Investing more in innovation, globalization, and a whole lot of orange socks!
With $470M invested in Pure, we sometimes get asked the question why we need so much money to build our business? The short answer is that we don’t.
We have the majority of the $150M from our Series E, are generating millions in cash from operations and could be cash flow positive today, if we decided that profitability, at this stage, would create more value for the market and our shareholders than continued hyper growth.
With our 50% sequential quarterly growth beating the fastest growth profiles of some of the most valued and respected technology companies (NetApp, Cisco) in history by 2X, our BOD and Puritan team agree that we should continue to invest for growth, as long as we’re smart about it. Dietz outlined why we’re doing this in more detail in his blog, and I’ll provide some perspective in what we’re going to do with it below…
- The market is huge (roughly $15B/year is spent on just block storage annually, which is an aggregate $60B spend over a 4-year deployment lifecycle) and one we believe is poised for change;
- We believe we have a significant technology lead on the competition;
- Every metric we look at (and with all the PhD’s running around here, math is key at Pure!) enables us to prudently track customer adoption rates, sales cycle time, sales team productivity, partner contribution, daily demand generation statistics, brand awareness campaigns, and head-to-head win rates against disk/hybrids. Similarly, we are also tracking that our international and new market entry investments are paying off in record fashion.
With a market like this, with a disruptive force as significant as the all flash array (AFA) creating the classic “innovators dilemma” for the multibillion disk franchises and as long as those metrics I mentioned above continue, we believe we should keep the pressure on in accelerating the transition from legacy disk to all-flash.
Focusing additional investment in 4 areas
In part one of our strategy for building a war-chest we’ll dig deeper on:
- Innovation and Customer Experience: Scale Engineering and Support to stay ahead of growth and disrupt adjacent markets down the road;
- Globalization and Segmentation: Deeper investment into enterprise, commercial and public sector segments in all markets including Americas, EMEA and APJ;
- The C Suite: Focused investment in marketing branding and demand generation across executives, IT and line of business (LOB) leadership to reach new audiences;
- Channel-First: Deep investment in partners globally to grow our business faster and better-serve customers.
1: Innovation and Customer Experience
Innovation will continue to be a strategic advantage for Pure. We’re lucky to have assembled such talented engineering teams and we will continue to hire fast and hire the best. Similar to Google and VMware (in its heyday), we are committed to identifying and hiring the best in the business in order to continue strengthening our technology and extending our innovative platform into adjacent markets. Keep an eye out for more to come from Pure on this front soon.
We invest six months ahead of our anticipated demand to keep our Support team ahead of the curve and to ensure we continue to deliver the best customer experience in the business (goal to maintain or improve our 74 Net Promoter Score). Why is support so critical? While we’re beating 99.999% availability already, proactive support using cloud analytics can catch ~90% of issues that may arise before our customers are affected. It is also important to hire a trained technical support staff that can deliver 24 x 7 support for thousands of global customers. Maintaining an outstanding customer experience is paramount to our business and we will not sacrifice it at any cost. Last year, 56% of our customers made repeat purchases, so while new market and customer expansion is key, taking care of our existing customers will always be more important.
2: Globalization and Segmentation
With roughly 25% of our business being generated outside of North America today, after just over a year on the ground in many locations, we are very confident that customers and partners around the world share in the appetite for change in their storage infrastructure. In fact, in markets where space, power and cooling is at a premium, or in markets where they have been early adopters in buying technology for competitive advantage we have seen massive growth in a very short period of time. With 15 countries open, we can leverage these funds to further accelerate our growth in these markets, while also considering expansion more aggressively into new regions.
