Pure Storage has used its entrance into the top 10 storage vendors list by revenue as an excuse to slate its rivals and talk up its position in the market.
In a blog post published last night, chief executive Scott Dietzen (pictured above) claimed that his firm has entered the top 10 storage vendors in terms of revenue in IDC's latest global enterprise storage market. He claims the company will enter the top five "before long".
"Pure, for our part, in just four years of selling, achieved a 2.2 per cent market share and clocked in at 96.7 per cent year-on-year growth, with a $119m (£81m) quarter," said Dietzen. "To put that in perspective, EMC and NetApp both saw declines of more than 10 per cent, and HPE was the only of the large vendors which grew at all, albeit at less than five per cent.
"In a world where some of our legacy storage competitors have been touting their all-flash array (AFA) gains, the inconvenient truth is that those AFA gains aren't offsetting their dramatic loss in overall storage market revenues, and in fact much of their AFA progress is a result of share-shifting deals from disk to flash."
Despite its rapid sales growth in the four years it has been selling its AFA products, Pure has yet to turn a profit. For the three months to 30 April, its sales rocketed 90 per cent to $139.9m, but it made a net loss of $49.1m, down from $63.8m the year before.
Dietzen insisted that the fact it is loss-making does not paint an accurate picture of its financial stability.
"Pure's business is on sound financial footing," he said. "Pure has more than $600m in the bank and zero debt as of Q1 end, was cashflow positive in Q4 of last year, and expects to be sustained cashflow positive in the second half of 2017.
"We have all the money we need achieve profitability – with a several-$100m cushion I might add – and the only reason we are not already there has been choosing to invest for growth.
"As an aside, it is ironic that EMC is the vendor that we see most consistently challenging Pure's finances, given Dell-EMC will soon take on $50bn in debt. That's substantial leverage by any measure."
Flash storage has become a hot topic among storage vendors in recent years. NetApp recently began talking up its position in the space after completing its acquisition of SolidFire, and EMC declared 2016 "the year of flash". Pure, which has been offering AFA products in the channel since it launched in 2013, said other vendors' interest in flash is not always what it seems.
"Part of the reason the legacy vendors are eager to tout AFA share growth is because, according to IDC, their overall businesses are shrinking. HPE is gaining, but at an anaemic five per cent per year they are growing 20 times more slowly than Pure," said Dietzen.
"This gets to one of the tactics that legacy vendors have used to create the illusion of success in the AFA space: aggressive bundling, maintenance forgiveness, and other programmes that essentially transition disk customers to flash during refreshes. Pure, of course, enjoys none of these advantages, and all our growth comes from selling a high-value product to customers who make the choice to purchase it. So if a legacy vendor is succeeding in shipping some AFAs to their installed base, but that installed base itself is massively shrinking, can you call that growing?"
Howard Hall (pictured), managing director of HP partner DTP Group, told CRN that he comes up against Pure "very rarely" and said HPE is becoming more – not less – competitive in storage.
"We're in really good shape. We're growing our storage business and it's not just replacing disk with flash – it is knocking out EMC and NetApp typically," he told CRN. "HP are becoming very aggressive and very receptive [to the market]. They have mobilised extremely quickly and are getting stuff done."
Hall cited HPE's new Hyper Converged 380 product as an example of the vendor's speed since HP split in two in November.
"They went from inception to launch in five months to address Nutanix," he said. "We've never heard of HP doing that before – it would have taken two years. If you listen to Meg Whitman, she just talks about speed and the pace of change. We're taking competitors out at present and that's down to building the business case for transformation, not just down to fighting it out on price. It's about the quality of the kit."
Another channel partner, who wanted to remain anonymous because their firm works with Pure and a number of other rival storage vendors, claimed that Pure's message is resonating well with customers.
"I think Pure will do quite well," they said. "They're investing a lot in R&D, so the numbers are not good. But they do invest, I know that. I think they would be likely to acquire one or two companies in the near future because they do have some cash. That could give them a stronger position in the market. Their numbers are going in the right direction."
DTP's Hall agreed that acquisitions could be on the cards for Pure, but said he believes it could be a target instead.
"They've sneaked into the top 10 but it doesn't necessarily make them a very big player," he said. "My opinion is you'll find those guys will be acquired. The smaller vendors tend to have a grow-to-sell mentality."
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