>> Announcer: Live from San Francisco, it's theCUBE. Covering Pure Accelerate 2017. Brought to you by Pure Storage. >> Welcome back to Pure Accelerate. We're here at Pier 70 in San Francisco, and this is theCUBE, the leader in live tech coverage. I'm Dave Vellante with my co-host David Floyer. Matt Kixmoeller is here, he's the Vice President of Product and Solutions at Pure Storage. Kix, welcome to theCUBE. >> Thanks for having me. My first time on theCUBe, I'm honored. >> That's awesome, well, we're honored to have you. Got to have a nickname on theCUBE. We had Dietz on earlier, Stu had to leave. You can call me V, if you want. You really don't have a nickname; we call him Floyer. (laughter) >> All right. >> So anyway, great job today on stage. You got a really engaged audience. You guys have a lot of fun. The orange shoes are cool. How do you feel? >> I feel great. You know, as we said today, this is the biggest year we've ever had in innovation at Pure, and it was fun to really take the focus back to software this release. You know, we spent the last year bringing out our next-gen cloud era all flash platforms, between FlashBlade and FlashArrayX, and this was an opportunity to really flex our muscles around software, flex our muscles around IoT and AI and that as well. So, it was a fun set of releases. >> Well, it's been interesting to sort of watch you guys and watch your product strategy evolve. And of course, coincident to that is your TAM expands. All right, so it started in the sort of you know, lower end of the spectrum, and then it went into the 20s and now it's in the 30s, and I was saying to David it used to be, well I buy EMC for block and I buy NetApp for file, and you guys are challenging that convention. >> Matt: Yeah. >> Maybe talk a little bit about your strategy and how your penetrating now new markets. >> Yeah, we think about our market opportunity in three buckets. So first off, we go after the top 500 cloud providers, and we see one of our biggest segments is really cloud providers and we see them increasingly not really looking at legacy options for storage. You know, they want a modern storage fabric, and part of why we're so excited in particular about the work we've done around NVMe is we feel like it helps us go after some of the more server DAS-centric workloads of the past, or of the next gen workloads, and we can talk a little bit more about that. A second key area that we're focusing on is really going after next generation data-driven applications, and AI, ML, all these areas are really driving amazing storage growth. It's even, I think, surprised us how quickly it's come up, and you had folks on theCUBE earlier today talking about FlashBlade, but one of the threads that units a lot of the next gen applications is they're designed to be scale-out and they're designed to really need a lot of parallelism from storage. And so what we're doing with FlashBlade is really designing a storage platform that's kind of parallel from the start, and can deliver that massive concurrency that you just can't get from a lot of legacy providers. And then yeah, I think the third thing we're obviously excited about is going in and ripping out the spinning rust of the past. We've made a lot of innuendos at this conference and how we're in this classic rusting building and maybe it's a nice metaphor for some of that-- >> Tear it down! (laughs) >> But yeah. But we are we're helping liberate the rest of the world, and I think one of the things that we're excited about today was to announce Purity Active Cluster. That's been that top of the reliability hill feature when people want metroclustered applications, active-active in two data centers, that's about as reliable as it gets, and that was a feature that we didn't have in FlashArray until now, and so we're excited to have that final area to go in and help liberate. >> Yeah, so it's not just the disk spinning rust replacement, it's, you talked this morning about SRDF, I remember well in the early 1990s when SRDF came out, it was game changing and it obviously has driven a lot of revenue for EMC, now Dell EMC, it helped a lot of customers, but there's no question it was the mother of all complexity and cost. So talk a little bit more about how you guys are going to approach that problem. >> Yeah, I mean, I think if you look at a lot of what we announced today, there continues to be a thread of simplicity throughout everything. You know, it's fun, I was employee number six up here, I've been in on the adventure from day one, right, and we always had a fundamental belief in simplicity. But as we started to shift products and started to get customer feedback, there was like this lightning rod within our team all throughout engineering where people really understood the power of simplicity. And it went from a belief to a religion, I would almost say. And we've just always tried to do that with new feature we come out with, and this felt like an area where there was such a vacuum of simplicity that there was a huge opportunity to rethink things. And so, with this feature it's totally built in, it's totally integrated, you could easily just stretch a volume across now two sites. And one of the problems we went to go solve was the third site mediator problem where you always need a third site witness in a stretch cluster to determine if there is a failure, who's the surviving side that you want to have actually process the application IO. And so we're delivering that as a service, as a SaaS service from our Pure One infrastructure, so it's just one more way that we take one more step and one more pain of the infrastructure away. >> So I'd like to drill in a little bit on the NVMe side of this. >> Matt: All right. >> We've done some research on the architecture which we think is coming up, which we're calling unigrip because it allows this very even access to data at very low latencies across there. And really, we'll start in our view, a different sort of applications, really very