Pure Storage may be experiencing growing pains in the UK, according to industry chatter, as the larger rivals whose lunch it has been stealing strike back.
CRN has heard rumours the noisy flash start-up missed its UK revenue goal by a distance in Q1, with one source hearing sales reached $1m (£642,000), and another saying $1.25m, for the three months ending 30 April 2015 – against a target one source said was $3.53m for the UK.
In addition, multiple sources in the storage channel have heard the majority of Pure's local staff missed their quarterly targets in the first three months of its fiscal year.
The US-based vendor said it would not comment on its sales performance but that it will share details of its financial performance at the end of its financial year.
Founded in 2009, Pure has caused a stir in the flash market since it burst onto the scene, bagging a total of $470m in capital, following $225m in a late-stage funding round last April, leading it to be valued at over $3bn. The privately held firm claimed it grew at more than 300 per cent in its fiscal year ending January 2015 and has pitted itself against the likes of EMC and HP.
But the firm's UK business hit a rut in Q1, according to one onlooker.
"I think [the fall in sales] is from a combination of things," they said.
"There are a lot more players in the market, and customers are going to say to EMC, HP, Pure and Violin Memory, you all do the same thing, you are good enough, so now it comes down to economics, viability and relationships. EMC and HP – particularly HP – are becoming very aggressive on pricing, and Pure has a very high cost of sales and marketing they have to maintain."
One source said he felt Pure has done "immensely well" in the US and "OK" last year in EMEA, but flagging UK Q1 results were perhaps a reflection of the nascent vendor spreading itself too quickly across the globe.
"They [Pure] have hired a team in Africa, a team in Dubai, they have hired teams everywhere, and it's a massive investment. To pay for that investment you need to keep your margins up, and to keep your margins up [it] means you are not going to be price competitive when EMC, IBM and HP are coming after you. I think the reason they have missed their targets in Q1 was purely the competition said they were going to take that business," the source said.
One source said the EMEA target for Q1 was $12.87m and the storage vendor hit between 40 and 45 per cent of this.
Clive Longbottom, founder of industry analyst Quocirca, said he was not surprised to hear Pure Storage may be missing its targets.
"The market is maturing and it's no longer just the case of 'we do flash storage'. They [Pure] are not only competing at a more complex level with those they expect to compete with – those who are around the same size. But now they have the incumbents – the big guys – and that has hit them. It's tough, and it's not that they have any technology weaknesses, but the market is going at a speed which is difficult for anyone to keep up with," he said.
"The likes of HP and Dell are essentially saying 'we have to buy market share' and so any price you get from these smaller guys, they'll meet it."
When approached for a statement on the matter, a representative from Pure said "Pure is a private company, they cannot share specific numbers".
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