The two questions I get asked most are “Who is going to buy Pure?” and “When are you going to sell?” While answering can be fun, I must admit I’m not a huge fan of these questions. They seem a diversion from the important stuff—like making our customers and partners more successful, and making our product and our company better. But I do recognize why people ask, and so hope to sort this more efficiently 1:many on the blog rather than in 1:1 discussions. Plus it’s high time to get our thinking on Pure’s longer term future on the public record.
Not surprisingly, curiosity on the topic of mergers and acquisitions (M&A) seems to go up in times of competitive product announcements, such as those from EMC (NYSE:EMC) and NetApp (NASDAQ:NTAP). With the storage market leaders now striving to craft copycats of the Pure Storage FlashArray, why isn’t Pure looking for an exit?
The simple answer is we remain convinced that the best outcome for all of our constituencies—customers, partners, employees, and investors—is for Pure Storage to remain an independent company for the long term. Why? Customers and partners tend to be skeptical of changes in control, as the result is often a dilution in commitment to their success. And after an acquisition, Pure employees and investors would have far less control over shaping our destiny, as well as reduced upside (versus the exponential growth we are enjoying as an independent). Also, Pure is simply more valuable as an independent company in that we avoid a classic Innovator’s Dilemma—today, no one is telling the Pure team that certain customers are off limits because they are poised to buy boatloads of antiquated VMAX, VNX or OnTap.
So while it would be inappropriate to say never, I can definitively say that we have very carefully assembled the Pure Storage team for long-term independence. Pure’s Board of Directors is made up of industry veterans that have lead the creation of well more than $100 billion in public market valuation at companies like Cisco, VERITAS, Workday, Data Domain, Peoplesoft and BEA Systems. We’re not a group looking for a quick hit. Rather, we ultimately see M&A as a “safety net” if we were to come up short in our stated mission—to lead the industry transition from mechanical to solid-state storage.
Happily the need for that safety net is looking less likely every day. Pure is now the fastest growing company in storage history (at least for companies for which we have data), and the all-flash design we have been shipping to customers for three years has now been validated by the storage industry leaders. Having an ~18-month plus time-to-market advantage with the competitors coming to our playing field is as good as you can hope for in tech.
And we’re putting our money where our mouth is: over the past year, several storage market leaders have expressed an interest in acquiring Pure, some on multiple occasions. Our response has always been “no thanks” to even having the conversation. To revisit a favorite: Steve Jobs is herein quoted by Steve Lohr at the NYTimes:
“In a conversation years ago, Jobs said he was disturbed when he heard young entrepreneurs in Silicon Valley use the term ‘exit strategy’ — a quick, lucrative sale of a start-up. It was a small ambition, Mr. Jobs said, instead of trying to build companies that last for decades, if not a century or more.”
As an entrepreneur, there’s something subtle that happens if you start to think about selling your business: you take your eye off of Job’s ultimate prize—changing the world by building a quality product and business that stand the test of time. Today’s performance storage customer isn’t getting nearly enough for their money: Moore’s Law has effectively turned hard drives into tape (from the perspective of a CPU doing virtualized I/O, today’s “fast” mechanical disks are slower than tape was fifteen years ago). By staying independent, Pure is in the best position to right this wrong—why should you have to spend roughly a 1/3 of your data center CapEx and OpEx budgets on the “new tape”?
Looking forward, we will welcome purpose-built all-flash competition from EMC XtremIO and NetApp FlashRay when it arrives. Competition drives innovation, maximizes customer value, and grows markets. So long as we can convince potential customers and partners to give the Pure FlashArray a try, we are prepared to guarantee we can continue our winning streak. In the mean time, we’ll continue helping customers replace mechanical storage with solid state, unleashing them from the performance and complexity headaches of hard drives, and saving them money in the process!