very different where you can combine legacy state applications with the AI applications and other things like that. How are you going to bring that to market? Who are you selling that to? >> Yeah, I mean, we're super excited about this transition, NVMe and we're trying to take a real leadership role here. And so much of it reminds us actually of the early days of Pure. When we started Pure, flash was expensive, it was exotic, you had a bunch of people trying to make it this 1% technology, and our whole idea was look, let's not make it a Ferrari, let's democratize it for all and we think everybody deserves flash. And we did a bunch of work to try to mainstream it. And we're trying to take a very similar approach with NVMe, where a lot of the early folks who approached NVMe built very specialized appliances, did exotic things. And our view is it should be mainstream. All flash arrays should be built on NVMe. And the real advantage is something you hinted at. It's just massively parallel. And so here you have flash, this inherently parallel medium on its own and we're talking through it through these legacy SCSI protocols that have been around forever. NVMe is a huge opportunity to open that up. But we had an initial insight, I believe, where when we approached this we didn't just say look, we should get an NVMe SSD. We realized that that whole architecture has to be optimized from software to hardware, and so we forgoed or forwent the SSD form factor. We built our own direct flash module, and the real magic of how we've approached this is not only shipping a device that's massively parallel, but building a bunch of software within Purity that knows how to take advantage of that, and brings all the flash management up to the software tier, so we can kind of take advantage of it end to end. And so, these are things we just don't see our competitors in the market doing right now. Maybe one more comment on your parallelism. I mean, I think you're right in that if you look at a wide range of next generation web-scale applications, whether they be more classic NoSQL databases on through analytics, on through to AI and ML. AI and ML are kind of maybe the most extreme examples, but they're all far more parallel scale out applications than we were used to before. And so they thrive in environments where you have storage that can marry that model. And what we're finding in particular in the AI world is that we're not up against other storage vendors. I mean, the alternative really is to go get a bunch of white-box DAS and build your own storage layer and maybe use some open source stuff, but that's cumbersome and that has all the issues that everyone's aware of, right? So we believe that as a commercialized product we have something pretty unique to offer these markets and it's been exciting to see it even push us. One of the things I think we surprised people with today was making FlashBlade 5x bigger. You know, we announced it last year, people thought it was pretty big and pretty fast to begin with, but it was these use cases and the early adopters that pushed us to make it larger. We saw people in the early adopter phase of FlashBlade buy in and deploy at much bigger scale than we were expecting. We were kind of used to our experience with FlashArray where people sort of started small, they got to use the technology, then they kind of grew. But I guess you don't do big data on a small scale. (Laughter) So people dived in. >> So I want to ask you about this whole big data, because it's probably the first time we've even used that term today. It's amazing how fast that came and went, even though big data's now mainstream. But, and you said, you made the point, Matt, that not a lot of storage competitors are going after that. Well, you'd think big data, storage, they would fit. But I think a lot of the competitors realized well, there's not a lot of money to be made there. And now it's just hitting its best stride. Here's my question. If you look at Hortonworks and Cloudera in particular, you're starting to see the cloud guys, Amazon with its data pipeline, certainly Google and Microsoft, are picking up a lot of action in the cloud with a full as-is service of the data pipeline. What do you see, and it's affecting some of the on-prem activity, what are you seeing with regard to cloud versus on-prem, and how does that affect your business? >> Yeah, I think you're right in the sense that if you looked at how you could have deployed big data technologies before, I think that there are basically two ways to do it. People that did it in the cloud, or they did it on-prem with white-box DAS, and they've got servers and put disks inside. So much of the first generation of big data was basically driven on Hadoop, which fairly low-cost and fairly focused at streaming workloads where you had this, frankly not much performance profile or need for performance on disk, and so what we found in the early days was, hey if you tried to put flash underneath it, didn't help that much. >> Dave: Didn't do much for it, right. But the thing that's changing now is people want to move away from those slow batch queries to much more interactive analysis, much more real time, and so Hadoop's given way to Spark, and so that's changed that discussion quite a bit. Back to the discussion though, around on-prem versus the cloud, I think this is an area where as people get more and more invested in their data, they're understanding it's a key control point. And so if I get all my data into one cloud provider, it's pretty hard to get it out of there. This is core to my business. Do I want that level of lock-in? Also, can I do better with my own dedicated solutions? And what we've found is that when we can bring FlashBlade to bear these big data workloads, we can outperform what people can do in the cloud handily, at a lower cost. And so there's a proclivity to want to own your own destiny, own your own infrastructure, and the ability for us to deliver a higher performance for