Violin vows to play on as it files for bankruptcy

Downtrodden flash storage vendor says move to reorganise business under chapter 11 will bolster its ability to serve customers

Flash storage vendor Violin Memory has filed for bankruptcy and is looking for a buyer, in a bid to "streamline its operations and balance sheet".

The flash vendor filed a voluntary petition for reorganisation under chapter 11 of the US Bankruptcy Code in the Bankruptcy Court of the District of Delaware, and will hold an auction for the sale of the company in early January.

Violin Memory's CEO Kevin DeNuccio said: "We are taking this action, which should conclude by the end of January 2017, to bolster Violin's ability to serve the needs of its customers. Violin intends to continue to sell solutions to customers and prospects as well as service and support customers during this restructuring."

The company claims that it will still be able to play to its core strengths after restructuring and serve its customer base, maintain its recurring service revenue, and continue to offer integrated hardware and software solutions.

Founded in 2005, Violin Memory was among the first vendors to offer flash storage technology to the market. But a series of dreadful financial quarters this year has put the firm in dire straits. For the three months until 31 July 2016, revenues fell by 51 per cent year over year, with product sales falling by $7.7m (€7.35m) to $2.1m.

On a conference call following the firm's second-quarter results, DeNuccio revealed that Violin had cut another 15 per cent of its workforce. The vendor culled 86 employees - more than a quarter of its headcount - "to bring expenses more in line with revenue" after a similarly awful quarter for the three months ending 31 January.

DeNuccio had remained confident that there was still an opportunity for Violin Memory to turn its "frustrating" and "disappointing" negative revenue trend around.

Industry onlookers were less optimistic, predicting that the firm would go bankrupt or look for a buyer within its next few financial quarters.