(upbeat music)
>> Announcer: From Austin, Texas, it's theCUBE,
covering Pure Storage Accelerate 2019.
Brought to you by Pure Storage.
>> Welcome back to theCUBE.
The leader in live tech coverage,
Lisa Martin and Dave Vellante,
wrapping up day one of our coverage of Pure Accelerate 2019.
Howdy!
Howdy you all!
>> Hey, I think I started a trend.
>> I think you did.
So Dave, this has been a day shot of a cannon.
I think as only Pure does well,
we had lots of conversations, lots of news this morning
which was nice to hear as Pure welcomes
their 10th anniversary in a couple of weeks.
We talked with customers, we talked
in many different industries, partners, puritans,
lots of innovation has occurred in their first 10 years.
Charlie got up on stage this morning
then he came to theCUBE and talked
about this modern data experience,
and the Tenex improvements in many things
but they're going to deliver it, not in the next 10 years,
in the next few years.
>> Yes, so we're seeing a story of growth here.
It's a theme, if you read, Pure's press release,
they start the first line as the only storage company
that's growing, which is true, at least the storage company
of size, a billion dollar-plus storage company.
And they talk a lot about modern storage.
To me, it's a story of entering new markets,
their second decade, TAM expansion
into new AI workloads, certainly the Cloud,
trying to make the Cloud a tailwind.
We just heard from Carey Stanton of Veeam,
data protection is an area.
Years ago, I remember talking to an executive at NetApp,
Tom George and saying, hey, are you going to buy
a storage backup company?
He said no, we're going to preserve
our partnerships with whomever,
Commvault, and Veritas and Veeam,
whoever they were working with at the time.
And you see Pure taking a similar strategy.
EMC at the time did something different,
they vertically integrated, they bought a company
called Legato, they integrated in, they compete,
and of course now, they're that, sort of, they're stacked.
And so Pure, small enough now,
still close to two billion dollars
at the end of this fiscal year,
that they don't have to necessarily vertically integrate.
We'll see the next 10, the third decade what happens there.
And then the customer input, you're seeing customers
are continuing to invest in Pure.
They're very happy.
What you've seen Lisa, is customers look at Pure
as shifting, and I said this on theCUBE earlier,
shifting labor into Pure as RND.
>> Lisa: Yes.
>> Now the hyperscalers like Amazon,
they'll spend time of engineering time to save money.
IT practitioners in the enterprise,
they'll spend money to save time.
And so, they'll happily spend money on products
if they can lower the IT labor costs.
They're totally different mindsets.
And you're seeing that's taking hold,
and Pure really has done a great job of that.
Now, as I said in my breaking analysis
a couple of weeks ago, analyzing the vendors,
Pure, clearly growing but these things go in cycles.
There's hard compares.
You're going to see, I guarantee you're going to see
these other companies chewing their models, they're big.
Pure talks about Tenex.
The reality is Dell EMC, Tenex's the size of Pure.
>> Right. >> So they throw off
far more cash, and so if you're a big whale
with a big install base,
that's what you do, you mine it.
If you're Pure, and you're small or you're 1.5, 1.7 billion,
you go hunting.
And that's the dynamic we're seeing.
I don't see that changing dramatically for quite some time.
Until the economy shifts, and then the mindset shifts,
and then we'll see how Pure adjusts its business model
from perhaps growth to more profitability.
>> And speaking of growth,
they're just coming off a very successful second quarter
where they announced last month in August,
28% you're on your growth,
adding about seven net new customers a day.
A lot of that attributed to innovation in the channel.
They did a good job in the last 18 months or so of pivoting.
Their smaller medium customer business
to the channel, allowing Pure to focus
on much more enterprise focus, and they actually,
I think, even in Q2 closed 50% more multimillion
dollar deals, this last quarter.
>> Right.
Well, and while those seem like great numbers,
they actually, the stock got hit after the quarter.
Why?
Because they lowered guidance.
Why?
Because of this NAN pricing confusion.
NAN pricing drops so fast in the quarter,
faster than expected and it sort of hurt
revenues a little bit, they expect that softness
to continue, so they've been conservative going forward.
Who knows?
They're smart to be going conservative
'cause I wouldn't say that they're sandbagging,
I'd say they're being conservative.
Begs the bigger question,
is storage kind of a crappy business?
And we'll see.
Why I say that is, if you're going to win
in storage right these days, you have to gain share.
Pure is gaining share.
Dell, at 0% growth, appears to be gaining share.
0% growth, that's not a great market,
so what's happening?
We don't really know.
Is cloud siphoning off demand
for the traditional on-prem storage?
Could be.
Can these companies make cloud a tailwind
or is cloud a zero-sum game?
I tend to think long-term, the more cloud,
the worse it is for on-prem
so that's why everybody's scrambling
for this multi-cloud strategy
which is very, very early days.
Multi-cloud today is largely a symptom
of multi-vendor versus a coherent user strategy
with clear managements. >> Right.
>> Now, the big five are trying to change that.
Pure is playing its role.
Companies like Veeam and others are playing their role.
So we'll see how that plays out.