a lower cost in the cloud we think is a pretty good connection. >> And of course, complexity is hurt, it isn't hurt, I mean, the market's growing very nicely, but it's actually hurt a lot of the practitioners' ability to absorb technology. I suppose Pure and its insane focus on simplicity helps a little bit, as does Spark, sort of simplify the whole Hadoop thing, but you've still got, you need a lot of smart people to make this stuff work. So it's going to be interesting to see, but what I'm hearing from you is you don't have a lot of storage competitors going hard after this. And so the guys that have done really well with Hadoop that have on-prem infrastructure you would think would be picking this up quite rapidly. Well, and look, we're having discussions with all of the Hadoop providers as well, because if we can help them deliver a higher customer satisfaction and a better outcome, it's upside for them as well. They don't want to be storage companies. >> Well, they need help, I mean the irony is that Cloudera is in the cloud era, and the cloud is eating away at its base, so they need somebody who's going to help them simplify, I mean, they're a software company, help us simplify the on-prem infrastructure. >> One of the things you said earlier that I think has been an additional learning for us, and FlashBlade as well, when we went into the FlashBlade experience, we kind of expected that people would buy and all they would care about is performance. And so we asked ourselves, well how much does this user base really care about simplicity? We found the total opposite to be true. Most of who we're selling FlashBlade to are not IT folk. They're data scientists, they're engineers, they're creatives, they're a line of business people. And they want nothing to do with managing infrastructure. And so the simplicity, oftentimes we're replacing what would have been racks and racks of disk that they didn't want to deal with to begin with. And so the simplicity value prop, shockingly, is actually more important, we're finding, for FlashBlade even than FlashArray. >> Makes a lot of, we have a saying in theCUBE that data is the new development kit. 'Cause it's like you say, it's data engineers, it's data science, even application developers are starting with the data, and so, and complexity has choked that whole industry, and so that's excellent. Okay, are you? >> Oh yeah, I was going to ask. One of the things you were saying very clearly here is that the drive of getting data up to the cloud to do this AI, or up to anywhere to do the processing, to create the models, is going to have to be ameliorated by reduction of that data. By reduction, I mean turning that data into informational tags or whatever it is as it's going up the line, very close to where the data is. >> Dave: I call it the needles in the hay stack. >> Yeah, extract the needles very early on. So can you talk a little bit more about what your vision is there, how are you going to do that, who are you partnering with to do that? >> Yeah, so I think that you hit on a very important problem, and I think everybody is starting to finally internalize how much faster devices and machines can generate data than humans. (Laughter) And so we're used to this human era of cognition of data creation, but this asymptote is happening. And, you know, I think it's becoming quite obvious that basically machines have the potential to generate data much faster than it can be stored, used, and especially sent back to the cloud. And so you need some level of local processing to analyze it, to send back more, you know, kind of per that metadata. The other challenge is that many of the use cases that people want to use at the edge are latency sensitive, and so you can't take the time to think about it, send it all back, think about it, send it back again-- >> Dave: Ogle it. >> And do some realtime control thing, right? My favorite anecdote that proves this is some of Amazon's infrastructure, where they build out dedicated data centers within their distribution facilities because they need to be able to realtime analyze the video feeds of everything that's going on, make decisions, right? And so if they can't send all the data to their cloud, they have to build they're own data center-- >> Dave: Nobody can! >> Inside there. (laughter) And so it's just indicative of a broader solution there, right? You'll see a demo that we're going to be doing tomorrow where we're doing a great coprocessing app where we're kind of collecting a bunch of data here at the show, analyzing it, and then sending part of it up to the cloud and partnering with Google to analyze it there, and showcasing an example use case of this. And so we think it's an area that's going to be important. Part of that also brings us to what we've done with our Purity run. So one of the things we've announced today was opening up our Purity platform to third party code, to developers. And we see a number of use cases for this. Many of our cloud customers have asked for this, where they want to kind of tie the storage more directly into their application, but the other use case we see is the edge. Where, if we can deploy a local Pure device on your oil rig, in your plane, in your factory, whatever, and have that processing capability happen there, and then to have that summarize the data and be able to send it back, that provides more of an all-in-one solution for that. And so, you know, we don't have dedicated products in this space yet, but this is our way of opening up the platform to be able to see how people develop on that how how they can start taking advantage of that. >> Okay so, we got to wrap, but you were telling us you were employee number six-- >> Matt: Yep! >> So that's quite a ride. I mean, so many companies just don't get to reach escape velocity, to use that term. You guys did. What's next for you, where do you want to take this thing? >> Yeah, I think we're all extraordinarily excited here at Pure. I mean, so much of this