Despite price increase, Everpure CEO confident of leading storage market share

“I guarantee you that by the end of this year we will ship more flash than all of our competitors combined, assuming we can get it, which we can,” said Charles Giancarlo

Everpure, formerly Pure Storage, reached its first $1bn quarter this year, even as the storage and datacentre vendor faces global supply chain constraints and chip shortages.

Those pressures prompted the company to raise prices, with CEO Charles Giancarlo explaining how the issue has affected the business.

At the Pure Accelerate summit in Las Vegas, Giancarlo again addressed the issue, telling partners and customers why the increase was necessary and why he does not expect the problem to ease soon.

Despite those challenges, Giancarlo said he remains confident Everpure can meet customer demand for flash this year.

“The interesting thing is as of last quarter, we now ship more flash than any other competitor,” Giancarlo said during both his summit keynote and his keynote to partners.

“I guarantee you that by the end of this year we will ship more flash than all of our competitors combined, assuming we can get it, which we can.”

During a media session at the summit, Giancarlo said he sympathises with customers because the issue goes beyond higher prices.

Customers, he said, also lack a clear basis for judging whether they are getting a good deal.

“First of all, we live in an industry that generally deflates. In other words, pricing goes down over time. That’s been true for decades.

“And now, all of a sudden, not only is pricing going up, but it’s going up by an incredible amount. And now the customer doesn’t really have a basis upon which to know if they individually are getting a good price or not.

“I have a lot of sympathy for customers overall. But this is a worldwide phenomenon. It’s not just ours,” he said.

Giancarlo said the impact extends beyond data storage to every semiconductor component, whether it is a 10-cent part or a $10k part.

Because semiconductor manufacturing is a fixed-cost business, he said it takes years and billions of dollars to build a fab and bring it online.

“They don’t come online at the flick of a switch or at the snap of your fingers,” he added.

“When the demand far outstrips the total capacity of semiconductor fabs, where it’s going to take years to catch up to that demand, pricing just skyrockets.

“The fab capacity has also shifted towards the AI environment, taking capacity out of even the cheapest components. It’s a world we’re all going to live in,”

Giancarlo added that the situation has also revived the hybrid market, which combines hard disk drives and flash.

“That has a new lease on life for a period of time. That’s probably been the major change. But outside of that, it’s affected the entire world.”

Asked about accusations of profiteering from the situation, Giancarlo said Everpure is sharing the pain as well.

“We have a proof point. And the proof point was we indicated in our fourth-quarter call that we were going to operate at the lower end of our gross margin range, and we did. Clearly, that was a decision that we made,” he explained.

“That tells you whether or not we’re profiteering on this. If your gross margins go up, we’re effectively a middleman for semiconductors.

He said the company has a substantial software offering, but its hardware business is being hit hard by surging semiconductor costs, which have risen by around six to eight times over the past six months.

The CEO described the increase as “breathtaking”, noting that the company’s own price rises have been far more modest.

As a result, gross margins have come under pressure.

While it has tracked competitors’ pricing moves, those rivals have raised prices earlier and more aggressively, which is why Giancarlo argued the company is not profiteering, pointing to its financial results as evidence.

This article originally appeared on CRN UK sister website CRN Asia.