I do think there's a clear opportunity in multi-cloud
but it's unclear how large that is,
or whether it's just going to be a series
of horses for courses, in other words,
the right strategic fit for the right workload.
>> So, your thoughts on the evolution
of their AWS partnership really looking
at what they're now doing with AWS
as this bridge to hybrid cloud, customers have choice,
on-prem hosted as a service public cloud.
Your take on this forcing function of bringing Pure
and AWS together at the customer base?
>> Yeah, I think it's actually a pretty clever
move by Pure, take their engineering and said,
okay, we're going to set all, do all the heavy lifting.
Set up AWS with EC2, priority EC2 instances,
networking, we're going to mirror, we're going to mirror.
They architected the basically block storage inside of AWS,
front-ending S3, which is the cheap object store.
Pretty innovative.
What it does is it gives customers an option
for higher availability block storage
that looks like Pure but runs on AWS in the cloud.
Very clever.
So all of the advantages of OPEX versus CAPEX,
the cloud experience
but it's the Pure management experience.
So, very clever.
Give Pure customers who are happy an option.
I'm sure they're hearing from the customers,
hey, we want to go to the cloud.
We heard it from the AWS speaker today.
Gartner did 88% of customers have a cloud first strategy
but 86 continue to spend on-prem.
>> Right. >> Okay, so smart by Pure
to do that.
I don't know how big a business that's going to be,
but it's a nice hedge in case, really, that train takes off.
>> And your thoughts on one of the other announcements
too Dave, another first via Pure, we've talked
about a number of times.
They've been first at a lot of things in the last 10 years.
Transitioning, offering most of their portfolio
as a service.
In your perspective against the other competitors
that you've mentioned, how do you see that?
How do you view that?
>> At first, Pure loves, they're biggest
than those small companies that people
have never heard of like Zadara Storage
who actually were probably one of the first
but they're the first again, billion dollar-plus
company to do this.
That's what customers want.
Customers want the cloud experience
and the big part of that cloud experience
is a pricing model and a utility model that's cloud-like.
When AWS announced Outposts, it was a clear sign
that the industry had to respond.
I'm not saying this is a response to Outposts
but it's clearly a response to the cloud model.
So, pay by the drink.
OPEX versus CAPEX, being able to have
that cloud pricing model, an experience
across the portfolio, is goodness.
>> So, Charlie, their CEO, talked about this morning,
this modern data experience going into the next decade.
It's going to be three Ss: Simple, seamless, sustainable,
we all want that, I think, for anything in life.
Your take on that from marketing to reality?
>> Yeah, well.
IT is anything but simple, let's be honest.
And seamless is probably the most overused word in IT.
>> Lisa: That I think is future-proof, those two.
>> Yeah, that's future-proof.
And sustainable, well, sustainable from a standpoint,
what I love about the model is,
and we heard this in the customer today,
well, the five year TCO was kind of a wash
but then beyond five years, it was a no-brainer
because we're now in that subscription model.
So I guess that's the sort of sustainability.
You think of sustainability in different ways,
like green IT for example but again,
IT is not really green, so good marketing.
Let's just leave it at that.
>> Well, we heard from, I think we had three
or four customers on today, wait, four.
Two legal firms, one in New Zealand, one in the States.
We heard from a utility company out of Tulsa, Oklahoma,
and then Mercedes-AMG Petronas Motorsport Formula One.
Three very different industries,
similar stories in terms of the management simplicity
of Pure, the evergreen model of being able
to swap out and take advantage of those, the innovations
and the things that Pure is doing the RND on.
And from a cost perspective,
but I think those were three kind of common
business and IT benefits that I heard articulated by three
very different industries of very different sizes.
>> I mean, I think it's important to remember,
you get really effusive commentary from the Pure customers,
and I'm not trying to be negative on that.
It's very clear that companies like Pure, Nutanix, Cohesity,
Rubrik, Veeam, they have great customer experiences,
and they're different than what companies
are used to buying very often.
Having said that, when we get
into these cost-benefit discussions,
typically you're comparing a modern circuit 2019 platform
with something that's five years old.
So you better have a significantly better metrics.
Again, having said that, you're seeing
a different experience and that's clearly coming
through in the customers that you talk to with Pure.
They started with a clean sheet of paper,
didn't have a lot of technical debt,
not a lot of baggage, there are lot
of some really smart people that in Silicon Valley
inundated with all this cloud stuff
and then they brought it forth.
It's very hard to build a billion dollar storage company.
Pure was the first once since NetApp, so.
>> And that was a couple-- >> 3PAR couldn't do it.
>> Decades in between?
>> Compellent couldn't do it,
EqualLogic couldn't do it,
you've never even heard of half
of these companies, right?
It's been many, many years.
Decades since you saw a billion dollar storage company.
That's how hard it is and to achieve escape velocity,
and Pure did it which is quite a feat.
And now the challenge is, their market cap is so large
at four and a half billion and growing, ostensibly,
that they maybe become acquisition proof.
Okay, that's a good thing on the one hand
'cause we love independent companies.
On the other hand, at some point,
TAM expansion within that little niche
gets very difficult.
