Seeking Alpha

Dr. John Faessel's  Instablog

Dr. John Faessel
Send Message
Dr. John L. Faessel is a seasoned and respected Wall Street professional with industry-wide recognition for expertise in market strategy and analysis. He is widely recognized for his insights in public companies. For over 20-years Dr. Faessel’s ON THE MARKET reports have been widely distributed... More
  • Turnaround Stock Of The Year & Best Idea > (IWEB) - In The Sweet Spot Of History’s Fastest Ever Growth Trend*  0 comments
    Mar 20, 2012 9:49 AM | about stocks: IWEB

    Dr. John L. Faessel


    Commentary and Insights

    In the sweet spot of history's fastest ever growth trend*

    With the award winning software**

    With management that's just shepherded a mega-takeout***


    *** Today the central focus of my ON THE MARKET report will be the immensely successful marketing efforts of Stephen Toole, the Chief Marketing Officer [CMO] at (OTCPK:IWEB), who was the CMO at AppAssure Software Inc. over the past 2 years when they experienced their explosive growth. Toole was instrumental in driving sales for AppAssure (a private company), leading to its exit last month in the Dell (Dell) acquisition. For details of that acquisition, link here.

    AppAssure recently reported 194% revenue growth year-over-year in 2011 and 19 consecutive quarters of growth. Inc. Magazine ranked AppAssure as the nation's fastest-growing backup and replication software company.

    Toole has said that he sees at least the same potential growth at (OTCPK:IWEB), and he came to the company to repeat the impact he made at AppAssure, only in a market that's far bigger than AppAssure's market for Windows only backup software. Of Note; when Toole came to AppAssure in January 2010 the company had 8 sales reps, by the time he left at the end of 2011they had 100 reps.

    Toole has already begun to implement very similar go-to-market strategies at (OTCPK:IWEB) since starting at the beginning of this year. (He left AppAssure at the end of 2011).

    Companies only buy backup once every five or so years. Backup software that's limited to the Windows Server operating system also has limitations as to its value in heterogeneous environments. Contrast that with (OTCPK:IWEB)'s market opportunity for storage, which is not only 10x larger than the backup software market, but is growing at a much faster pace.

    Indeed, (OTCPK:IWEB) has large competitors, but so did AppAssure (Symantec Backup Exec, Veeam, Acronis, Commvault, IBM's TivoIi Storage Management [TSM], Microsoft's Data Protection Manager [DPM] etc.), which didn't inhibit AppAssure's astronomical 24-month growth surge. It came down to sales and marketing execution of a value oriented solution. (OTCPK:IWEB)'s value is clear relative to their larger competitors, as I have described in my recent reports, and the list of recent deals substantiates that fact.

    A recent quote from Toole: "Clearly our IceSTORM OS gives enterprises the capabilities they need for key functions such as replication to the cloud and storage provisioning for mission critical applications. Combined with IceWEB's unmatched performance, high availability and our unbeatable price point make our systems a no-brainer for today's demanding enterprises."

    Surging orders and extremely high inquiry demand have produced significant increases in top line quarter over quarter growth. "That trend will continue through the end of the year," says (OTCPK:IWEB) management. See press releases re the multitude of recent sales to the US Government, Department of Defense, the US Geological Survey, multiple local and county governments, plus a steady stream of sizeable orders from mid-to-large commercial and public sector customer's link here.

    (OTCPK:IWEB)'s product line sells at a fraction of the cost of the competition at a price point that's consistently 30% lower than the high cost vendors such as EMC and NetApp. And, the sale of the award-winning product carries more lucrative commissions.

    Additionally, in late January (OTCPK:IWEB) announced its new "IceTIME™ Guarantee": it promises a setup time of five-minutes or less for any of its unified storage appliances, compared to the hours required by complicated systems manufactured by larger vendors.

    The trend over the last four years has been that when the big companies validate the advancement in technology and software of the smaller companies, the big guys follow with original equipment manufacturing [OEM] licensing agreements and buyouts. When revenues ramp quickly in these small co's the larger companies look to acquire them - as the recent and numerous deals by Dell, HP, IBM, Oracle, NTAP, EMC and Intel attest.

    I'm a believer that it's only a matter of time before one of these big boys acquire (OTCPK:IWEB) at a fat multiple. Acquisition multiples are running from 7 to 10 X revenue. Rumors of a Fusion-io (NYSE:FIO) take out by Intel (NASDAQ:INTC) fired a 13% jump in (FIO) shares a few weeks ago. (FIO) shares trade at over 9 X revenues (their biggest customer is Facebook).

    * Premier global provider of market intelligence and advisory services, IDC estimates that the "spend" on Big Data solutions will be on data storage, growing at a compound annual growth [CAGR] of 61.4% through 2015. You can access the IDC report for a cool $4,500 here.

    More backup re the stupendous market is applicable here. Global commerce alone creates an amount of data each hour that is of such astronomic proportions that it boggles the mind.

    (NYSE:IBM) Chairman, Samuel Palmisano, expects business data to increase 44 times over the next decade to 35 zettabytes. (1 zettabyte = 1,000,000,000,000,000,000,000 bytes).

    Now add the 'other' consumer data traffic from videos, texting, photos, etc that the world generates and that total is supposed to double every 18 months. Cisco expects it to increase another 26-fold by 2015. No wonder that Investor's Business Daily has the sector of "Data Storage" stocks at a current No. 18 from No. 139 (of 179 sectors) since the start of February.

    Cisco Systems (CSCO) estimates there will be 15 billion mobile devices in use by 2016. That's more than twice the current amount and equal to two (2) devices for every man, woman and child on the planet. Notably, total yearly sales for all mobile-related devices and services just topped $1 trillion. This exploding use of mobile devices promises to be the fastest growing technological trend ever and possibly the biggest.

    ** (OTCPK:IWEB) won the distinction of DCIG 2012 Midrange Array Buyer's Guide "Best in Class" in the Replication Software category as noted in the Industry Replication Software Award for 2012 competing against all the big guys, including EMC, NetApp, IBM, HP, et al. Its #1 ranking in the Replication Software category over these market behemoths shows that IceWEB is currently better positioned than its competitors to meet these specific market needs. The independent report was published by DCIG, an industry expert analyst firm.

    If you wish a copy of the entire DCIG report in pdf format, email me at

    All (OTCPK:IWEB)'s Unified storage Platforms are available through the company's exclusive value-added distributor Promark Technology that markets Iproducts throughout the United States through its nationwide network of 1,200 channel partners.

    IceWEB was incorporated in 1994, and was twice named Inc. Magazine's 500 Fastest Growing private US corporations and was recognized as Deloitte & Touche Technology "Fast 500" North American public or private technology companies.

    Visit (OTCPK:IWEB)'s exceptional website:

Back To Dr. John Faessel's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (0)
Track new comments
Be the first to comment
Full index of posts »
Latest Followers
Posts by Themes
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.