>> Announcer: Live from the Bill Graham Auditorium in San Francisco, it's theCUBE, covering Pure Storage Accelerate 2018. Brought to be you by Pure Storage. >> Welcome back to theCUBE, we are live at Pure Storage Accelerate 2018 in San Francisco. I'm Lisa Prince Martin with Dave The Who Vellante, and we're with David Hatfield, or Hat, the president of Purse Storage. Hat, welcome back to theCUBE. >> Thank you Lisa, great to be here. Thanks for being here. How fun is this? >> The orange is awesome. >> David: This is great. >> Super fun. >> Got to represent, we love the orange here. >> Always a good venue. >> Yeah. >> There's not enough orange. I'm not as blind yet. >> Well it's the Bill Graham, I mean it's a great venue. But not generally one for technology conferences. >> Not it's not. You guys are not conventional. >> So far so good. >> But then-- >> Thanks for keeping us out of Las Vegas for a change. >> Over my dead body I thin I've said once or twice before. >> Speaking of-- Love our customers in Vegas. Unconventional, you've said recently this is not your father's storage company. What do you mean by that? >> Well we just always want to do things a little bit less conventional. We want to be modern. We want to do things differently. We want to create an environment where it's community so our customers and our partners, prospective customers can get a feel for what we mean by doing things a little bit more modern. And so the whole orange thing is something that we all opt in for. But it's more about really helping transform customer's organizations think differently, think out of the box, and so we wanted to create a venue that forced people to think differently, and so the last three years, one was on Pier 48, we transformed that. Last year was in a big steelworkers, you know, 100 year old steel manufacturing, ship building yard which is now long since gone. But we thought the juxtaposition of that, big iron rust relative to what we're doing from a modern solid state perspective, was a good metaphor. And here it's about making music, and how can we together as an industry, develop new things and develop new songs and really help transform organizations. >> For those of you who don't know, spinning disk is known as spinning rust, right? Eventually, so very clever sort of marketing. >> The more data you put on it the slower it gets and it gets really old and we wanted to get rid of that. We wanted to have everything be online in the data center, so that was the point. >> So Hat, as you go around and talk to customers, they're going through a digital transformation, you hear all this stuff about machine intelligence, artificial intelligence, whatever you want to call it, what are the questions that you're getting? CEO's, they want to get digital right. IT professionals are wondering what's next for them. What kind of questions and conversations are you having? >> Yeah, I think it's interesting, I was just in one of the largest financial services companies in New York, and we met with the Chief Data Officer. The Chief Data Officer reports into the CEO. And he had right next to him the CIO. And so they have this development of a recognition that moving into a digital world and starting to harness the power of data requires a business context. It requires people that are trying to figure out how to extract value from the data, where does our data live? But that's created the different organization. It drives devops. I mean, if you're going to go through a digital transformation, you're going to try and get access to your data, you have to be a software development house. And that means you're going to use devops. And so what's happened from our point of view over the last 10 years is that those folks have gone to the public cloud because IT wasn't really meeting the needs of what devops needed and what the data scientists were looking for, and so what we wanted to create not only was a platform and a tool set that allowed them to bridge the gap, make things better today dramatically, but have a platform that gets you into the future, but also create a community and an ecosystem where people are aware of what's happening on the devop's side, and connect the dots between IT and the data scientists. And so we see this exploding as companies digitize, and somebody needs to be there to help kind of bridge the gap. >> So what's your point of view and advice to that IT ops person who maybe really good at provisioning LUNS, should they become more dev like? Maybe ops dev? >> Totally, I mean I think there's a huge opportunity to kind of advance your career. And a lot of what Charlie talked about and a lot of what we've been doing for nine years now, coming up on nine years, is trying to make our customers heroes. And if data is a strategic asset, so much so they're actually going to think about putting it on your balance sheet, and you're hiring Chief Data Officers, who knows more about the data than the storage and infrastructure team. They understand the limitations that we had to go through over the past. They've recognized they had to make trade offs between performance and cost. And in a shared accelerated storage platform where you have tons of IO and you can put all of your applications (mumbles) at the same time, you don't have to make those trade offs. But the people that really know that are the storage leads. And so what we want to do is give them a path for their career to become strategic in their organization. Storage should be self driving, infrastructure should be self driving. These are not things that in a boardroom people care about, gigabytes and petabytes and petaflops, and whatever metric. What they care about is how they can change their business and have a competitive advantage. How they can deliver better customer experiences, how they can put more money on the bottom line through better insights, etc. And we want to teach and work with and celebrate data heroes. You know, they're coming from the infrastructure side and connecting the dots. So the value of that data is obviously something that's new in terms of it being front and center. So who determines the value of that data? You would think it's the business line. And so there's got to be a relationship between that IT ops person and the business line. Which maybe here to for was somewhat adversarial. Business guys are calling, the clients are calling again. And the business guys are saying, oh IT, they're