some special guests during our 1M/1M Roundtable programs over the next few weeks. To be a part of the conversation, please register here. The term Unicorn was coined in a TechCrunch article by Aileen Lee of Cowboy Ventures.
This segment is a part in the series : Billion Dollar Unicorns
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