That's why, for example, EMC had to go out and buy
a company like Legato and it made
some actually, some other crappy acquisitions
that didn't work out.
And then they stumbled it into VMware,
and again, it was part of the TAM expansion strategy
and they lucked out because the greatest acquisition
in the history of IT but I guess my point is,
at some point, a billion dollar company
becomes a two billion dollar company,
maybe again becomes a five billion dollar company,
and then it's like okay, what do we do next?
And you see, NetApp is in there now.
NetApp is growth challenged
and the TAM expansion challenged
but it's too big to get acquired.
For years, there were rumors about Cisco acquiring NetApp,
and it kept the stock up, and it never happened
so stock buy-backs, tuck-in acquisitions,
refresh of the portfolio, squeezing out a little bit
of growth, some bad quarters,
that's the nature of the big company.
So, Pure at some point will hit that,
but I think, we're a couple billion away.
>> They have also done a robust job
of building a robust partner ecosystem.
We talked to a number of them today,
Cisco, Nvidia, we had on Veeam, tomorrow's Splunk is on.
In terms of this growth that you talked about,
how well positioned are they with the strategic
and technology partnerships that they are not only building
but evolving quite quickly?
Where does that factor into your thoughts
about their future in the next decade?
>> I think the key to that is their architecture
in terms of their API framework.
It makes it easy to integrate, and to the extent
that they continue to grow, their customers
buy their products, love their products,
the high MPS scores, all that stuff,
it's easier to have a MPS score
when you're a billion dollar company
than it is when you're a 50 billion dollar company
but are you with a big portfolio?
But customers clearly, Pure has momentum.
People want to be with a winner.
Pure's a winner.
Their architecture is easy to integrate,
relatively speaking to the legacy vendors
and it's clean across the portfolio.
And so, that why I think the ecosystem continues to grow.
I'd like to see more growth.
I remember ServiceNow when they were a billion
dollar company, and thinking, wow.
It was about this size.
Now you go to ServiceNow, I mean, you see the big SIs,
you see a lot of niche players bumping into them
or jumping up.
I'd like to see that here, and I think it will continue.
>> Well, this is certainly a good chunk larger
than last year's Accelerate, which was about a year
and a half ago and look where we are, Dave.
We're in Austin.
This is Dell's backyard.
This is a bold company.
I was telling you earlier today
when I was doing some research for our guests,
something that catches my attention as a marketer,
that many companies cannot do, and that is be very bold
and very direct against their competitors
and tell customers, this is why you should be buying us.
I applaud that as a marketer and as somebody who gets
to interview folks on theCUBE because it's hard to do.
They have this bullish culture that they've always had,
and they have grown in the last 10 years.
We're seeing expansions and we're seeing them not afraid
to tackle anybody that they're customers are looking at.
>> So, I want to talk about some of the industry
dynamics as well.
The IT industry loves to vacuum
and I think in some respects,
the acquisition of EMC by Dell created a vacuum,
and Pure is taking advantage of that.
Now, for a while, Dell took its eye off the ball
and its storage business was affected.
And then they got their act together,
and now it's 0% growth, it's okay,
I'd like to see better growth there.
But they've been doing a lot of work
and Pure's referenced this in some of their press releases.
Dell is consolidating it's portfolio
which is exactly the right thing to do.
Dell EMC's portfolio is way too complicated
but you have to be careful.
You can't just consolidate overnight
because you're alienating your customers.
So there's still some of that going on.
The linchpin of Dell's strategy is VMware.
That is the key.
That's where the future is for those guys.
So, when EMC was an independent storage company,
it would fight tooth and nail, Jeremy Burton was,
we're going to take out NetApp.
They have all these crazy videos and they were focused.
A competitive oriented company that loved
its customers and was very customer focused.
In many respects, they're still competitive,
very competitive but they're not that independent
pure play anymore.
Now, it's NetApp and Pure, and I feel like NetApp
is so distracted with some of its struggles.
Pure is really, has an opportunity.
I remember Scott Dyson, years and years and years ago,
told me, when they were nobody said,
we think we can be the next EMC in storage
and I was like, really?
That's an amazingly bold statement when it appeared
that the storage industry was kind of disappearing,
and everybody was getting acquired,
and it was becoming this vertically integrated
converged infrastructure play with storage
and networking and service.
And that still may happen in cloud and everything else,
but Pure has an opportunity to really become the leader
in this business, and it has an opportunity to become
the number one storage company, it'll take some time.
For a while I questioned, does it really make sense
to have independent storage?
But you still see a lot of innovation,
certainly the backup vendors, you see start-ups,
you see smaller companies, VC money still coming in.
Back to something we said earlier,
IT generally in storage specifically, really isn't simple.
It's very complicated and it's very hard.
>> Well, Dave, we have had a great first day.
I'm excited to work with you tomorrow.
We've got Coz coming on, Kix coming on,
some more customers, lots of good stuff
in store for day two.
>> All right, cool.
Looking forward to it, Lisa. >> All right, likewise.
For Dave Vellante, I'm Lisa Martin,
you're watching theCUBE, the leader
in live tech coverage.
(bouncy music)