slow, they say no. So how are you seeing that relationship changing? >> It has to come together because, you know, it does come down to what are the insights that we can extract from our data? How much more data can we get online to be able to get those insights? And that's a combination of improving the infrastructure and making it easy and removing those trade offs that I talked about. But also being able to ask the right questions. And so a lot has to happen. You know, we have one of the leaders in devops speaking tomorrow to go through, here's what's happening on the software development and devops side. Here's what the data scientists are trying to get at. So our IT professionals understand the language, understand the problem set. But they have to come together. We have Dr. Kate Harding as well from MIT, who's brilliant and thinking about AI. Well, there's only .5% of all the data has actually been analyzed. You know, it's all in these piggy banks as Burt talked about onstage. And so we want to get rid of the piggy banks and actually create it and make it more accessible, and get more than .5% of the data to be usable. You know, bring as much of that online as possible, because it's going to provide richer insights. But up until this point storage has been a bottleneck to making that happen. It was either too costly or too complex, or it wasn't performing enough. And with what we've been able to bring through solid state natively into sort of this platform is an ability to have all of that without the trade offs. >> That number of half a percent, or less than half a percent of all data in the world is actually able to be analyzed, is really really small. I mean we talk about, often you'll here people say data's the lifeblood of an organization. Well, it's really a business catalyst. >> David: Oil. >> Right, but catalysts need to be applied to multiple reactions simultaneously. And that's what a company needs to be able to do to maximize the value. Because if you can't do that there's no value in that. >> Right. >> How are you guys helping to kind of maybe abstract storage? We hear a lot, we heard the word simplicity a lot today from Mercedes Formula One, for example. How are you partnering with customers to help them identify, where do we start narrowing down to find those needles in the haystack that are going to open up new business opportunities, new services for our business? >> Well I think, first of all, we recognize at Pure that we want to be the innovators. We want to be the folks that are, again, making things dramatically better today, but really future-proofing people for what applications and insights they want to get in the future. Charlie talked about the three-legged stool, right? There's innovations that's been happening in compute, there's innovations that have been happening over the years in networking, but storage hasn't really kept up. It literally was sort of the bottleneck that was holding people back from being able to feed the GPUs in the compute that's out there to be able to extract the insights. So we wanted to partner with the ecosystem, but we recognize an opportunity to remove the primary bottleneck, right? And if we can remove the bottleneck and we can partner with firms like NVIDIA and firms like Cisco, where you integrate the solution and make it self driving so customers don't have to worry about it. They don't have to make the trade offs in performance and cost on the backend, but it just is easy to stamp out, and so it was really great to hear Service Now and Keith walk through is story where he was able to get a 3x level improvement and something that was simple to scale as their business grew without having an impact on the customer. So we need to be part of an ecosystem. We need to partner well. We need to recognize that we're a key component of it because we think data's at the core, but we're only a component of it. The one analogy somebody shared with me when I first started at Pure was you can date your compute and networking partner but you actually get married to your storage partner. And we think that's true because data's at the core of every organization, but it's making it available and accessible and affordable so you can leverage the compute and networking stacks to make it happen. >> You've used the word platform, and I want to unpack that a little bit. Platform versus product, right? We hear platform a lot today. I think it's pretty clear that platforms beat products and that allows you to grow and penetrate the market further. It also has an implication in terms of the ecosystem and how you partner. So I wonder if you could talk about platform, what it means to you, the API economy, however you want to take that. >> Yeah, so, I mean a platform, first of all I think if you're starting a disruptive technology company, being hyper-focused on delivering something that's better and faster in every dimension, it had to be 10x in every dimension. So when we started, we said let's start with tier one block, mission critical data workloads with a product, you know our Flash Array product. It was the fastest growing product in storage I think of all time, and it still continues to be a great contributor, and it should be a multi-billion dollar business by itself. But what customers are looking for is that same consumer like or cloud like experience, all of the benefits of that simplicity and performance across their entire data set. And so as we think about providing value to customers, we want to make sure we capture as much of that 99.5% of the data and make it online and make it affordable, regardless of whether it's block, file, or object, or regardless if it's tier one, tier two, and tier three. We talk about this notion of a shared accelerated storage platform because we want to have all the applications hit it without any compromise. And in an architecture that we've provided today you can do that. So as we think about partnering, we want to go, in our strategy, we want to go get as much of the data as we possibly can and make it usable and affordable to bring online and then partner with an API first open approach. There's a ton of orchestration tools that are out there. There's great automation. We have a deep integration with ACI at Cisco. Whatever management and orchestration tools that our customer wants to use, we want to make those available. And so, as you look at our Flash Array, Flash Deck, AIRI, and