first generation of Pure's growth has been reshaping the existing storage environment. And, you know, we feel like we're through that mission. Yes, okay, only 20% or so of enterprise storage is flash, but the writing's on the wall, we're delivering the products. That is momentum now, right? >> Dave: Right. >> And so so much of our next generation of innovation is going after these new data-driven use cases, helping cloud providers, just going after what's next. And that opens up a much broader definition of what you can be as a data company. You know, we kind of stopped referring to ourselves as a storage company, we're going to have to get storage out of the name at some point, but you know, going after the broader problems around data is a much more exciting mission that we think powers the next decade, so, lots to do. >> Great, right, Kix, thanks very much for coming to theCUBE. >> Matt: Thank you guys! >> It's great to have you. >> Floyer: Thank you. >> Matt: Appreciate it. All right, keep right there, buddy, we'll be back to wrap up right after this short break. This is theCUBE, we're live from Pure Accelerate 2017. Right back. (upbeat electronic melody)

>> Announcer: Live from San Francisco, It's The Cube. Covering Pure Accelerate 2017. Brought to you by Pure Storage. >> Welcome back to Pier 70 in San Francisco, everybody. This is The Cube, the leader in live tech coverage. I'm Dave Vellante with Stu Miniman. Scott Dietzen is here, the CEO of Pure Storage, hot off the keynote. Scott, great to see you. >> Great to be back on The Cube. >> So I love the nickname. I grew up in a town where everybody had a nickname. We got Dietz, we got Hat, we got Danzig, we got Kicks, I dunno. You can call me V. He's, I guess, just S-tu. >> V works. >> I mean, that's it, you know. So, again, great show here, I love the venue. How'd you guys pick this place? >> So I can't say I was involved in the choice and this place has a really illustrious history. I mean, it goes back to the 1800's. And actually they manufactured steel here during World War II. I think they were turning out two battleships a week. But another piece of history that maybe isn't as nice is this is the last time this venue's going to be used. So it is scheduled to be brought down to make way for new condos I guess. So we really wanted to celebrate the venue and its history. It's just a great industrial feel to it. >> And they're tearing down a bunch, the new Warriors facility is going to be in Dogpatch, right? >> Yes, and so, yeah, we can't feel too bad about it because we are indeed celebrating the Warriors success. >> You needed a bigger house for all those trophies. (Scott laughs) >> I think they're poised to have a really good run. But I think Cleveland's going to be there contending with them for the next several years to come and it's really exciting. >> Well, hopefully my Celtics will get there in the next four or five years with some draft picks. So, I want to talk about sort of the ascendancy of Pure. When we first met you, you had a pretty simple message. It was like, look, we think we can deliver way better performance for lower cost. I mean, boom. It wasn't the same cost. I remember you were very forced. I said, "About the same, right?" You said, "No, no, lower. "We have the best data reduction technology "in the business." I remember talking to you at Oracle OpenWorld about that. >> Yep. >> And that's fundamentally what happened. And you attacked the legacy and stall base. And you won that game. But you're not resting on that, you've got to take it now to a next level. Talk about that next level. Well, talk about where you came from and then the next level of data and beyond just sort of public cloud. >> You guys have talked about this too, right. If you look at the curb of Moore's law. I mean, mechanical disk doesn't follow Moore's law. And so the cost reduction curbs, we did the math and we said, look, we're going to be able to drive down the cost of storage. We're going to be able to drive up the density and power cooling space. Simplicititly you can dramatically reduce the cost of storage. But Flash is going to help us, right? You know, we've gotten to the point where Flash is, you know, even with a tighter component market, it's cheaper to buy raw than fast disks. And way cheaper to deploy. World Bank talked about saving millions of dollars by deploying Pure Storage and getting a 5x performance boost at the same time. So if we can help customers pay for their storage both in terms of cost savings as well as new business value, that's a great outcome. >> Wikibon's been on the right side of that prediction since early on. >> That's very true, I've used your data. >> We're very aggressive about that. But the thing that excited us most was the second thing you said. Which was the business impact, the business value. So I want to come back a little bit and get a history. It used to be I would buy EMC for block and NetApp for file. You're sort of attacking that premise. Talk about that. >> Well, so we started in the performance end of the storage market, which is dominated by block. Because we knew that one was going to be the first to shift to all Flash. And we've already seen that play out. I mean, even the legacy vendors and their install base are inclined to use Flash. Cause it's actually cheaper than 15k disk to put in. That tech is about to hit a wall because as SSD's get bigger. You know, we've grown SSD's almost 400 fold since Pure got started. But we haven't changed the pipe, right? So if you make a vessel 400 times larger but you have the same pipe going in and out of it you're losing a lot of access to data. This is this new sea change to new protocols where we're shedding all of the disk. And I think the second big change is we're bringing the same wave to big data. Right, so we've been playing in the block market now we're playing in the file and object market. Because big data workloads, especially those that require deep learning, you just need massively