Flash storage has been on the upswing for the past few years. Last week, the technology got a shot in the arm, as hybrid flash-SSD storage startup Nimble Storage had a successful IPO, pricing above its original share-price range and subsequently jumping more than 60% on its first day of trading. The company is currently valued at approximately $1.5 billion.

Nimble Storage’s IPO was in sharp contrast to the IPO of fellow flash storage player Violin Memory back in September; Violin priced in the middle of its IPO price-range, and has fallen more than 70% from its IPO price. Nimble’s thesis assumes that despite all the benefits of flash storage, hard disk drives might never go away, and as such the company has focused on optimizing flash in the context of HDDs providing a bulk of non-performance-critical sequential storage. Violin Memory (as well as Fusion IO and Pure Storage) on the other hand expected Flash to become cost-effective enough to be able to more broadly replace HDDs, which hasn’t been the case so far.  The outcome has been a vast difference in profitability (or loss-levels) between the two companies; Nimble lost $37 million on revenues of $78 million over the twelve months ending July’13, whereas Violin Memory lost more than $119 million on revenues of $87 million over the same period.

This is another example of the complexities of market adoption in the context of technology disruption in a Capex intensive industry. The market’s view right now is a hybrid / transition approach like Nimble Storage, that brings the best of both worlds to storage, has still a ways to go before it makes way for a flash only solution. The longer the market continues to think this way, the tougher it probably gets for Fusion IO and Violin Memory and Pure Storage to keep going!