Storage Seller Tegile Hires New CFO With View to IPO in 2 Yearsby
Mike Morgan has shepherded 2 companies through the IPO process
Company is benefiting from growth in flash storage sales
Tegile Systems Inc., a seller of flash-based data storage products, hired Mike Morgan as chief financial officer, bringing in an executive with experience leading startups through initial public offerings as it plans its own share sale in 18 to 24 months.
The company, which is backed by Sandisk Corp. and Western Digital Corp., has 1,250 customers including the MLB Network and Aer Lingus, and won’t disclose its revenue, said Chief Executive Officer Rohit Kshetrapal. Tegile has seen storage system shipments grow 350 percent in the fiscal year that ends Jan. 31, he said. Morgan, most recently CFO at cloud storage software company Panzura, has previously shepherded two companies through the IPO process. He replaces Ian Edmundson in the CFO role.
Newark, California-based Tegile is trying to take advantage of growing demand for storage systems that rely partly or entirely on flash, the same fast computer memory that’s found in smartphones and tablets. Spending on all-flash systems, which accounts for 35 percent of Tegile’s business, has risen faster than some analysts expected, bolstering similar startups in the industry. Pure Storage Inc. sold shares to the public in October and NetApp Inc. agreed to buy SolidFire Inc. for $870 million in December.
Tegile debuted a new all-flash product this summer, built on top of Sandisk technology, and is one of the vendors with the lowest cost options, according to Eric Burgener, an analyst at IDC. The company’s new all-flash system is also noteworthy for its ability to take up less space and use less electricity. The market for such products was predicted to top $2.5 billion last year and will grow more than 20 percent a year through 2019, Burgener said.
While storage market leader and No. 1 flash seller EMC Corp. battles Pure for larger businesses, Tegile is targeting more of the mid-size enterprises that are often customers of NetApp, said Kshetrapal. He cited a Piper Jaffray report from this month that found 46 percent of 50 chief information officers surveyed plan to invest in all-flash systems this year with Tegile among the top choices for spending, below EMC, Pure and International Business Machines Corp.
Tegile, founded in 2010, has raised $117 million with backers including August Capital and Meritech Capital Partners. Still, Kshetrapal says venture money will be harder to come by this year and storage companies will have to watch spending.
"This is a year of hunkering down and getting through for most storage companies," he said. "It is absolutely going to be a tough year -- we are all going to have to tighten our belts. It’s still a very large growing market and the ones that get to the other side will have a large business."