parallel storage. And you're never going to be able to get that with, you know, 20-plus year old storage designs. >> So, Scott, when you talk to your customers, especially when you're talking to C-suite, how does storage fit into that discussion? I loved in the keynote, there's a lot of discussion of, you know, next generation applications. Everything from the, you know, buzzwords of the AI and ML type pieces out there. But, you know, what are the big challenges that your customer's facing? And how much is it a storage discussion? How much is it kind of a digital transformation? >> Yeah, I think we see all of it. We'll talk to customers that find that they can't innovate quickly, right? And they want to get so much more value from their data. One of the studies we cited in the keynote today was 80% of companies think they can make 20% more on the top line if they can just get insights out of their current data. I mean, that's a staggering statistic. 20% top line for every company if they could just get more out of their data. We want to make that possible. Their constrained with very expensive legacy technologies. That they simply can't give them the access to the data. They don't have the performance to mind those insights. And the infrastructure is so cumbersome, they just can't evolve and move their business forward. And so providing that recipe, you know, giving customers the ability to get dramatically more value out of their data and do it for lower cost is working. >> Yeah, and it's been interesting to watch kind of the data center to the cloud, and now cloud to the edge. And you've got solutions that are spanning across them. How do you see that maturing in really the vision to expand where Pure fits in the discussion. >> So, you know, from early on we targeted the cloud market. Because we knew that this is where the future lies, right? Even traditional enterprises still want all the benefits of the cloud inside of their own icy environments. >> And when you say cloud, you're meaning SaaS providers, service providers, as well as, you know? >> Yeah. We talk about the model that the big three are using. But, you know, this is very popular in many other clouds. The world is not moving to three data centers. Companies like Apple and Facebook are very committed to their own data center investment. And we seek to be a supplier to that consumer internet. The softwares of service and infrastructures service of providers. Because that's where the data center's going. But, you know, what we've seen recently with the proliferation of internet of things in sensor data is customers are just growing these huge data footprints that are just too big to move across public networks. So we talked about, in the keynote, in three years only one, out of every 20 bites that's generated, can fit on the internet that year. >> 2.5 out of 50, I think was the number. >> 2.5 out of 50 zettabytes. 50 zettabytes will be produced that year but only 2.5 is going to be transferred across the internet for the entire year. So we've got to get better as an industry at helping customers capture that data where it's generated, right? We call that edge. Sometimes it'll be on the devices, or it'll be in data centers that are close to the edge. And they've got to mine insights from it right there. >> Dave: Absolutely. >> One of the exciting demos we're showing here is actually AI co-processing with the public cloud. So we've got an edge data center that we're running deep learning in. But then we're selecting particular data sets through the deep learning to transfer it up to the public cloud for more machine learning. >> Those key nuggets, the needles maybe you transfer. Cause otherwise it's too expensive to transfer all the data. >> You can't transfer all of it. So if it's a self-driving car, you know, if I'm just routinely driving along, no big deal, you keep the data. But if I slam on the breaks because a dog's in the crosswalk that's the thing you want to do the training on. >> That can't be an asynchronous operation, right? So, okay, you're already getting the hook, I can't believe it, he just got here. (Scott laughs) Cube is a comfortable place but we got to throw some hard questions at you. So >> Please. >> Stu asked me the other day, or, actually, today, "Who's going to reach a billion dollars first?" And you don't have to predict, you can leave that to us. "Nutanix or Pure?" Okay, so talk about HCI. You made some comments up on stage about hyper-converged. Said that, you know, it's good for its own specific use cases. What's your point of view on that? >> So first of all, Nutanix has built a great business. >> Dave: Awesome, yeah, sure. >> We're absolutely fans. I will say, in the markets, those two new markets that we're playing in, in the cloud market and in the next gen applications and deep learning, we don't see hyper-converged infrastructure. We do see hyper-converged in business and enterprises. But it's usually the smaller scale deployments. The reason is, at scale, you don't want to collocate applications, data, and storage all in a single tier. It limits the ability to easily scale independently. You know, if you need more capacity you need more application compute versus data compute. You want to be able to flex those independently. Which is why all the big clouds and enterprise data centers run converged rather than hyper-converged. But the change that's coming is fast networks are changing this even more. So what I believes going to turn hyper-converged inside out is it's now more efficient to access remote storage than it is the same storage on your local chassis. And that's because we're offloading compute to the server net cards on there. So these new protocols NVMe over fabrics are actually making the network finally really the computer. There's no longer a chassis that's even meaningful. >> Big fan of that infrastructure and NVMe over fabric. Okay, next tough question is the narrative, from the big guy, EMC in particular, Pure is