3: An Eye Toward the C-Suite
Increasing awareness at the C-level (CEO, CFO, CIO and CTO) is an untapped opportunity for Pure and something we’ll be laser focused on in the future. We’ll continue to ask C-level leaders to challenge disk based investments: why would they want to be strapped with another 3 to 5 years worth of legacy disk-centric storage, when they are up for a “refresh”? While our win rate is high for deals in which we are engaged today, we are cognizant of the decisions happening where we are not involved because customers just don’t know that they have a plug-compatible all-flash alternative that costs less! This represents huge untapped potential for Pure. To help solve this, we will amplify marketing and invest in additional sales teams with an increasing focus on vertical segments, all to drive faster adoption of Pure across Enterprise, Commercial, Government and Service Providers.
4: Channel-First, Always
We remain 100% committed to the channel as we grow, and have from day one viewed the channel as a true partner and essential competitive advantage. We have recently introduced our 2014 update to the Pure Partner Program, containing more investment in incentives and enablement for partners globally. Contrast this with some legacy vendors who are cutting costs and reducing investment in the channel — Pure Storage is doubling down on partners. This is an opportunity for our partners to grow their business by penetrating enterprise accounts that are often off-limits “house” or “direct” accounts from the big storage incumbents, differentiate themselves from other Solution Providers and package a mix of Professional Services Solutions that add incremental value to their customers.
In a nutshell, we will be accelerating investment across all aspects of our business. We will keep bright-line focused on driving innovation, hiring the very best new Puritans and delighting the customers with the very best experience possible. We’ll do this and continue to be prudent with the resources our investors have entrusted us with, with the goal toward building the next great storage company.
The Puritan People
Part two of our strategy for building a war-chest involves our companies best asset: our people!
While we’re super geeky and proud of the value that our technology innovation is delivering to our customers and partners, we also recognize that our ability to continue to scale and deliver the best in class customer experience is ultimately about hiring the very best of the best. We believe that enterprise technology is as much of a “people” business as it is a “technology” business. As Dietz references in his blog, we will take our time on hiring, even if it means growing slower, to ensure we find the right fit. This is true for the CFO or any Puritan hired at any level, regardless of seniority. Having the best people in every function, in every market who share our vision and values is absolutely fundamental to our continued growth and we are going to do everything we can to keep the quality bar high for talent within Pure and for the partners we work with.
As part of this: please welcome Dan Heydenfelt, Kevin Delane and Maya Marcus us as our newest Puritan Leaders!
Dan joins us from executive roles at Symantec, Limelight and Gartner Group and will be focused on scaling our operational infrastructure across all aspects of our global go to market, ensuring we maintain the best in class customer experience and employee productivity metrics we have enjoyed thus far, as we scale in revenues, customers and employees.
Kevin leads our continued investment in penetrating the Global 1000 Enterprises, expanding and deepening our strategic alliances across leading Independent Software Vendors (ISV’s), hardware companies and global systems integrators and expanding our rapidly growing Service Provider (think cloud computing) relationships, globally. He has deep experience in delivering a consistent, global customer experience for customers, in creating leverage through the technology ecosystem and in rapidly scaling businesses from hundreds of millions to billions. Prior to joining Pure, Kevin spent 19 years in executive roles at IO and EMC, where he was responsible for running global accounts, OEM, alliances, and systems integrators.
Maya joins us to lead employee success at Pure. Maya spent 10 years at Nvidia building and scaling the talent acquisition and employee success functions, where she managed an HR business partner team that helped the company grow from 1,000 employees to over 8,000 globally. Most recently, she was the Chief People Officer at Saama Technologies. Maya has a BS and a Masters from Stanford and shares our passion for providing the best culture and employee experience, recognizing that our people will continue to be a strategic differentiator for Pure. With her team’s help, we will scale our business to thousands of Puritans strong in the years to come, without losing our entrepreneurial and yes, slightly irreverent spirit!
We’re just getting started on our journey to enabling the next generation all-flash data center for our customers and partners and in the process, are building the next great storage company. We’re excited to have the confidence of our board of directors, investors, partners and customers and look forward to continuing to make progress on our mission, replacing one rusty mechanical disk at a time.