Flash Blade technologies, all of them have an API open first approach. And so a lot of what we're talking about with our cloud integrations is how do we actually leverage orchestration, and how do we now allow and make it easy for customers to move data in and out of whatever clouds they may want to run from. You know, one of the key premises to the business was with this exploding data growth and whether it's 30, 40, 50 zettabytes of data over the next you know, five years, there's only two and a half or three zettabytes of internet connectivity in those same period of time. Which means that companies, and there's not enough data platform or data resources to actually handle all of it, so the temporal nature of the data, where it's created, what a data center looks like, is going to be highly distributed, and it's going to be multi cloud. And so we wanted to provide an architecture and a platform that removed the trade offs and the bottlenecks while also being open and allowing customers to take advantage of Red Shift and Red Hat and all the container technologies and platform as a service technologies that exist that are completely changing the way we can access the data. And so we're part of an ecosystem and it needs to be API and open first. >> So you had Service Now on stage today, and obviously a platform company. I mean any time they do M and A they bring that company into their platform, their applications that they build are all part of that platform. So should we think about Pure? If we think about Pure as a platform company, does that mean, I mean one of your major competitors is consolidating its portfolio. Should we think of you going forward as a platform company? In other words, you're not going to have a stovepipe set of products, or is that asking too much as you get to your next level of milestone. >> Well we think we're largely there in many respects. You know, if you look at any of the competitive technologies that are out there, you know, they have a different operating system and a different customer experience for their block products, their file products, and their object products, etc. So we wanted to have a shared system that had these similar attributes from a storage perspective and then provide a very consistent customer experience with our cloud-based Pure One platform. And so the combination of our systems, you hear Bill Cerreta talk about, you have to do different things for different protocols to be able to get the efficiencies in the data servers as people want. But ultimately you need to abstract that into a customer experience that's seamless. And so our Pure One cloud-based software allows for a consistent experience. The fact that you'll have a, one application that's leveraging block and one application that's leveraging unstructured tool sets, you want to be able to have that be in a shared accelerated storage platform. That's why Gartner's talking about that, right? Now you can do it with a solid state world. So it's super key to say, hey look, we want consistent customer experience, regardless of what data tier it used to be on or what protocol it is and we do that through our Pure One cloud-based platform. >> You guys have been pretty bullish for a long time now where competition is concerned. When we talk about AWS, you know Andy Jassy always talks about, they look forward, they're not looking at Oracle and things like that. What's that like at Pure? Are you guys really kind of, you've been also very bullish recently about NVME. Are you looking forward together with your partners and listening to the voice of the customer versus looking at what's blue over the corner? >> Yes, so first of all we have a lot of respect for companies that get big. One of my mentors told me one time that they got big because they did something well. And so we have a lot of respect for the ecosystem and companies that build a scale. And we actually want to be one of those and are already doing that. But I think it's also important to listen and be part of the community. And so we've always wanted to the pioneers. We always wanted to be the innovators. We always wanted to challenge conventions. And one of the reasons why we founded the company, why Cos and Hayes founded the company originally was because they saw that there was a bottleneck and it was a media level bottleneck. In order to remove that you need to provide a file system that was purpose built for the new media, whatever it was going to be. We chose solid state because it was a $40 billion industry thanks to our consumer products and devices. So it was a cost curve where I and D was going to happen by Samsung and Toshiba and Micron and all those guys that we could ride that curve down, allowing us to be able to get more and more of the data that's out there. And so we founded the company with the premise that you need to remove that bottleneck and you can drive innovation that was 10x better in every dimension. But we also recognize in doing so that putting an evergreen ownership model in place, you can fundamentally change the business model that customers were really frustrated by over the last 25 years. It was fair because disk has lots of moving parts, it gets slower with the more data you put on, etc., and so you pass those maintenance expenses and software onto customers. But in a solid state world you didn't need that. So what we wanted to do was actually, in addition to provide innovation that was 10x better, we wanted to provide a business model that was evergreen and cloud like in every dimension. Well, those two forces were very disruptive to the competitors. And so it's very, very hard to take a file system that's 25 years old and retrofit it to be able to really get the full value of what the stack can provide. So we focus on innovation. We focus on what the market's are doing, and we focus on our customer requirements and where we anticipate the use cases to be. And then we like to compete, too. We're a company of folks that love to win, but ultimately the real focus here is on enabling our customers to be successful, innovating forward. And so less about looking sidewise, who's blue and who's green, etc. >> But you said it before, when you were a startup, you had to be 10x better because those incumbents, even though it was an older operating system, people's processes were wired to that, so you had to give them an incentive to do that. But you have been first in a