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in Boston connecting
with thought leaders all around the world,
this is a CUBE conversation.
>> Hello everybody and welcome to this CUBE conversation,
you know in our last breaking analysis we worked
with ETR and they put out
a new forecast on IT spending for 2020.
The consensus coming into 2020 was for 4% increase,
based on the survey work they've done
with CIO's it's now down to 0%.
Surprisingly about 40% of the the CIO's
and IT practitioners
that they interviewed said they expected no change
in IT budget for 2020.
A surprising 21% say they actually expect
to increase spending as a result
of work from home infrastructure.
Still a very large portion of the survey sample
said they're going to decrease spending
and that's why they're now calling,
ETR's calling for a flat spending in 2020.
Clearly one of the challenges
or those companies that are exposed
to supply chain disruptions,
whether it's manufacturing
or retail or certain CPG or industrial.
And with me today to talk about specifically supply chain
within the storage market
and within pure storage is Mike Fitzgerald,
who's the VP of Operations at Pure.
Mike thanks so much for coming on
and talking about this important topic.
No thank you Dave.
Good to see you and good afternoon and good morning.
>> So take us through what your seeing,
well first of all what's your roll?
VP of operations,
your in charge of supply chain is that correct?
>> Yeah, I have all of the supply chain,
all of the manufacturing logistics,
distribution network at PURE.
>> So what's going on with,
what are you seeing in the industry,
talking to your colleagues.
I'm sure that your discussing this with your peers.
Give us the high level and the macro
and then we'll get into what's going on
with PURE specifically.
>> Well certainly they're you know
within early January we started
to hear whispers out of the parties
that there were going to be some potential implications
with the supply chain.
So at that point in time we did a lot of actions
and activated at PURE to try to stay ahead of that
with speed being gone of the key things
that we wanted to make sure we we're focusing on.
But the industry as a whole,
there was a lot of focus over the last several months
in how do we make sure
that not only do we understand what our risk is
in the Far East/China but how do we mitigate that risk?
And then as we transpired and things have gotten
to where we are now, the risk has become more
of a global risk in terms of a supply chain management role.
>> So is it really was it the exposure to China?
Was it really NAND supply?
Because that's been sort of zigging and zagging
for the last you know several periods.
Can you give us a little more color
on really what you were paying attention
to in terms of some of those hotspots?
>> Yeah well one of the things we tried
to do early on is the design
of our supply chain at PURE,
we've tried to diversify that.
We've got a portfolio-based foot print across the globe.
Early on we took a lot of steps
to minimize the amount of reliance on China.
A lot of that was driven by tariff implications
but certainly it's become our friend
as we've gotten into the situation with the COVID.
So lot of actions and activity in that space
to make sure that we've got a responsive supply chain
in place from a global perspective.
On the NAND there's a lot of discussion
, lot of actions and activities in relationship to NAND,
certainly with the rising price, the market demands,
whats going on with the supply versus demand ratios
, but one of the things that we have a huge advantage
of at PURE is that we build our own SSDs.
So NAND is a component is what we're buying
which is not directly related
to what I'll call China shortages.
A lot of the NAND that's not built in China
that we consume and put into our SSDs.
>> So are you saying PURE's not having any kind
of supply chain disruption
or your managing that?
What are you doing there specifically
and how much of that is just sort of reduced demand versus
so your approach, the supply chain?
Can you address that?
>> Yeah we are not seeing a reduced demand right now.
One thing, kind of an overarching statement
is we have plenty of supply available right now.
We are, our portfolio is at standard lead time
and so we've got product in place as a matter
of fact we've seen an uptick in some of the demand streams,
specifically in VDI,
as well as PURE as-a-Service in less human element.
The VDI certainly for the work-from-home type of scenarios.
We're actually seeing what I would call a more
of an increase in demand
with shorter lead times bribing us
to put product onsite in emergency situations.
>> That's interesting
because a lot of suppliers that I've talked
to have said look we are going to manage
this by communicating increased lead time to our customers.
Your saying PURE is actually seeing the opposite.
You've got good supply and your seeing strong demand
and your able to meet either on time
or even at an accelerated pace?
Did I get that right?
>> Yeah absolutely Dave, actually over the last three days,
the weekend,
we've had three separate installs
in the locations on an emergency basis
where we've responded in less than 24 hours
and gotten product onsite,
installed and saved the customers from running
into situations where their work from home staff
was not able to come up.
>> You know Mike, you've obviously got a lot
of experience in this space, operations and supply chain,
you've done this for awhile.
PURE as a company does a lot of things differently,
I've been following them since the early days of PURE
but I have to be honest I've never really dug
into PURE's supply chain you know approach
in any differentiation you have there.
How would you compare PURE's approach to others
that you've seen in the industry's maybe historically
or what your seeing today.
What are you guys doing that's different?
>> We've designed our supply chain
to be a responsive supply chain.
With the recognition we're growing roughly 20% year-over-year.
We're leaning into the supply chain to be able
to not only be enable that growth but be able to enable surge.