small, they're losing money. And your return narrative is tell EMC they're large, they're slow, they're outdated and confused. Okay, we love that, you know, it gets a little juices flowing. But here's my question. A lot of customers are large and slow and outdated and confused. So how do you get that fat middle to move faster and become a tailwind for you guys? >> So I think it's happening. I mean, customers just want technology to be made easily. I mean, one of the disrupters that's really helped is the AWS user experience, right? AWS has reset the bar for IT everywhere because people are like, why am I paying for consultants to visit my data center and take care of this mainframe or client server error technology that used to be so expensive. You know, consultants coming along with it. And permanently staying with it was okay. That's not okay, right? The world needs to move to self-driving infrastructure and they need radically better performance if they're going to use these new techniques. And so I think the key motivation is customers need to get more value from their data and they need to drive down costs. And we're in the sweet spot of being able to provide it. And these 20-plus year old designs can't. There's no way. >> So it's inevitable is really what I'm taking away from that. And you've got a lead that you can sustain in your view. >> You know, it's been very interesting to watch our competitors talk about the new FlashArray//X. With all NVMe and the new FlashBlade. They've said these are science projects that won't be real for three years. And, yet, we've won one of the biggest AI platforms in the world. You know, 25% or more of our business is coming from cloud customers. So, you know, from where we sit, things are going exactly as we'd hoped. >> Love it, we're talking about the edge, you're pushing the envelope at the edge. Alright, Scott, we'll give you the last word. I know you're super busy, but give us the wrap up. The bumper sticker on Accelerate 2017. >> Oh, it's such a phenomenal group coming together to talk about innovation. We've already shipped the hardware form factors this year, with our new FlashArray and the new FlashBlade. But the thing that I'm so excited about is we've got more than two years of software innovation teed up that we've been very quite about. So when you can bring two years of innovation and pack it into six months like we have this year, it makes things really exciting. >> Well congratulations on getting to this point. We're really excited about the future. Scott Dietz Dietzen, thanks for coming on The Cube. Great to see you again. >> Thank you, always good to be on the cube. >> Alright, keep it right there, buddy. We'll be back with our next guest. This is Pure Accelerate, live from San Fancisco. We'll be right back. (soft electronic music)

>> Announcer: Live from San Francisco, it's theCUBE! Covering Pure Accelerate 2017. Brought to you by Pure Storage. >> Welcome to Pier 70 in San Francisco, everybody. I'm Dave Vellante with my cohost Stu Miniman, and this is Pure Accelerate 2017. Pure Storage in 2009 started a big wave of flash migrations, and the company's strategy was to specifically go after the large EMC Install base of older Symmetrix, mainframe class storage, and even to a certain extent VNX and Clariion, if anyone remembers those terms, the Install base. Pure's ascendancy was really a function of shifting from spinning disk to flash. Fast forward seven, eight, nine years later, and Pure is talking about big data and AI and machine learning and IoT, and is really trying to completely transform not only the storage industry but itself as a leading player. The last time an independent storage company hit a billion dollars is about 20 years ago, a company called NetApp. Pure is trying to be the next to be a billion dollar company. Stu Miniman, lot of action goin' on here, used to be back in the day, I bought EMC for block, NetApp for file. Pure is trying to change that. >> Yeah, and Dave, you know storage, we've talked about it when Dell bought EMC. What did that mean to the whole storage industry? I wrote an article when it happened and said it's the end of the storage industry as we know it. When I came in here, it was like, oh, we're going to be talking about storage. You mentioned NetApp; I was at a NetApp event last week, and they said, "Storing is boring." It's really about the data, it's about the new applications. I really liked in the keynote they were talking about new use cases, new applications, how do they fit into that multi-cloud world, really interesting to hear Scott Dietzen, who we've known since this company was in stealth, laying out where the company is. They've got over 33 hundred customers, lot of SaaS applications, they're talking a lot about the machine learning and the AI pieces that are in here, but at the end of the day, I mean Dave, this is their primary business is a storage array replaces, as you said, the traditional EMC boxes that used to be sold. So how much of this is still kind of an update on what the legacy is doing, how much are they ready for the future? I'm excited to dig in with some real customers here. Pure has a good movement, good customer base, I've always had some good smart people with good tech, the Puritans as they call them, all wearing orange here. So, a cool venue and excited to dig in. >> Well, it's one of the fastest-growing companies in the storage business and in the IT business, and the way that Pure has gotten there isn't, you know, in its early days it never really talked much about so-called software-defined, it just did it. One of the problems that Pure attacks is the problem of migration. David Floyer and Wikibon have written extensively about the cost of migration, the pain of migration. It was almost just assumed, well you know, if I'm buying storage I'm going to have to migrate, and I'm going to spend 50, a hundred, sometimes many hundreds of thousands of dollars migrating my workloads from older arrays to newer