number of things. Flash itself, the sort of All-Flash, at a spinning disk price. Evergreen, you guys set the mark on that. NVME you're doing it again with no premium. I mean, everybody's going to follow. You can look back and say, look we were first, we led, we're the innovator. You're doing some things in cloud which are similar. Obviously you're doing this on purpose. But it's not just getting close to your customers. There's got to be a technology and architectural enabler for you guys. Is that? >> Well yeah, it's software, and at the end of the day if you write a file system that's purpose built for a new media, you think about the inefficiencies of that media and the benefits of that media, and so we knew it was going to be memory, we knew it was going to be silicon. It behaves differently. Reads are effectively free. Rights are expensive, right? And so that means you need to write something that's different, and so you know, it's NVME that we've been plumbing and working on for three years that provides 44,000 parallel access points. Massive parallelism, which enables these next generation of applications. So yeah we have been talking about that and inventing ways to be able to take full advantage of that. There's 3D XPoint and SCM and all kinds of really interesting technologies that are coming down the line that we want to be able to take advantage of and future proof for our customers, but in order to do that you have to have a software platform that allows for it. And that's where our competitive advantage really resides, is in the software. >> Well there are lots more software companies in Silicon Valley and outside Silicon Valley. And you guys, like I say, have achieved that escape velocity. And so that's pretty impressive, congratulations. >> Well thank you, we're just getting started, and we really appreciate all the work you guys do. So thanks for being here. >> Yeah, and we just a couple days ago with the Q1FY19, 40%, you have a year growth, you added 300 more customers. Now what, 4800 customers globally. So momentum. >> Thank you, thank you. Well we only do it if we're helping our customers one day at a time. You know, I'll tell you that this whole customer first philosophy, a lot of customers, a lot of companies talk about it, but it truly has to be integrated into the DNA of the business from the founders, and you know, Cos's whole pitch at the very beginning of this was we're going to change the media which is going to be able to transform the business model. But ultimately we want to make this as intuitive as an iPhone. You know, infrastructure should just work, and so we have this focus on delivering simplicity and delivering ownership that's future proofed from the very beginning. And you know that sort of permeates, and so you think about our growth, our growth has happened because our customers are buying more stuff from us, right? If you look at our underneath the covers on our growth, 70 plus percent of our growth every single quarter comes from customers buying more stuff, and so, as we think about how we partner and we think about how we innovate, you know, we're going to continue to build and innovate in new areas. We're going to keep partnering. You know, the data protection staff, we've got great partners like Veeam and Cohesity and Rubrik that are out there. And we're going to acquire. We do have a billion dollars of cash in the bank to be able to go do that. So we're going to listen to our customers on where they want us to do that, and that's going to guide us to the future. >> And expansion overseas. I mean, North America's 70% of your business? Is that right? >> Rough and tough. Yeah, we had 28%-- >> So it's some upside. >> Yeah, yeah, no any mature B2B systems company should line up to be 55, 45, 55 North America, 45, in line with GDP and in line with IT spend, so we made investments from the beginning knowing we wanted to be an independent company, knowing we wanted to support global 200 companies you have to have operations across multiple countries. And so globalization is always going to be key for us. We're going to continue our march on doing that. >> Delivering evergreen from an orange center. Thanks so much for joining Dave and I on the show this morning. >> Thanks Lisa, thanks Dave, nice to see you guys. >> We are theCUBE Live from Pure Accelerate 2018 from San Francisco. I'm Lisa Martin for Dave Vellante, stick around, we'll be right back with our next guests.

>> Narrator: Live, from the Bill Graham Auditorium in San Francisco, it's theCUBE! Covering, Pure Storage Accelerate, 2018! Brought to you by: Pure Storage. (upbeat electronic music) >> Welcome back to theCUBE, we are live at Pure Storage Accelerate 2018. I am Lisa Martin, supporting the Prince look today. We're at the Bill Graham Civic Auditorium, this is a super cool building, 1915 it was built, and is the home of so many cool artists, so got to represent today. Dave Vellante's my co-host for the day. >> Well, I got to tell you, Charlie, thank you for wearing a tie. >> Yeah, well-- >> My tie's coming off. >> Okay, well, hey, look, you and me both. >> You have to wear yours-- >> Well, I do, I still have investors later. >> I'm not the only one who's representing musicians today. >> I got my tee shirt underneath here, all right. >> Oh, oh oh! >> Ladies and gentlemen, you will not want to miss this. >> Bill Graham, right, I'm on a Who, Lisa. >> "I'm on a Who", oh he said The Who! >> The Who! >> We got Roger Daltrey-- >> Charlie: Oh, that's fantastic. >> (laughing) >> Pete Townshend-- >> The Who! >> That's my deal. >> He's being so careful not to ruin his shirt with the buttons. >> The Who. >> I got to say-- >> Well done. >> Tower of Power was really my band. >> Oh, wow. >> They didn't play here, but Bill Graham was the first to sign him. >> Wow, representing. >> Well, I was an East Coast boy, so it was all the New York concerts and venues for me, but it was fantastic, I used to watch, you remember, Bill Graham presents? That was-- >> Yes! >> Yeah! >> I always thought if I found myself on stage, there'd be a couple of security guys dragging me off. >> Love that line! >> Nobody today, and you got a lot of applause, a lot of confetti. So Charlie, kick things off this morning at the Third Annual Accelerate, packed house, orange as far as the eye can see, but just a couple days ago-- >> Sea of orange. >> Exactly, sea of orange, a proud sea of orange. >> Right. >> Just two