This month we’re celebrating Pure Storage’s 5th birthday. Back in 2009, Pure was founded to lead the industry transition from mechanical to solid-state storage, and do so by delivering storage that customers love. We have made remarkable progress in that mission over our first five years:
- With our enterprise customers, we are now consummating 7 and 8 figure deals for multiple PB storage platforms for their next-generation cloud data centers;
- But yet we also offer a sub $100K array that makes all-flash storage accessible to nearly any company and any use case (including smaller VDI deployments and remote & branch offices);
- In the beginning of this year we were valued at over $3B by public market investors including Fidelity, T.Rowe Price, Wellington and Tiger Global, and our business has more than doubled since then;
- Despite our expectation that growth would begin to slow as Pure scaled operations, we have maintained our average of better than 50% sequential quarterly revenue growth (that is over 400% annually);
- Pure’s rate of growth is outpacing any systems company we are aware of, ahead of bellwethers like Cisco, NetApp, Data Domain, Nimble and Riverbed in their heydays;
- We continue to do nearly 100% of our business through partners, which now lead the majority of our business, and have built a network of over 300 global resellers (our partner sales teams extend Pure’s reach by roughly 10:1);
- We now have employees in 20 countries around the world; and
- Our customer satisfaction ratings (as measured by Satmetrix NetPromoter Score) are at least 30 points higher than those of our nearest “Big Storage” competitor.
Gartner ranked Pure #2 and, of the vendors measured, reported Pure had grown the fastest in their most recent Solid State Array (a.k.a. All Flash Array or AFA) market share analysis for 2013. We are hopeful our performance since then will make us #1 in 2014, but we will have to wait for the reports next year.
The battle with EMC for next generation “Tier 1” performance storage. The storage landscape has changed profoundly since Pure’s inception:
- Five years ago, 10K and 15K rpm spindles with a flash cache were viewed as the future of performance (a.k.a. Tier 1) storage. Today, with the purchase price of AFAs generally below that for fast spindles, storage leaders including EMC, NetApp and HP have declared the end of performance disk;
- Five years ago EMC VMAX was king of the performance storage hill, and who we expected to be our principal competition. Today, EMC leads with their AFA XtremIO, at least for engagements in which Pure Storage is the competition (call this the end of the VMAX era and the rise of the AFA); and
- Five years ago, there were numerous aspirants to the AFA category. Today, at least Pure finds we are increasingly in a two horse race with EMC—given their aggressive investment in all-flash (acquiring both XtremIO and DSSD) and willingness to cannibalize their installed base of VMAX/Symmetrix and VNX/CLARiiON, we now see EMC 2½ times more often than any other competitor.
Despite EMC’s apparent shift in focus from VMAX to XtremIO, our win rate against them has held up: Provided we get prospective customers to do a hands-on evaluation, we win more than 2/3 of the time. When we win, it’s because of our technology lead: Despite the fact that Pure and XtremIO have been around for about the same number of years, Pure has generally beat XtremIO to market with essential features such as compression, high availability, non-disruptive operations, snapshots, and native replication by more than a year. And via Proof of Concept (PoC) testing, we are generally able to prove out the substantial advantages in our implementation. Pure also score high marks for the quality of our customer support, and Pure’s fair business practices like all-inclusive pricing, Forever Flash and our Love Your Storage Guarantee. I caught up with some of our sales team recently to dig into why customers were choosing Pure over EMC alternatives. Here is some of that customer feedback (intentionally anecdotal and anonymous):
You and EMC both deliver Ferrari’s – unfortunately, they have to pull a UHAUL behind for all the hardware to make it work (VPLEX, RecoverPoint, PowerPath)…. Too complex.
Moving from VMAX to Pure to take Oracle clones from 3 days to 5 mins. The DBAs absolutely love your stuff, in fact everyone loves it!
If this team suffers performance issues or downtime it could mean thousands of offices down & unable to close deals due to missed cash flow. During the POC we pulled a controller, 6 drives & pushed our hardest workload and the FA420 only bumped up to 1.8 ms latency.
