Rackable Gets Closer to IPO

Rackable is an interesting company – it builds the servers which power many of the web’s most notable brands, including Google. The company made its name building servers to Google’s specs, and it filed to go public back in February. But when you read their recently amended S-1, the name Google barely comes up – and when it does, it’s not as a customer per se, but rather as a transaction: Google paid Rackable in shares back in 2002, and Rackable sold those shares in 2004.

According to the S-1, Yahoo and Microsoft are Rackable’s major customers these days:

A relatively small number of our customers have historically accounted for a significant portion of our revenue, and we expect this trend to continue. Because our revenue has largely been generated in connection with these customers’ decisions to deploy large-scale server and storage farms, their capacity requirements can become fulfilled, whether temporarily or otherwise, and as a result they could purchase significantly fewer or no products from us in subsequent periods. Inktomi and Electronic Arts together accounted for 41% of our revenue in the year ended September 30, 2002, and 34% for the three months ended December 31, 2002. Yahoo! and Inktomi, which has since been acquired by Yahoo!, collectively accounted for 46% of our revenue in 2003. In 2004, Microsoft (for which Hewlett-Packard acted as a contractual reseller for the majority of our sales) and Yahoo! accounted for 36% and 23% of our revenue, respectively.

Other customers include Sony, TellMe, and major enterprises like Deutsche Bank.

I’ve asked Rackable CEO Tom Barton to come to Web 2.0 and give us an overview of the real platform web – the bare metal computing that enables all those cool Web 2.0 business models. He’s agreed, and hopefully by then he’ll be out of the quiet period…..should be interesting!