days ago, on the 21st of May, you guys announced your fiscal 19 first quarter results. Revenue up 40%, year over year, you added 300 new customers, including the U.S. Department of Energy, Paige.ai, and the really amazing transformational things they're doing for cancer research. You also shared today your NPS score: over 83! >> Correct. >> Big numbers shared today. >> These are big numbers. >> You've been the CEO for about nine months or so now, tell us what's going on, how are you sustaining this? Stocks going up? >> Right, right, stock's up about 80% year over year right now, so that's very good, but really I think it's a recognition that Pure is playing a very important role in the data processing, in the high-tech landscape, right? I think, you know, storage was really, I think up until now, really viewed as maybe an aging technology, something that was becoming commoditized, something where innovation wasn't really important, and Pure was the one company that actually thought that storage was important. As I mention in my keynote talk, you know, I really view technology as being a three-legged stool. That is, it's comprised as three elements: compute, networking, and storage. If any of one of them falls behind, you know, it becomes unbalanced, and frankly, you know, computers has advanced 10X over the last 10 years, networking has advanced more than 10X over the last 10 years, and storage didn't keep up at the same time that data was exploding, right? Pure is the one company that actually believes that there's real innovation to be had in storage. Paige.ai is a great example of that, I know it tugs on all of our heartstrings, but Paige.ai took lots of analog data, what was it, we're talking about cancer samples that were on slides, okay, they took literally millions of samples, digitized it, and fed it into an AI machine learning engine. Now, if you understand the way machine learning operates, it has to practice on thousands, or actually tens of thousands, millions, of samples. It could take all year, or it can take hours. What you want it to do is take minutes or hours, and if the data can't be fed fast enough into that engine, you know, it's going to take all year. You want your cancer pathology to be analyzed, you know, really quickly. >> Immediately. >> Immediately, right? That's what this engine can do, and it can do it because we can feed the data at it fast, at the rate it needs to be able to analyze that cancer. Data is just becoming the core of every company's business, it's becoming, if you will, the currency, it's becoming the gold mine, where companies now want to analyze their data. Right now, only about a half of 1% of the data that companies have can even be analyzed, because it's being kept in cold storage, and at Pure, we believe in no cold storage, you know, it's all got to be hot, it's all got to be available, able to be analyzed, able to be mined. >> Do you think, I got to ask you this, do you think that percentage will rise faster than the amount of data that's going to be created? Especially when you're thinking things at the edge. >> It's a great question, and I think absolutely! The reason is because it's not only the data that's being generated, or saved now, that's important. If you really want to analyze trends and get to know your customers, you know, the last five years, the last 10 years of data, is just as important. Increasingly, I think you may know this just from online banking, right, it used to be that maybe you'd have last month's checks available to you, but now you want to go back a year, you want to go back five years, and see, you know, you get audited by the IRS, they say: "Well, prove to us you did this," you need to find those checks and banks are being expected to have that information available to you. >> I got to ask you, you're what we call a tech-athlete, you were showing your tech-chops on stage, former CTO, but you've been a CEO, a board member of many prominent companies, why, Charlie, did you choose to come back in an operating role? You know, why at Pure, and why in an operating role? >> You know, I love being part of a team, it's really that. You know, I've had great fun throughout my career, but being part of a team that is focused on innovation, and is enabling, you know, not just our industry but frankly, allowing the world's business to do a better job. I mean, that's what gets me thrilled. I like working with customers every day, with our sales people, with our engineers. It's just a thrilling life! >> You did say in your keynote this morning that you leave the office, at the end of the day, with a smile, and you get to the office in the morning with a smile, that's pretty cool. >> I do, and if you asked my wife she'd tell you the same thing right, so I really enjoy being part of the team. >> Dave: So, oh, go ahead, please >> Oh, thank you sir. One of the things that Pure has done well is: partners, partnerships. We're going to be talking with NVIDIA later today, so this is going to be on, you guys just announced the new AIRI mini, and I was just telling Dave: I need to see that box, cause it looks pretty blinged out on the website. Talk to us about, though, what you guys are doing with your partnerships and how you've seen that really be represented in the successes of your customers. >> Right, well there are several different types of partnerships that we could talk about. First of all, we're 100% channel lead in our organization. We believe in the channel. You know, this is ancient history now, but when I arrived at Cisco, they were 100% direct at that time, no partners whatsoever. >> Belly to belly. >> Belly to belly, and I was very much apart of driving Cisco to be 100% partner over that period of time. So, you know, my history and belief in utilizing a channel to go to market is very well known, and my view is: the more we make our partners successful, the more we make our customers successful, the more successful we will be. But then, there are other types of partnerships as well. There are technology partnerships, like what we have with Cisco and NVIDIA, and again, we need to do more with other companies to make the solutions that we jointly provide, easier for our customers to be able to use. Then, there are system integration partners, because, let's face it, with as much technology as we build, customers often need help from experts of system integrators, to be able to pull that all together, to