We were taken back by the simplicity of Pure Storage. POC got us by any pre-conceived concerns about resiliency and support. We had our VP of Infrastructure down in the data center pulling drives. After participating in some of the resiliency testing, he asked his team: “Why would I ever buy another spinning disk?”
Forever Flash enabled a $2m positive TCO for Pure even though Big Storage gave away a full year of maintenance.
When we lose to EMC after a Proof of Concept (POC), it is often because the competing gear has been heavily discounted (we hear reports of hardware being offered up for free), or the customer has received significant maintenance concessions on their existing storage. We have observed even more aggressive discounting after Pure has earned a foothold within the data center. In such situations, when a customer is forced to choose between acquiring the better technology or accepting a “one off” deal of a lifetime from their legacy vendor, we only ask customers to consider their longer term procurement strategy: if a vendor is willing to offer such steep discounts to keep Pure out, how much leverage would the customer enjoy from introducing a second vendor like Pure into your environment to setup real competition for your future business?
With AFAs now more cost effective than Tier 1 disk arrays, and an order of magnitude faster, more space and power efficient, more reliable, and simpler, we expect to see the market for 15K/10K disk array to drop toward zero over the course of the next 4-5 year refresh cycle. With Pure and EMC positioned as Leaders in the inaugural Gartner Magic Quadrant for Solid-State Arrays, in our view both Pure and EMC are well positioned to win this share shift: Pure crafted the original recipe for all-flash below the cost of disk, and EMC acquired perhaps the two most interesting AFA upstarts after Pure, XtremIO and DSSD. Our guess is that EMC will race their AFAs as they did their disk predecessors—Is DSSD the new VMAX and XtremIO the new VNX?
Less clear is which other AFA competitors will get to critical mass, but no doubt the competition will remain fierce given we are still talking about $15B per year market opportunity.
The innovative road ahead. With the leading mechanical storage architectures now two and three decades old, no doubt the storage market is ripe for disruption. Much of Pure’s efforts to date have been establishing parity for AFAs with Tier 1 disk arrays:
- Cost per GB usable, via a global average of over 5:1 data reduction via variable block inline deduplication and compression;
- High availability (including protection against overlapping device failures);
- Non-disruptive operations across hardware swaps, expansions and firmware upgrades (uniquely in Pure’s case with zero performance impact);
- Snapshots & clones (optimized with data reduction); and
- Native replication (similarly optimized).
Looking forward, however, the opportunity for Pure will be more about shaping the next-generation of cloud and web-scale data storage than just replacing legacy disk arrays. The products we are crafting will ultimately compete with commodity server hardware and help change the way systems software like databases and file systems are architected. An opening salvo in the ramping debate between shared and hyper-converged storage can be found here, but we will have much more to say on this over the next 12 months.
Building the next great storage company. We Puritans remain convinced that the best path to achieving our mission is to remain independent. While we have no doubt that all of the companies expressing interest in acquiring Pure would carry on investment in what we’ve started, as an independent, Pure Storage can be much more effective at hiring the best and serving the needs of our customers and partners. More than any other question, customers, partners and employees ask me what is Pure doing to protect our future as a long-term independent: We are
- Courting only investors and employees who share our long-term vision of creating the next great independent storage company (we recently hired a Google finance veteran to be our new CFO, completing our management team);
- Carefully managing our invested cash (Pure has raised $470M in total) to ensure runway to profitability;
- Building the best in class intellectual property portfolio around flash storage as well as acquiring patents we can use to defend Pure from legacy incumbents; and
- Adopting a dual class share structure – All current shareholders (employees and investors) get 10 votes per share, but shares that change hands revert to one vote, making it very difficult for a hostile acquirer to get a voting majority.
Thank you! Let us close our Puritan 5th Birthday recap with our profound thanks to our customers and partners. We couldn’t have done it without you, and we promise to continue to become better for you. Comparing ourselves to the competition we can feel pretty good, given storage products tend to be tolerated rather than liked, let alone loved. But our aspiration is to be the best we can be for you, meaning we have a lot of hard work and innovation ahead. It’s been a great 5 years, but we’re just getting started.
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