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3PAR Pockets $32 Million: Page 2 of 3

Of course, it gets tougher to keep doubling sales after an initial rollout. But don’t count out 3PAR, which has outlasted a raft of SAN startups and gotten the jump on some big players such as IBM Corp. (NYSE: IBM), EMC Corp. (NYSE: EMC), Hewlett-Packard Co. (NYSE: HPQ), and Hitachi Data Systems (HDS) by offering a viable product focused on a key aspect of utility computing.

“We’ve seen a significant uptick in the last six months because of thin provisioning,” Kurtz says.

Thin provisioning is a twist on the capacity-on-demand or pay-per-use concept that requires customers to house more capacity than they need and pay for what they use. 3PAR lets users create virtual volumes on one of its systems without actually purchasing or installing the entire amount of disk storage.

For example, a database may be assigned a volume sized at 4 TBytes, but the 3PAR system could have just 1 TB of disk capacity in place if the application uses less than that (see 3PAR Spins Disk Trick). That actually encourages customers to buy less disk space -- something the SAN giants would never consider, but that allows a startup to get a lower-cost foot in the door.

Like any SAN startup, 3PAR has had plenty of those doors slammed on its feet along the way. After raising $121 million through July 2001, the company pushed out its first product in June 2002 (see 3PAR Tees Off) but was down to $50 million when it axed 42 people (20 percent of its workforce) in November 2002 (see 3PAR Swings Club). Headcount has since come down another 20 or so to approximately 150. Still, along with XIOtech Corp., 3PAR is still standing in a tough market.