arrays. Pure Storage has this Evergreen concept, where through the use of software and software-defined technologies, it's able to upgrade new customers quote-unquote seamlessly, there's that overused word again, but it's able to deliver essentially storage as a service even though you're putting an appliance on their site. So it's a radically different model. They've announced some things today, for instance like three site data replication, which is very very complicated. Trying to simplify that, so a lot of really novel ideas. Again I come back to their ascendancy. It was really based, Stu, upon attacking the slow, expensive spinning disk using its data reduction technology to create parity between the cost of spinning disk and the cost of flash, something David Floyer predicted back in 2009 would happen by 2014 for the high-spin speed. Now with FlashBlade, which is essentially the file-based system that Pure has, they're going after that same mantra with higher-capacity spinning disks, really going after the NetApp base. >> Yeah, and Dave, you mentioned that Pure could be the most recent billion dollar storage company. The company that might actually beat them to that is Nutanix. Now of course, Nutanix sells more than just storage. They're hyper-converged infrastructure, which means the compute that they're also selling, that's being used there, so it's not quite apples to apples, but the last quoter Nutanix had, about 10 million dollars more in revenue than Pure did; they also had IPOed. In that hyperconverge trend, one of the things that I saw early on on that, Dave, was attacking that migration cost. Hyperconverge, like what Pure does, a software layer, you create a pool of architectures, I can add in nodes, I can change configurations, I can update without the traditional way that we used to do it in storage, which was buy that box, take months to get it in there, load it up, transfer it over, retest it, you know all of those things that really kept your time-to-value on storage down, and that's something that Pure and all the hyper-converged players have been attacking, that kind of legacy mindset that we had in storage for so long. >> Yeah, and of course Pure's approach to converged is in partnership with Cisco and presumably others, I'm not actually sure about that, but Cisco's the main partner there with FlashStack, that's their converge play. They kind of do a knock on hyper-converged, kind of de-positioning it as sort of low-end, sort of contained, within small remote offices, whereas they're positioning FlashStack as the scalable internet infrastructure. Pure does very well with SaaS companies, they do, they're increasingly doing better with Fortune 500, they've still got a long way to go there. About 80% of their business is U.S., so there's a lot of upside internationally. We're talking about a company that'll be a billion dollars in their fiscal 2018, which is fundamentally the year we're in now, they've got about a 2.4 billion dollar market cap, they're growing at about 30% a year. And very interestingly, they had mid-60% gross margins at one point last year, they had like 69.6% gross margin, which is unheard of, you know, we haven't really seen this since back in the heydays of NetApp and EMC. The question is, is that sustainable? And of course the big question that we have today, and we're going to talk to Scott Dietzen, nickname Dietz, lot of nicknames here at Pure Storage, about is the concept of a large independent storage company. That concept is going away, it's like extinct except for one company really, NetApp is the only billion-dollar storage company left. It's been 20-plus years, maybe even 25 years since that's occurred. What are your thoughts on that, Stu? You know, I wrote a piece maybe eight years ago, Can EMC Remain Independent, recognizing that most of EMC's value was coming from Vmware and of course EMC could not remain independent. Do you think a company like Pure can unseat the leaders of Dell, EMC, HPE, IBM, and remain an independent storage company? >> Well, one of the things I always look at is what is, where are they going to hit their plateau? They're reaching towards billion dollars and they do continue to grow. I think that Pure still has plenty of headroom, but how long does it take them, Dave, to get to three or five billion dollars? The reason I throw out that number is that's probably how much storage Amazon's doing today. You know, look at Amazon, it's a 15 billion dollar company, somewhere between 15 and 30% of Amazon's business, and nobody in the storage business talks about that because it just ties to my applications. So I want to follow the applications, follow the data. It's good to hear that Pure is getting in with a lot of SaaS providers. From Wikibon data, 2/3 of the public cloud data, I'm sorry, of the public cloud revenue, is SaaS providers, so absolutely here come these like Pure, SolidFire sold, before when they were an independent company, sold to lots of service providers as well as SaaS providers. Kaminario, a Massachusetts-based flash company, sells to I believe it's about half of their business, is selling to the SaaS providers because these are companies that look at, okay I need to own how I scale my environment, own those economics, and need to grow that. And just one more piece on that economics, Dave. Look at that kind of multi- or hybrid cloud world. I bristle a little bit when I hear Scott Dietzen kind of almost say, public cloud, it's in the corner. about 20% of the use cases fit in that environment, yeah we'll do snaps to Amazon, we'll do some other things. But you don't put the public cloud in the corner and just say, oh, 20% of the market's there. 