>> Narrator: Live from the Bill Graham Auditorium
in San Francisco,
it's theCUBE,
covering Pure Storage Accelerate, 2018,
brought to you by Pure Storage.
>> Welcome back to theCUBE's coverage of Pure Storage
Accelerate 2018.
I'm Lisa Martin.
Been here all day with Dave Vellante.
We're joined by David Floyer now.
Guys, really interesting, very informative day.
We got to talk to a lot of puritans,
but also a breadth of customers,
from Mercedes Formula One,
to Simpson Strong-Tie
to UCLA's School of Medicine.
Lot of impact that data is making
in a diverse set of industries.
Dave, you've been sitting here, with me, all day.
What are some of the key takeaways
that you have from today?
>> Well, Pure's winning in the marketplace.
I mean, Pure said, "We're not going to bump along.
"We're going to go for it.
"We're going to drive growth.
"We don't care if we lose money, early on."
They bet that the street would reward that model, it has.
Kind of a little mini Amazon, version of Amazon model.
Grow, grow, grow, worry about profits down the road.
They're eking out a slight, little positive free cashflow,
on a non-gap basis, so that's good.
And they were first with All-Flash,
really kind of early on.
They kind of won that game.
You heard David, today.
The NVMe, the first with NVMe.
No uplifts on pricing for NVMe.
So everybody's going to follow that.
They can do the Evergreen model.
The can do these things and claim these things
as we were first.
Of course, we know, David Floyer,
you were first to make the call, back in 2008,
(laughs)
on Flash and the All-Flash data center,
but Pure was right there with you.
So they're winning in that respect.
Their ecosystem is growing.
But, you know, storage companies never really have
this massive ecosystem that follow them.
They really have to do integration.
So that's, that's a good thing.
So, you know, we're watching growth,
we're watching continued execution.
It seems like they are betting that their product portfolio,
their platform, can serve a lot of different workloads.
And it's going to be interesting to see
if they can get to two billion, the kind of,
the next milestone.
They hit a billion.
Can they get to two billion with the existing sort of
product portfolio and roadmap,
or do they have to do M&A?
>> David: You're right.
>> That's one thing to watch.
The other is, can Pure remain independent?
David, you know well, we used to have this conversation,
all the time, with the likes of David Scott, at 3PAR,
and the guys at Compellent, Phil Soran and company.
They weren't able, Frank Slootman at Data Domain,
they weren't able to stay independent.
They got taken out.
They weren't pricey enough for the market not to buy them.
They got bought out.
You know, Pure, five billion dollar market cap,
that's kind of rich for somebody to absorb.
So it was kind of like NetApp.
NetApp got too expensive to get acquired.
So, can they achieve that next milestone, two billion.
Can they get to five billion.
The big difference--
>> Or is there any hiccup, on the way, which will--
>> Yeah, right, exactly.
Well the other thing, too, is that, you know,
NetApp's market was growing,
pretty substantially, at the time,
even though they got hit in the dot-com boom.
The overall market for Pure isn't really growing.
So they have to gain share in order to get to that
two billion, three billion, five billion dollar mark.
>> If you break the market into the flash and non flash,
then they're in the much better half of the market.
That one is still growing, from that perspective.
>> Well, I kind of like to look at
the service end piece of it.
I mean, they use this term, by Gartner, today,
the something, accelerated,
it's a new Gartner term, in 2018--
>> Shared Accelerated Storage
>> Shared Accelerated Storage.
Gartner finally came up with a category
that we called service end.
I've been joking all day.
Gartner has a better V.P. of naming than we do.
(chuckles)
We're looking' at service end.
I mean, I started, first talking about it, in 2009,
thanks to your guidance.
But that chart that you have that shows the
sort of service end, which is essentially Pure, right?
It's the, it's not--
>> Yes. It's a little more software than Pure is.
But Pure is an awful lot of software, yes.
And showing it growing,
at the expense of the other segments,
you know.
>> David: Particularly sad.
>> Particularly sad. Very particularly sad.
>> So they're really well positioned, from that standpoint.
And, you know, the other thing, Lisa,
that was really interesting, we heard from customers today,
that they switched for simplicity.
Okay, not a surprise.
But they were relatively unhappy
with some of their existing suppliers.
>> Right.
>> They got kind of crummy service
from some of their existing suppliers.
>> Right.
>> Now these are, maybe, smaller companies.
One customer called out SimpliVity, specifically.
He said, "I loved 'em when they were an independent company,
"now they're part of HPE, meh,
"I don't get service like the way I used to."
So, that's a sort of a warning sign and a concern.
Maybe their, you know,
HPE's prioritizing the bigger customers,
maybe the more profitable customers,
but that can come back to bite you.
>> Lisa: Right.
>> So Pure, the point is, Pure has the luxury
of being able to lose money,
service, like crazy, those customers
that might not be as profitable,
and grow from it's position of a smaller company, on up.
>> Yeah, besides the Evergreen model and the simplicity
being, resoundingly, drivers and benefits,
that customers across, you know, from
Formula One to medical schools, are having,
you're right.
The independence that Pure has currently
is a selling factor for them.
And it's also probably a big factor in retention.
I mean, they've got a Net Promoter Score of over 83,
which is extremely high. >> It's fantastic, isn't it?