solve their business problems. Again, the more we can work with these system integrators, have them understand our products, train them to use them better, the better off our customers will be. >> Charlie, Pure has redefined, in my opinion, escape velocity in the storage business, it used to be getting to public, you saw that with 3PAR, Compel, Isilon, Data Domain, you guys are the first storage to hit one billion dollars since NetApp-- >> Right, 20 years ago. >> Awesome milestone, I didn't think it was possible eight years ago, to be honest, so now, okay, what's next? Can you remain an independent company? In order to remain independent, you got to grow, NetApp got to five billion in a faster growing market, you guys got to gain-share, how do you continue to do that? >> Well, you're right, each and every day we have to compete. We have to, you know, kill for what we eat. Our European sales lead calls it, our competition, on an account basis, a: knife fight in a phone booth. So the competition is tough out there, but we are bringing innovations to market, and more importantly, we're investing in the technology at a rate that I think our competitors are not going to be able to keep up with. We invest close to 20% of our revenue every year in R&D. Our competitors are in single-digits, okay, and this is a technology business, you know, eventually, if you don't keep up with the technology, you're going to lose, and so, that I think is going to allow us to continue growing and scaling. You're right, growth is important for us to be able to stay independent, but I looked very deeply at the entire industry before joining, and you know, I was in private equity for awhile, so we know how to analyze an industry, right? My view was that all of the other competitors are either no longer investing, and that's either internally, or in terms of large acquisitions, or they've already made their beds, and so I didn't really see a likely acquirer for Pure, and that was going to give us, if you will, the breathing room to be able to grow to a scale where we can continue to be independent. >> Almost by necessity! >> Almost by necessity, yeah. >> It's good to put the pressure on yourselves. >> So, in terms of where you are now, how is Pure positioned to lead storage growth in infrastructure for AI-based apps? There's this explosion of AI, right, fueled by deep-learning, and GPUs, and big data. How are you positioned to lead this charge is storage growth there? >> That's such a great question, you know, to get to the part of, you know, I started hearing about AI when I graduated college, which is a really long time ago now, and yet why is it exploding now? Well, computing has done its job, right, we're here today with NVIDIA, with GPUs that are just, you know, we're talking about, you know, giga-flops, you know, just incredible speeds of compute. Networking has done its job, we're now at 100 gigabits, and we're starting to talk about 400 gigabit per second networks, and storage hadn't kept up, right, even though data is exploding. So, we announced today, as you know, our data-centric architecture, and we believe this is an architecture that really sets our customers' data free. It sets it free in many ways. One of which, it allows it to always be hot, at a price that customers can afford, not only can afford, it's cheaper than what they're doing today, because we're collapsing tiers. No longer a hot tier, warm tier, cold tier, it's all one tier that can serve many, many needs at the same time, and so all of your applications can get access to real-time data, and access it simultaneously with the other applications, and we make sure that they get the quality of service they need, and we protect the data from being, you know, either corrupted or changed when other applications want it to be the same. So, we do what is necessary now, to allow the data to be analyzed for whether it's analytics, or AI, or machine learning, or simply to allow DEV-ops to be able to operate on real-time data, on live data, you know, without upsetting the operation's environment. >> I want to make sure I understand this, so you're democratizing tiering, essentially-- >> Charlie: Democratizing tiering. >> So how do you deal with, you know, different densities, QLC, et cetera, is that through software, is that? >> Well, so we hide that from the customer, right, so we're able to take advantage of the latest storage because we speak directly to the storage chips themselves. All of our competitors use what are called SSDs, solid state drives. Now, think about that for a moment. There's no drive in a solid state drive, these things are designed to allow Flash to mimic hard disk, but hard disk has all these disadvantages, why do you want Flash to mimic hard disk? We also set Flash free. We're able to use Flash in parallel, okay, we're able to take low quality Flash and make it look like high quality Flash, because our software adapts to whatever the specific characteristics of the flash are. So we have this whole layer of software that does nothing other than allow Flash to provide the best possible performance characteristics that Flash can provide. It allows us to mix and match, and completely hide that from the customer. >> With MVME, you're taking steps to eliminate what I call: the horrible storage stack. >> Charlie: That's exactly right. >> So, you talked earlier about the disparity between storage and the other two legs of the stool, so as you attack that bottle neck, what's the new bottle neck? Is it networking, and do you see that shaking out? >> It's a great question, I think the new bottle neck, I would actually put it at a higher layer, it's the orchestration layer that allows all this stuff to work together, in a way that requires less human interaction. There are great new technologies on the horizon, you know, Kubernetes, and Spark, and Kafka, a variety of others that will allow us to create a cloud environment, if you will, both for the applications and for the data, within private enterprises, similar to what they can get in the cloud, in many cases. >> You also talked about, innovation, and I want to ask you about the innovation equation, as both a technologist and a CEO who talks to a lot of other CEOS. We see innovation as coming from data, and the application of machine intelligence on that data, and cloud economics at scale, do you buy that? And where do you guys fit in that? >> We do buy that, although