Businessmodel of Violin Memory

Customer Segments

Violin Memory provides a broad range of digital storage products and solutions to commercial enterprises across multiple business sectors. The Company’s customers can be organise broadly into the following categories:

• Financial Services, including retail and commercial banking institutions, asset and investment management firms, insurance companies, capital markets operators, and other financial services providers;
• Healthcare, including healthcare providers, medical service companies, and healthcare payer organisations;
• Communications, including telecommunications service providers, cloud and internet service providers, and other communications enterprises; and
• Other Commercial Enterprises, including various commercial entities across multiple sectors, such as the retail, energy, and corporate sectors. Violin Memory has served a number of well-known clients. This includes organisations such as KIND Hearing, Ferrellgas, the San Francisco 49ers, Bank of America, Toshiba, Verizon Wireless, Equinix, and Valley Health Care.

Violin Memory is based in the US, which is the Company’s principal market. The Company, however, also serves an international client base across the Americas, Asia Pacific, and Europe.

Value Propositions

Violin Memory provides value to its clients in the following ways:

• Its reputation and industry standing, with the Company established as reliable and popular provider of flash storage products and solutions, as evidenced by its ability to secure business from high-profile companies across multiple sectors;
• Its broad portfolio of service offerings, with the Company offering a varied range of products and services, including industry-specific solutions for the financial services, healthcare and communications industries;
• Its international sales reach, with the Company serving an extensive domestic client base in the US, as well as numerous clients in international markets across the Americas, Asia Pacific, and Europe;
• Its proprietary technologies, with the Company developing and utilising a range of proprietary technologies in the delivery of its products and solutions, making its service offerings unique within the industry; and
• Its industry expertise and experience, with the Company employing specialist personnel across its operating units, as well as a team of experienced industry executives. ### Channels

Violin Memory operates a website at www.violin-memory.com, through which it provides information on its products and services, target industries, and operating regions. The Company does not operate an online sales channel, nor does it provide an online customer portal.

Violin Memory primarily makes sales to customers through its in-house direct sales force, which is organised by geographic region. The Company’s sales personnel deal directly with clients and operate out of the Company’s network of sales and administrative offices, including locations in New York, North Carolina, China, Japan, Singapore, South Korea and the UK.

Violin Memory additionally makes sales through a network of channel and distribution partners, including distributors and resellers. The Company also works with technology partners and systems integrators to integrate and market its products with third party solutions.

The Company then works with technology and systems integrator partners to co-market solutions and offer joint services and support to customers.

Customer Relationships

Violin Memory does not make sales to its customers on a self-service basis. Instead, the Company makes sales through its in-house direct sales force, with its individual sales representatives consulting closely with clients to understand the individual requirements and assist customers in determining which of its products best satisfies those requirements. For its large customers, the Company establishes dedicated account management teams that manage the relationship with the customer.

Violin Memory offers ongoing support to its customers, who are able to contact dedicated support personnel over the phone or via email in order to access personalised technical assistance. The Company also provides a range of online support resources – including FAQs, white papers, case studies, datasheets, analyst reports, and videos – that clients can access independently through the Company’s website.

Additionally, Violin Memory operates social media accounts with YouTube, Twitter, Facebook, and LinkedIn, through which the Company interacts directly with its customers and publishes company updates.

Key Activities

Violin Memory offers a range of flash-based storage products and solutions, aiming to bring storage performance in line with high-speed applications, servers and networks.

The Company’s offers a range of cloud-based solutions, including its Flash Storage Platform, which is designed to bring efficiency to the storage systems of commercial entities across multiple industries, including the healthcare, financial services, and communications industries. The Company is based in the US, but also serves an extensive international client base across the Americas, Europe, and Asia Pacific, maintaining offices in the UK, China, Singapore, and South Korea.

Key Partners

Violin Memory works in close collaboration with a network of partners spanning multiple industries. These partners can be organised broadly into the following categories:

• Supplier and Vendor Partners, comprising suppliers of products, services, and equipment that are utilised across the Company’s operating units in support of its core development and implementation operations;
• Channel and Distribution Partners, comprising the Company’s network of value added resellers, systems integrators, and distributors that assist in extending the reach of the Company’s own in-house sales force, particularly in certain international markets;
• Technology Partners, comprising various specialist technology and software companies that assist in the development, maintenance and delivery of effective, high-quality storage solutions; and
• Strategic and Alliance Partners, including a number of market leading companies across multiple sectors, with which the Company collaborates on joint projects, including in marketing, branding, and development. Violin Memory has a number of key partnerships in place. This includes tie-ups with a number of high-profile technology companies, including Dell, Toshiba, Microsoft, Intel, Cisco, Lenovo, IBM, SAP, Citrix, Oracle, and VMWare.

Key Resources

Violin Memory’s key resources are its proprietary technologies and intellectual properties, its cloud storage platform and storage solutions, its IT and communications infrastructure, its sales and distribution channels, its partnerships, and its personnel.

Violin Memory utilises a range of proprietary technologies relating to solid-state storage, solid-state memory, software acceleration, and related technologies. According to its annual report, the Company has 45 issued patents and 50 provisional and non-provisional patent applications in the US and 65 issued or allowed patents and 38 corresponding patent applications in foreign jurisdictions, including Patent Cooperation Treaty applications, as of 31st January 2016.

Violin Memory also owns and or leases a number physical properties around the world that comprise its sales and administrative office network, including locations across the US, Singapore, the UK, China, and South Korea.

Cost Structure

Violin Memory incurs costs in relation to the development of its proprietary technologies and storage solutions, the maintenance of its IT and communications infrastructure, the procurement of services and equipment, the operation of its sales and distribution channels, the implementation of marketing and advertising campaigns, and the retention of its personnel.

In 2016 Violin Memory recorded total operating expenses in the amount of $114.48 million. This included sales and marketing expenses in the amount of $55.62 million, research and development expenses in the amount of $41.70 million, and general and administrative expenses in the amount of 17.17 million.

Revenue Streams

Violin Memory generates revenue through the development and sale of various flash storage products and solutions to commercial entities across multiple business sectors. The Company derives revenue in the form of products sales and under service contracts that are agreed on case-by-case basis.

In 2016 Violin Memory generated revenue for the year in the amount of $50.87 million, down considerably on the $78.98 million recorded by the Company in 2015. The Company’s revenue was attributed relatively evenly to products sales, which amounted to $27.34 million, and the provision of services, which amounted to $23.53 million.