So some of the things that we do
in designing the responsive supply chain,
we talked earlier about making sure
we have the right manufacturing footprint
and that we've got the right risk mitigation so
that we can have that portfolio coach related
to diversity in this footprint
but we've actually staged material
in the supply chain intentionally to enable us to be able
to surge in response to demand increases.
We've done the same with capacity.
So we've actually leaned into our network
and increased capacity to be able to absorb surges
in demand which is certainly paying off
for us now in this situation where early on
in January we started seeing the signs
that we we're going to have some demand constraints.
So we went out and placed buys,
we went long is probably the best way to put it
and try to make sure that we were stocking up accordingly.
So that if indeed there was a constraint
that happened or constrained environment
that we had product available
and that's what's paying off for us right now.
>> Mike is that a brute force decision making process?
In other words is it more gut feel
from your tribal knowledge and experience at this?
Are you using analytics in anyway
to inform sort of where to turn those knobs?
>> Well it's a little of both Dave,
some of it is I've been in this game for awhile,
I've seen these before.
So we knew early on that it was time to pull the trigger.
So we did.
One of the advantages we've got at PURE is
that we're a small team, we're a nimble team,
decisions can be made today and implemented
this afternoon and that is basically the way that we did it.
We got the right stakeholders together we made
some conscious decisions on what we were going to do
to try to mitigate the risk going forward.
Pulled the trigger and now we have supply available
and we continue to ship.
>> I wonder if we could talk a little bit about,
I'll come back to that, VDI.
As I said at the top of this we saw
from the ETR survey data that work from home was one
of the few areas that was really you know picking up.
And it wasn't just video conferencing it was VPN,
it was networking bandwidth,
it was security infrastructure to support
that work from home capability etcetera.
And obviously VDI is part of that.
I wonder if you could talk a little bit more about that,
not only in terms of what your seeing for your customers
but what is PURE doing just in terms of you know,
remote support and other things.
Where are you focused there?
>> Two things, I'll talk about the VDI solution.
We've got solutions certainly
that we're offering into the marketplace,
we've had as I said a significant uptick in demand
and I think many would say that storage is the backbone
of an effective VDI solution,
that's what we do for a living.
We've also got several different solutions
that we're implementing or having customers implement
and simplify. The implementation of the VDI. And one
of our key things is we're simple, we're easy,
we can put things in place quickly.
As I said we're loading data centers in hours versus days.
The other question Dave about the support
and I'll view that in two different areas.
One the implementation of existing product,
or the support related to that.
Our support network is 100% up
and running right now, we have componentry,
we've actually forward stock incremental a componentry
into the depots to make sure that we're able to support our key customers. One of
the motto's that we've got is
"We're an essential
business that is in the business
of supporting other essential businesses."
Critical infrastructure, focusing on that to make sure
that if for some reason we lose a logistics channel
in the country that we've got components
there so that the support infrastructure stays in place
so we're able to keep our customers up and running.
>> So I wonder if you could talk a little bit
about some of the assumptions that your making.
We have a saying sometimes hope for the best plan
for the worst. In your business that's probably apropos.
What are some of the assumptions your making just
in terms of you know planning for the worst.
>> We're doing, early on it was all about making sure
that you could get blind side on supply
and making sure that we've got capacity available.
We did a lot of work on making sure
that our alternate site across the globes were able
to absorb what we couldn't get out
of our China suppliers for the time being
when we got the constraints there.
But at the same time we are now recognizing
as the COVID expands, the COVID,
excuse me the incident that we're in now,
that there may be some demand delay
or demand destruction in the future.
So what is our risk profile in relation to that?
So that's something we're doing as well
but right now we're more focused on what's it going to take
to make sure we've got supply available
to customers that need supplying now?
>> So what are the, I mean I'm sure you've got a lot
of KPI's but if you had to really focus in on the top ones,
the two or three that your really focused
on you know you look at every morning when you wake up.
Where's your focus in terms of KPI's?
>> Right now its, we're in a different environment
than we were in let's say three months ago.
And right now it's product availability.
And that's in responsiveness to customer needs.
In a normal environment I'd say its cost, quality
and delivery, that's a typical supply chain mantra.
The three legs of the stool.
But right now certainly we're not minimizing the
of having to have excellent quality but
what we're really focused
on now is making sure we are providing product
into critical infrastructure, essential customer sites,
so it's all about availability.
I'd say the majority of my day is focusing on
what do we need to do to make sure we got product available
for the market place.
>> Well Mike, we're seeing you
know the people around the world,
not only in United States
but globally respond to this crisis
we're all doing our own part.
Clearly your, I assume before you we're waking up
that assumes you we're sleeping
but I know your not getting much sleep
but I want to thank you for coming on and sharing
with is some of the things that are going on with PURE.
You know keep up the great work,
your customers need this,
I mean storage is part of critical infrastructure
and really appreciate all the effort.
Thanks to you and all the team at PURE.
>> Well thank you Dave, I appreciate it, have a great day.
>> You too, it's great to have you.
Thank you everybody for watching.
We'll keep broadcasting here daily from the CUBE studios,
this is Dave Vellante.
This CUBE conversation we'll see ya.
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