cloud economics, we believe, that we can create an environment where customers and their private data centers can also get cloud economics, and in fact, if you look at cloud economics, they're very good for some workloads, not necessarily good for other workloads. They're good at low scale, but not initially good at high scale. So, how do we allow customers to be able to easily move workloads between these different environments, depending on what their specific needs are, and that's what we view as our job, but also point something else out as well. About 30% of our sales are in the cloud providers themselves. They're in softwares that service, infrastructures that service, platforms as a service. These vendors are using our systems, so as you can see, we are already designed for cloud economics. We also already get to see how these leading-edge, very high scale customers construct their environments, and then we're able to bring that into the enterprise environment as well. >> I mean, I think we buy that. You're an arm's dealer to the cloud, you know, maybe not the tier zero to use that term, which is, but also, you're helping your On-Prem customers bring the cloud operating model to their data, cause they can't just stuff it into the cloud. >> It won't always be the right solution for everyone, now, it'll be the right solution for many, and we're doing more and more to allow the customers to bridge that, but we think that it's a multi-cloud environment, including private data centers, and we want to create as much flexibility as we can. >> Would you say Pure is going to be an enabler of companies being able to analyze way more than a half a percent of their data? >> If we don't do that, then there's no good reason for us to be in business. That is exactly what we're focused on. >> Last question for you Charlie, you've been the CEO about nine months now; cultural observations of Pure Storage? >> Oh, you know, you've seen the sea of orange that's here, and by the way, the orange is being sported not just by Puritans, not just by our employees, but by our partners and our customers as well. It's a bit infections, I have to be honest, I had one piece of orange clothing when I started this job, and you know, my mother's into it, she's sending me orange, you know, all sorts of orange clothing, some of which I'll wear, some of which I won't. My wife, everyone, there's a lot of enthusiasm about this business, it has a bit of a cult-like following, and Puritans are really very, very dedicated, not just to the customer, I mean, people become dedicated, you know, not to an entity, they become dedicated to a cause, and the cause for Pure is really to make our customers successful, and our employees feel that it's what drives them every day, it's what brings them to work, and hopefully it's what puts a smile on their face when they go home at night. >> Charlie Giancarlo, CEO of Pure Storage, thanks so much for joining us on theCUBE today! >> Thank you, thank you. >> For The Who Vallante, I'm Prince Martin, and we are live at Pure Accelerate 2018, in San Francisco, stick around, Who and I will be right back. (upbeat electronic music)

>> Announcer: Live from the Bill Graham Auditorium in San Francisco, it's theCUBE covering Pure Storage Accelerate 2018, brought to you by Pure Storage. (bright music) >> Welcome to theCUBE. We are live at Pure Storage Accelerate 2018. I'm Lisa Martin also known as Prince for today with Dave Vellante. We're at the Bill Graham Civic Auditorium, really cool, unique venue. Dave, you've been following Pure for a long time. Today's May 23rd, they just announced FY19 Q1 earnings a couple days ago. Revenue up 40% year over year, added 300 new customers this last quarter including the Department of Energy, Paige.ai, bringing their customer tally now up to about 4800. We just came from the keynote. What are some of the things that you've observed over the last few years of following Pure that excite you about today? >> Well Lisa, Pure's always been a company that is trying to differentiate itself from the pack, the pack largely being EMC at the time. And what Pure talked about today, Matt Kixmoeller talked about, that in 2009, if you go back there, Fusion-io was all the rage, and they were going after the tip of the pyramid, and everybody saw flash, as he said, his words, as the tip of the pyramid. Now of course back then David Floyer in 2008 called that flash was going to change the world, that is was going to dominate. He'd forecast that flash was going to be cheaper than disk over the long term, and that is playing out in many market segments. So he was one of the few that didn't fall into that trap. But the point is that Pure has always said, "We're going to make flash cheaper than "or as cheap as spinning disk, "and we're going to drive performance, "and we're going to differentiate from the market, "and we're going to be first." And you heard that today with this company. This company is accelerated to a billion dollars, the first company to hit a billion dollars since NetApp. Eight years ago I questioned if any company would do that. If you look at the companies that exited the storage market, that entered and exited the storage market that supposedly hit escape velocity, 10 years ago it was 3PAR hit $250 million. Isilon, Data Domain, Compellent, these companies sold for between $1 and $2.5 billion. None of them hit a billion dollars. Pure is the first to do that. Nutanix, which is really not a storage company, they're hyper-converged infrastructure, they got networking and compute, sort of, hit a billion, but Pure is the the first pure play, no pun intended, storage company to do that. They've got a $5 billion evaluation. They're growing, as you said, at 40% a year. They just announced their earnings they beat. But the street reacted poorly because it interpreted their guidance as lower. Now Pure will say that we know we raised (laughs) our guidance, but they're lowering the guidance in terms of growth rates. So that freaks the street out. I personally think it's pure conservativism and I think that they'll continue to beat those expectations so the stock's going to take a hit. They say, "Okay, if you want to guide lower growth, "you're going to take the hit," and I think that's smart play by Pure because if and when they beat they'll get that updraft. But so that's what you saw today. They're finally free cash flow positive. They've got about a