Markets Brace for Fusion-io IPO, Steve Wozniak Rules (FIO, AAPL)

Fusion-io, Inc. is set to price its initial public offering this week.  We currently have an expected pricing on or around Wednesday.  The company’s latest amended filing shows that it will sell 12.3 million shares of common stock at $13 to $15 per share and that of the offering the company is selling 10,755,607 shares and the balance is from existing holders.  Underwriters in the filing include Goldman Sachs, Morgan Stanley, JPMorgan, and Credit Suisse.   Fusion-io plans to list on the New York Stock Exchange under the ticker “FIO.”

The company calls itself “a leading provider of data-centric computing solutions – a combination of hardware and software that places data closer to processing, resulting in dramatic improvements in both performance and efficiency.”  The way we think of this company is a business which brings the cloud much closer.  We would also note that the company has tried to avoid the term “cloud” in its business as the real aim looks to be consolidated systems within data centers.

Fusion-io has ties back to Apple Inc. (NASDAQ: AAPL) as Apple’s co-founder Steve Wozniak is the company’s chief scientist.  The company claims to have pioneered a next generation storage memory platform for data decentralization. It noted, “Our platform significantly improves the processing capabilities within a data center by relocating process-critical data from centralized storage to the server where it is being processed, a methodology we refer to as data decentralization.”  Its integrated hardware and software solutions use non-volatile memory to boost data center efficiency for enterprise grade performance, reliability, availability and manageability.

The company sells its solution through a direct sales force and original equipment manufacturers (Dell, HP and IBM, and others). It also claims to have shipped solutions aggregating over 22 petabytes of enterprise class storage memory capacity to more than 1,000 end-users.

The company noted that it will have some 77,809,084 shares outstanding after this offering, so it will have a market capitalization of about $1.09 billion based upon the middle of its IPO price range at $14.00 per share.

Revenues are growing: $648,000 in 2008; $10.15 million in 2009; and $36.216 million in 2010 (june Year-end).  Net losses were rising but the company appears near that critical mass level now.  Income was -$9.975 million in 2008; -$25.573 million in 2009; and -$31.716 million in 2010.  Its fiscal year ends in June, so the numbers are still showing growth: the first nine-months during the fiscal 2010 were $25.29 million with a loss at -$19.8 million versus 2011’s first nine-month reading of $125.51 million in sales and -$1.209 million as a loss.

New Enterprise Associates 12, owns about 38.8% of Fusion-io and Lightspeed Venture Partners VIII owns about 13.2% of the company.  We’d be inclined to call this just a cloud storage player, but it is both hardware and external.

Fusion-io’s ioDrive is a new solid state technology that increases bandwidth and application performance; its ioDrive Duo doubles the performance and capacity available on a single device; and its ioDrive Octal packs 6 GB/s of bandwidth and 5.12TB of capacity into a single PCI Express device.  Its ioSphere Platform of software solutions enables data center architects to manage Fusion’s distributed flash memory more effectively and efficiently than ever before.

JON C. OGG