February 8, 2005 — (WEB HOST INDUSTRY REVIEW) — Server and storage system provider Rackable Systems (rackable.com) is planning to raise $85 million through an initial public offering on the Nasdaq, reports say.
Rackable Systems develops low-costservers that it says offer nearly twice the server or processor densityof traditional rack-mount systems. The servers also come with a rangeof power and heat management techniques that enable them to operateeffectively at high-density levels. Rackable’s storage systemsincorporate many of its core server technologies.
The company competes against most of theindustry’s top players, including Dell, HP, IBM and Sun Microsystems inservers, and EMC, HP, Hitachi and Network Appliance in storage systems.
According to reports, revenue at Rackablehas improved significantly in the last year, but it has had littleeffect on the company’s bottom line. In the nine months up to September2004, Rackable generated $86.8 million in revenue, well up from $25.3million the previous year, but still posted a $41.1 million loss,representing a small improvement from the $42.4 million loss of a yearago.
The company is dependent on a few largecustomers. For the period January to September 2004, Microsoftreportedly accounted for 42 percent of its total sales, with Yahoo!comprising 18 percent.
According to analysts, Rackable Systemsis looking to target the continued growth of the server and low-costdata storage system markets.