I think there would be VMI, that I know of,
has even higher one,
but it's a very, very high score.
>> It's very high.
They added 300 new customers, last quarter alone,
bringing their global customer count to over 4800.
And that was a resounding benefit that we were hearing.
They, no matter how small, if it's Mercedes Formula One
or the Department of Revenue in Mississippi,
they all feel important.
They feel like they're supported.
And that's really key for driving something
like a Net Promoter Score.
>> Pure had definitely benefited from,
it's taken share from EMC.
It did early on with VMAX and Symmetrix and VNX.
We've seen Dell EMC storage business, you know, decline.
It probably has hit bottom, maybe it starts to grow again.
When it starts to grow again, I think, even last quarter,
it's growth, in dollars, was probably the size of Pure.
(chuckles)
You know, so, but Pure has definitely benefited
from stealing share.
The flip side of all this, is when you talk to
you know, the CxOs, the big customers,
they're doing these big digital transformations.
They're not buying products, you know,
they're buying transformations.
They're buying sets of services.
They're buying relationships, and big companies
like Dell and IBM and HPE, who have large services arms,
can vie for certain business that Pure, necessarily, can't.
So, they've got the advantage of being smaller, nimbler,
best of breed product, but they don't have
this huge portfolio of capabilities
that gives them a seat at the CxO table.
And you saw that, today.
Charlie Giancarlo, his talk, he's a techie.
The guys here, Kicks, Hat, they're techies.
They're hardcore storage guys.
They love storage.
It reminds me of the early days of EMC, you know, it's--
>> David: Or NetApp. Yeah.
Yeah, or NetApp, right.
They're really focused on that.
So there's plenty of market for them, right now.
But I wonder, David, if you could talk about,
sort of architecturally, people used to criticize
the two controller, you know, approach.
It obviously seems to be doing very well.
People take shots at their, the Evergreen model,
saying "Oh, we can do that too."
But, again, Pure was first.
Architecturally, what's your assessment of Pure?
>> So, the Evergreen, I think, is excellent.
They've gone about that, well.
I think, from a straighforward architecture,
they kept it very simple.
They made a couple of slightly, odd decisions.
They went with their own NAND chips,
putting them into their own stuff,
which made them much smaller, much more compact,
completely in charge of the storage stack.
And that was a very important choice they made,
and it's come out well for them.
I have a feeling.
My own view is that M.2 is actually going to be
the form factor of the future, not the SSD.
The Ssd just fitted into a hard disk slot.
That was it's only benefit.
So, when that comes along,
and the NAND vendors want to increase the value
that they get from these stacks, etc.,
I'm a little bit nervous about that.
But, having said that, they can convert back.
>> Yeah, I mean, that seems like something
they could respond to, right?
>> Yeah, absolutely.
>> I was at the Micron financial analysts' meeting,
this week.
And a lot of people were expecting that, you know,
the memory business has always been very cyclical,
it's like the disk drive business.
But, it looks like,
because of the huge capital expenses required,
it looks like supply,
looks like they've got a good handle on supply.
Micron made a good strong case to the street that,
you know, the pricing is probably going to stay
pretty favorable for them.
So, I don't know what your thoughts are on that,
but that could be a little bit of a head wind
for some of the systems suppliers.
>> I take that with a pinch of salt.
They always want to have the market saying
it's not going to go down.
>> Of course, yeah.
And then it crashes.
(chuckles)
>> The normal market place is, for any of that,
is go through this series of S-curves,
as you reach a certain point of volume,
and 3D NAND has reached that point, that it will go down,
inevitably, and then cue comes in,and then that there
will go down, again, through that curve.
So, I don't see the marketplace changes.
I also think that there's plenty of room
in the marketplace for enterprise,
because the biggest majority of NAND production
is for consumer, 80% goes to consumer.
So there's plenty of space, in the marketplace,
for enterprise to grow.
>> But clearly, the prices have not come down
as fast as expected because of supply constraints
And the way in which companies like Pure
have competed with spinning disks,
go through excellent data reduction algorithms, right?
>> Yes.
>> So, at one point, you had predicted
there would be a crossover between the cost
per bit of flash and spinning disk.
Has that crossover occurred, or--
>> Well, I added in the concept of sharing.
>> Raw.
>> Yeah, raw.
But, added in the cost of sharing,
the cost-benefit of sharing,
and one of the things that really impresses me
is their focus on sharing,
which is to be able to share that data,
for multiple workloads, in one place.
And that's excellent technology, they have.
And they're extending that from snapshots
to cloud snaps, as well.
>> Right.
>> And I understand that benefit,
but from a pure cost per bit standpoint,
the crossover hasn't occurred?
>> Oh no.
No, they're never going to.
I don't think they'll ever get to that.
The second that happens,
disks will just disappear, completely.
>> Gosh, guys, I wish we had more time to wrap things up,
but thanks, so much, Dave, for joining me all day--
>> Pleasure, Lisa.
>> And sporting The Who to my Prince symbol.
>> Awesome.
>> David, thanks for joining us in the wrap.
We appreciate you watching theCUBE,
from Pure Storage Accelerate, 2018.
I'm Lisa Martin, for Dave and David,
thanks for watching.