Violin Memory, a pioneer in the flash storage industry which was never able to capitalize on its early market lead, has filed for Chapter 11 bankruptcy and unveiled plans to hold an auction for its assets.
The move to file for Chapter 11 comes a year after Santa Clara, Calif.-based Violin Memory first said it is exploring strategic alternatives.
Violin Memory on Wednesday said that, in additional to the Chapter 11 filing, the company plans to hold an auction early next month to sell its assets, which include 58 U.S. and 64 foreign patents and multiple pending patents. It also has a recurring revenue business at $20 million per year.
Violin Memory was founded in 2005, and developed its own flash storage modules instead of using standard SSDs to coax better performance from its solutions. For a time, the company was known for the performance of its all-flash storage solutions. By 2011, it had already introduced all-flash arrays targeted at tier-one, mission-critical applications.
However, over the years, intensifying competition, at first from a large number of startups using standard SSDs to develop high-performance all-flash storage arrays at a lower cost, and later from established storage vendors who were able to easily slot all-flash storage into their existing storage ecosystems, took its toll on the company.
The company in early 2014 made the decision to exit the PCIe flash memory card business and focus on the arrays. It sold that business in June of 2014 to South Korea-based semiconductor company SK Hynix.
Violin Memory in December unveiled a new entry-level all-flash array and a new high-density flash storage array into its Flash Storage Platform (FSP) family, in effect transforming from its focus on high-end, Tier 0 flash storage solutions to more of a primary storage play.
Jeff Nollete, vice president of channel sales at Violin Memory, told CRN at the time that the company had cornered itself in regarding its total addressable market. "It was a one-trick pony in focusing on the high end of the market. So now we've expanded to primary storage. We are a high-end data storage solution provider rather than a provider of database acceleration solutions," Nollete told CRN then.
Violin Memory in September of 2013 held its IPO, selling about 18 million shares at $9 each, giving it a total IPO of $162 million. However, share prices closed that day at $7.02, and have continued to fall since. Shares on Thursday for the company, which are available via over-the-counter markets, fell 68 percent to just over 5 cents per share.
One never likes to see a company like Violin Memory, with good technology and people, fail, said John Woodall, vice president of engineering at Integrated Archive Systems, a Palo Alto, Calif.-based solution provider and Violin channel partner.