'Cause that's today, and it is still growing 50, 75, 100% depending on which public cloud you're talking about. We think that there's still plenty of upside, and when does that become a headwind that will slow the growth of what Pure's doing? You see a lot of the other software storage companies out there say how do they become software? When we were at the Veeam show, Dave, how did, they really were, we're going to live in Azure. We're going to partner with AWS, and they don't really care. Pure very much, their growth, their revenue, and their margins today are all built that they're going to be selling gear with that, yes they have the Purity 1 software and they have some cloud plays, but very much seems to be saying that public cloud's not the direction. I'm sure Scott will probably give us a little more nuance there, but you know, that legacy change to new distributed architectures has been a tailwind for Pure, and when will cloud be something that will push against their growth? >> Well, we're going to ask Scott Dietzen about that, and you're right on, I mean public cloud clearly is growing, I mean it's growing like crazy, particularly the SaaS component of that. Now of course, that can be a tailwind for Pure because they do sell to SaaS companies. They even, Scott even had a slide up there today showing Google, Uber, Facebook, AWS. Did you infer like I did that they were implying that they were selling to those companies, or? >> No, no no, I saw because in the last quarterly report they talked about basically the number four through a thousand. >> Dave: Four to a thousand. >> Dave: Right. >> So they're not selling to the top three, that they're clear on. >> So, okay, so the top three would be Amazon, Google, and Microsoft-- >> Right. >> But then there's Facebook, and Uber, possibly they could sell to those companies, Spotify is a SaaS company, so that SaaS part of the market is growing like crazy. Now the other point is, Wikibon released a study. We've been talking about it for the last couple of weeks in theCUBE around the true private cloud market forecast. True private cloud is an on-prem infrastructure that substantially mimics the public cloud at a much lower cost. We came up with this notion of true private cloud because there was so much cloudwashing going on, which really was virtualization. Now, the true private cloud is growing actually faster than any other cloud segment, now from a smaller base, granted. But we see about a 230 billion dollar TAM over the next 10 years evolving. Now, the most important part of this, and Scott Dietzen touched upon this in the morning, as did Hat, using some nicknames again, that companies are really focused on lowering their IT labor costs, and we see 150 billion dollars, approximately, of IT labor moving out of nondifferentiated heavy lifting, into what we sometimes call vendor R&D. In the form of cloud, or on-prem products, appliances, and other software frameworks that can automate and eliminate this low-value provisioning and patching and LUN management. So, Stu, you were very much involved in that true private cloud report, that market's exploding. I mean, to me, it's all about TAM expansion for Pure. They're a billion dollar company, roughly, they're participating in a 30 or 40 billion dollar market, so they have a long way to go. >> Yeah, absolutely. Because really, Dave, it's about the application. It is not a winner-takes-all environment. When you look at multicloud, it's what applications, and even we start teasing apart pieces of my applications and where they live. So, I look at, there was a nice logo slide that Pure put up, and you say okay, Hulu is a customer. Well, is Pure helping with their CDN? I really doubt it. You know, you look at Workday. Workday, up on stage at Amazon Reinvent talking about how they partnered with Amazon. So what applications is Pure winning, which ones are their customers using the public cloud for, and how does all of that sort out? Absolutely, true private cloud is really that reinvention of the data center, that flipping, if you will, of I mean Dave, you probably know better than me, that saying that IT spends 80 or 90 percent of their budget on keeping the lights on. How do we flip that so we can spend money on innovating, driving the business forward, stop spending on one of our favorite terms, undifferentiated heavy lifting and move to innovate and drive the business, and have IT serving those applications and serving the things that help me differentiate from the competition and move faster. Because, absolutely I'm sure something we'll hear this show, is it's that agility and that speed is what companies need, and Pure with their six nines of availability and that if you buy it today you're future-proof, if you will, is going to help customers say that they can have a platform that they buy today and know it's going to serve them well in the future. >> Well, Mark Benioff I think was the first that I heard said it, or it might've been Peter Burns, I can't remember, but basically there're going to be many more SaaS companies coming out of non-tech companies than tech companies. That to me, Stu, is a big, big tailwind for a company like Pure who's software first, software-defined, knows how to sell to SaaS companies. The other thing is, Pure's the latest company. They didn't say this but they certainly, one could infer it, the latest company to basically say tape is dead. So it used to be offsite backup the tape, now they're talking the flash to flash to cloud as the long-term retention. So a lot of really interesting things going on here. The venue is actually quite amazing, it's at Pier 70, this place is going to get torn down right after this show, it's a place that used to be an old steel mill that used to make battleships here, about two battleships a year during World War II. >> Yeah, the new Warriors facility is going to be here in Dogpatch soon, and I know everybody's super excited about that. >> Yeah, well, yeah, a lot of purple hats here, a lot of excited Warriors fans. >> All right, we'll be back, we've got day-to-day all day, wall-to-wall coverage of Pure Accelerate, #PureAccelerate. This is theCUBE, I'm Dave Vellante with Stu Miniman, we'll be right back with Scott Dietzen right after this short break. (upbeat electronic chords)