Dr. John L. Faessel
ON THE MARKET
Commentary and Insights
I call (OTCPK:IWEB) my "Turnaround Stock of the Year" and I see multi-bag potential for this little company.
A narrative that holds exceptional risk/reward potential
IceWEB Inc. (OTCPK:IWEB) OTCBB - in breakout mode
In ― the sweet spot of the world's greatest ever IT play…
With ― the #1 ranking* in the DCIG 2012 Midrange Array Buyer's Guide (a win over EMC, NetApp, IBM, HP, et al)…
With ― surging orders and extremely high inquiry demand that 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)…
In ― a Market that knows no bounds. IDC's Benjamin Woo said "Storage, in particular, shows the strongest growth opportunity, growing at 61.4% CAGR through 2015. *
First, a Must-Know: The era's new buzzwords:
My quick back pocket definitions (for the full enchilada use the hyperlinks):
Big Data: is IT's word for the staggering and mind boggling increase in data volume, the hyper velocity that it comes in at, and its multitudinous varieties. Consider the challenges in dealing with 'its' capture, storage, and analysis in a way that's manageable and affordable.
Unified storage: think better the term unifying - gathering - 'it' in from all the disparate, scattered sources; i.e. imagine IBM's data and where it's located on planet earth, and then corralling it on one platform.
Replication: reproducing the data and sending it out to a new location. Think safety, security and availability for business continuity in the event of a disaster.
Cloud: is a model of networked online storage where data is maintained in virtualized pools of storage which are generally hosted by third parties.
What (OTCPK:IWEB) brings to the table is robust, highly manageable, scalable and affordable unified storage systems, so that its clientele can harness the benefits of Big Data by making intelligent assessments of mission-critical applications by the leveraging of their information assets.
Key is that the (OTCPK:IWEB) 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. Another merit of (OTCPK:IWEB) is that its "IceTIME™ Guarantee" promises a setup time of five minutes or less for any of its unified storage appliances, compared to hours required by complicated systems manufactured by larger vendors.
(OTCPK:IWEB) is in the thick of the mushrooming play with an ever growing list of customers, like: the U.S. Army, The Department of Defense, the US Geological Survey, as well as multiple local and county governments, plus Google, Cisco, and a steady stream of sizeable orders from mid-to-large commercial and public sector customers.
On Thursday (OTCPK:IWEB) announced a new top-end, more robust operating system called the IceWEB 7000 that scales to a mammoth 1.8 petabytes for use in large data centers and cloud environments.
Here is a key quote from (OTCPK:IWEB) CEO John Signorello that explains the company's recent jump in order flow:
"With the release of the IceWEB 7000 system, IceWEB's family of unified storage systems provides a complete range of capabilities and performance from entry level to the highest levels of redundancy and availability for virtually any data center environment. The 7000 uniquely positions IceWEB at the forefront of the growing market for unified data storage as more and more organizations recognize the overwhelming value of a single, scalable and easy to manage platform to optimize file and block storage over any protocol, both locally and in the cloud."
Performance, features and price make the IceWEB 7000 storage system a perfect fit for both data center and disaster recovery cloud storage sites that require high availability on a limited budget. The "7000" provides features such as thin provisioning, shared storage pools supporting multiple storage tiers, in-line compression and deduplication, instantaneous snapshot creation and rollbacks, replication, mirrored high availability, and virtual machine integration.
Add the above-mentioned price point advantage that's consistently 30% lower than the high cost vendors, plus the DCIG award that speaks to quality, reliability, and of highest importance superiority, and it become obvious why sales are ramping.
A recent hire by (OTCPK:IWEB) is also relevant and noteworthy. Steven Toole, now Chief Marketing Officer [CMO], was instrumental in driving sales for AppAssure, the company acquired by (DELL) last month. AppAssure recently reported 194% revenue growth year-over-year in 2011 and 19 consecutive quarters of growth. 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. For details of the Dell acquisition, link here.
Importantly, much of Toole's sales force at AppAssure is now with him at (OTCPK:IWEB) and more are on the way, I hear. The "sell" is easier too as companies only buy backup once every five or so years, contrasted with (OTCPK:IWEB)'s market opportunity for storage that is not only 10x larger than the backup software market, but is growing at a much faster pace.
Of Note: prior to AppAssure, Mr. Toole served as head of marketing technology products for IBM and Symantec to the US Federal Government for immixGroup, a leading government technology marketing firm, following a period in 2004-2005 when was head of marketing at INPUT serving over 1,000 of the largest technology contractors to US government organizations (INPUT was acquired by Deltek)
So, in sum what we have here is a still small company (market cap of only $28 million) whose sales of its award winning and next generation product line are snowballing to a growing list of major Class A entities. Growth in the data storage sector is mushrooming and a veteran management team has enormous operational and marketing experience. Obviously, a penny stock at $0.18, but when you connect the dots on this one exceptional risk/reward potential exists.
Recent acquisitions in the sector have been priced at exceptionally high multiples of revenue, some as high as 6 to 8 X revenue; this makes the IceWeb shares even more compelling. The eventual exit strategy for (OTCPK:IWEB) will be a takeout by a major... Bet on it!
Once again, management's earlier quote is decisive: "That trend will continue through the end of the year." I believe that this is carefully understating the boom in sales that's well underway and downplays the arc of the trend. I call (OTCPK:IWEB) my "Turnaround Stock of the Year" and I see multi-bag potential for this little company.
* (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. Link here for the NY Times article.