We estimate that our net proceeds from the sale of the common stock that we are
offering will be approximately $ million, assuming an initial
public offering price of $ per share, which is the midpoint of
the range of the initial public offering price listed on the cover page of this
prospectus and after deducting an assumed underwriting discount and estimated
offering expenses that we must pay. If the underwriters’ option to purchase
additional shares in this offering is exercised in full, we estimate that our
net proceeds will be approximately $ . A $1.00 increase (decrease)
in the assumed initial public offering price of $ per share would
increase (decrease) our expected net proceeds by approximately $
million, assuming the number of shares offered by us, as set forth on the
cover page of this prospectus, remains the same and after deducting an
assumed underwriting discount and estimated offering expenses that we must
pay.
We intend to use the net proceeds from this offering for working capital and
other general corporate purposes including research and development efforts,
sales and marketing initiatives, general and administrative expenditures, the
expansion of our storage systems to serve other high growth data intensive
markets and funding capital expenditures. We may also use part of the net
proceeds to develop technology partnerships and to acquire other businesses,
products or technologies. However, we do not have agreements or commitments
for any specific partnerships or acquisitions at this time. By establishing
a public market for our common stock, this offering is also intended to
facilitate our future access to public markets.
Pending use of net proceeds from this offering, we intend to invest the
net proceeds in investment grade, interest-bearing securities.
The market for our products is highly competitive and we expect competition
to intensify in the future. Currently, we face competition from a number of
established companies, including EMC, HP, IBM and NetApp. We also face
competition from smaller, privately held companies and could face competition
from new market entrants, whether from new ventures or from established
companies moving into our industry. In addition, we compete against internally
developed storage systems as well as combined third party software and
hardware systems. A number of new, privately held companies are currently
attempting to enter our market, some of which may become significant
competitors in the future.
Our ability to compete effectively in our target markets depends on a number
of factors, including:
• our ability to effectively respond to aggressive business tactics by our
competitors, including selling at a discount or asserting intellectual
property rights irrespective of the validity of the claims;
• our storage systems’ scalability, performance, quality, ease of use and cost
effectiveness relative to that of our competitors’ storage systems;
• our storage systems’ interoperability with various operating systems,
software applications, data access protocols and other storage systems;
• our success in developing and using new and proprietary technologies to
offer products and features previously not available in the marketplace;
• our ability to attract and retain other VARs and OEMs;
• our success in identifying new markets, applications and technologies;
• our ability to continue to establish greater name recognition and build
upon our reputation in the industry;
• our ability to recruit development engineers and sales and marketing
personnel; and
• our ability to protect our intellectual property.
With respect to these factors, based on publicly available data, we believe
that we compete favorably on performance, scalability and total cost of
ownership, and that our ease of use and reliability are comparable to market
competitors, based on our customer feedback.
Company Description
We are a leading provider of high performance, highly scalable networked storage
systems for businesses of all sizes. Our storage systems deliver the levels of
performance, scalability, versatility and simplicity required to cost
effectively manage the rapid growth of unstructured data, such as
email,
business documents, web pages, digital images, audio and video, making them
particularly suited for data-intensive applications such as server and
desktop virtualization and cloud-based computing. Document retention and
access requirements of regulatory compliance are also driving rapid growth
of unstructured data. The need to manage and access unstructured data at
scale has resulted in the demand for next-generation storage systems that
minimize the complexities and overcome the performance limitations of existing
storage systems. Our storage systems leverage our proprietary file system and
flexible architecture to meet the needs of today’s most demanding applications
and to manage unstructured data at scale. We enable our customers to more
effectively explore, discover, research, create, process and innovate in
performance sensitive and data intensive environments.
Our storage systems minimize the complexities and overcome the performance
limitations of existing networked storage systems. We enable our customers
to address storage bottlenecks and accelerate processes to achieve their
critical business goals, such as enhanced revenue generation and improved
service offerings. Our massively parallel architecture is highly scalable and
delivers sustained performance under increased workloads, unlike competing
storage systems. Our storage systems combine our servers with our advanced,
proprietary software suite, and use standard interfaces and multiple tiers of
efficient enterprise-class storage devices to provide a wide variety of system
configurations to our customers. We also sell our servers independently as
a gateway solution that can be deployed in storage environments to enable
file services for easier data sharing, simplified management, server and
desktop virtualization and improved functionality. Our storage systems are
deployed throughout a wide range of organizations, from global businesses to
small organizations with a single location. Our diverse customer base
includes organizations in industries such as media and entertainment,
electronic discovery for litigation, or e-Discovery, energy, the federal
government, life sciences, Internet and cloud hosted service providers and
other enterprises. As of April 30, 2011, over 750 customers worldwide have
deployed over 2,000 of our storage systems.
According to IDC, an independent research firm, the network attached storage,
or NAS, and Internet small computer system interface storage area network,
or iSCSI SAN, markets are expected to grow from $8.1 billion in 2010 to $12.0
billion in 2014, representing a 10.2% compound annual growth rate, or CAGR.
We believe that our networked storage systems address multiple end markets
in light of the proliferation of unstructured data, the growing need to
manage it at scale and the continuing shift to Internet Protocol networking.
In addition, we believe that the Fibre Channel connectivity of our platform
enables us to address the migration and transition away from Fibre Channel
to next-generation storage systems that are optimized for unstructured data
and file-based applications. We sell our storage systems through multiple
channels; which include our direct sales force, our extensive network of
channel partners and a global original equipment manufacturer, or OEM,
agreement with Hitachi Data Systems Corporation, or HDS.
In fiscal 2009, fiscal 2010, fiscal 2011 and the three months ended April
30, 2011, we had total revenue of $74.2 million, $65.9 million, $85.6 million
and $24.7 million, respectively. In fiscal 2009, fiscal 2010, fiscal 2011 and
the three months ended April 30, 2011, we incurred net losses of $19.6
million, $15.8 million, $9.4 million and $4.3 million, respectively.
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We were founded in 1998 in Bracknell, England. In 1999, we relocated our
corporate headquarters to San Jose, California and incorporated as a Delaware
corporation under the name Synaxia Networks Inc. We changed our name to
BlueArc Corporation in January 2001. Our principal executive offices are
located at 50 Rio Robles, San Jose, California 95134. Our telephone number
is (408) 576-6600. Our website address is www.bluearc.com.
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