Aliso Viejo-based Datallegro Inc., a reseller of servers loaded with its database software, has wrangled partnerships with some of the biggest names in data storage, including EMC Corp., Dell Inc. and French technology goods distributor Bull.
“We are starting to get some really marquee accounts under our belts,” said Chief Executive and founder Stuart Frost. “It’s pretty much a dream come true for a 4-year-old company to have partners like that, getting access to customers and adding credibility to new accounts.”
The company doesn’t disclose sales, which likely still are small. The partnerships have spurred revenue growth of more than 300% this year, Frost said.
Datallegro sells data storage racks loaded with computers that have its software on them. The racks, computers and software are designed to be installed in companies’ server rooms.
Its software is geared toward Fortune 100 companies that need to store, organize and retrieve huge volumes of historical data, such as banks, retailers and telecommunication companies.
“It’s for companies that deal with a lot of consumer data and transactions,” Frost said.
One of its biggest retail customers is Sears Holdings Corp., the Hoffman Estates, Ill.-based parent of the nationwide Sears chain of department stores.
The company is focused on growing sales fast enough to take on its nearest competitor, Framingham, Mass.-based Natezza Corp., which went public this year on the New York Stock Exchange’s Archipelago Exchange, an electronic trading system.
The giant in the market is Teradata Corp., a Dayton, Ohio-based public company with nearly $2 billion in sales and a recent market value of about $5 billion.
“We are off to a great start and getting to a reasonable size in terms of revenue,” Frost said. “We are a much faster growing company than the No. 2 in the market, and we’ll be able to take them within a year or two.”
Market Expanding
The data storage market is expanding as more companies look to “go paperless” and mine their data to learn more about their customers.
“Companies spend a lot of money on data warehousing,” Frost said. “It’s a huge cost item and it’s pretty strategic to them.”
Datallegro, which has about 80 workers in Aliso Viejo, struck some big deals with consultant Teoco Corp. and market researcher NPD Group Inc. last year.
“The average deal size is $1 million to $3 million,” Frost said.
The largest was more than $11 million, he said.
“The focus has been on doing very large, high-end deals,” he said.
The privately held company isn’t profitable but expects to be within nine months to a year, Frost said.
“The biggest issue for us is that our revenue isn’t all that predictable right now,” he said. “It will be in about 15 months or so.”
The venture-backed startup is in negotiations to raise another round of funding. The company declined to say how much it’s looking for.
Since its start in 2004, Datallegro has raised a total of $45 million. It’s most recent round of more than $22 million closed at the end of last year.
Given the cozy relationship, industry watchers say EMC could look to buy Datallegro.
“You never know,” Frost said.
He declined to say whether Datallegro has fielded any buyout offers.
Right now Frost said he is focused on managing the key partnerships.
“What’s going to happen is a transition from being fairly quiet about customers to putting a lot of noise out there,” he said. “The real thing for us is exploiting those relationships and getting what we can out of them.”