billion dollars in cash on the balance sheet. Now half a billion of that was from a convertible note that they just did, so it's really not coming from a ton of free cash flow, but they've hit that milestone. Now the last point I want to make, Lisa, and we talked about this, is Pure Storage at growing at 40% a year, it's like Amazon can grow even though they make small profit. The stock price keeps going up. Pure has experienced that. You're certainly seeing that with companies like Workday, certainly Salesforce and its ascendancy, ServiceNow and its ascendancy. These companies are all about growth. The street is rewarding growth. Very hard for a company like IBM or HPE or EMC when it was public, when they're not growing to actually have the stock price continue to rise even though they're throwing off way more cash than a company like Pure. >> Also today we saw for the first time the new CEO's been Charlie Giancarlo, been the CEO since August of 2017, sort of did a little introduction to himself, and they talked about going all in on shared accelerated storage, this category that Gartner's created. Big, big focus there. >> Yeah, so it's interesting. When I look at so-called shared accelerated storage it's 2018, Gartner finally came up with a new category. Again, I got to give credit to the Wikibon guys. I think David Floyer in 2009 created the category. He called it Server SAN. You don't know if that's David, but I think maybe shared accelerated storage's a better name. Maybe Gartner has a better V.P. of Naming than they do at Wikibon, but he forecast this notion of Server SAN which really it's not DAS, it's not SAN, it's this new class of accelerated storage that's flash-based, that's NVMe-based, eliminates the horrible storage stack. It's exactly what Pure was talking about. Again, Floyer forecast that in 2009, and if you look at the charts that he produced back then it looks like you see the market like this going shoom, the existing market and the new market just exploding. So Pure, I think, is right on. They're targeting that wide market. Now what they announced today is this notion of their flash array for all workloads, bringing NVMe to virtually their entire portfolio. So they're aiming their platform at the big market. Remember, Pure's ascendancy to a billion really came at the expense of EMC's VMAX and VNX business. They aimed at that and they hit it hard. They positioned flash relative to EMC's either spinning disk or flash-based systems as better, easier, cheaper, et cetera, et cetera, and they won that battle even though they were small. Pure's a billion, EMC at the time was $23, $24 billion, but they gained share very rapidly when you see the numbers. So what they're doing is basically staking a claim, Lisa, saying, "We can point our platform "at the entire $30, $40, $50 billion storage TAM," and their intention, we're going to ask Charlie Giancarlo and company, their aspiration is to really continue to gain share in that marketplace and grow significantly faster than the overall market. >> So they also talked about the data-centric architecture today and gave some great examples of customers. I loved the Domino's Pizza example that they talked about, I think he was here last year, and how they're actually using AI at Domino's to analyze the phone calls using this AI engine to identify accurate order information and get you your pizza as quickly as you want. So not only do we have pizza but we were showered with confetti. Lot of momentum there. What is your opinion of Pure, what they're doing to enable companies to utilize and maximize AI-based applications with this data-centric architecture? >> So Pure started in the what's called block storage, really going after the high-volume, the transaction OLTP business. In the early days of Pure you'd see them at Oracle OpenWorld. That's where the high-volume transactions are taking place. They were the first really, by my recollection, to do file-based flash storage. Back in the day it was you would buy EMC for a block, you'd buy NetApp for file. What Pure did is said, "Okay, let's go after "the biggest market player, EMC, "which we'll gain share there in block, "and then now let's go after NetApp space and file." They were again the first to do that. And now they're extending that to AI. Now AI is a small but growing market, so they want to be the infrastructure for artificial intelligence and machine intelligence. They've struck a partnership with Nvidia, they're using the example of Domino's. It's clearly not a majority of their business today, but they're doing some clever things in marketing, getting ahead of the game. This is Pure's game. Be first, get out in the lead, market it hard, and then let everybody else look like they're following which essentially they are and then claim leadership position. So they are able to punch above their weight class by doing that, and that's what you're seeing with the Domino's example. >> You think they're setting the bar? >> Do I think they're setting the bar? Yeah, in many respects they are because they are forcing these larger incumbents to respond and react because they're in virtually all accounts now. The IT practitioners, they look at the Gartner Magic Quadrant, who's in the upper right, I got to call them in for the RFP. They get a seat at that table. I would say it was interesting hearing Charlie speak today and the rest of the executives. These guys are hardcore storage geeks, and I mean that with all due respect. They love storage. It kind of reminds me of the early days of EMC. They are into this stuff. Their messaging is really toward that storage practitioner, that administrator. They're below the line but those are the guys that are actually making the decisions and affecting transactions. They're touching above the line with AI messages and data growth and things like that, but it's really not a hardcore CIO, CFO, CEO message yet. I think that will come later. They see a big enough market selling to those IT practitioners. So I think they are setting the bar in that IT space, I do. >> One of the things I thought that they did well is kind of position the power of data where, you know people talk about data as fuel. Data's really a business catalyst that needs to be analyzed across multiple areas of a business simultaneously to really be able to extract value. They talked about the gold rush, oh gee, of 1849 and now kind of in this new gold rush enabling IT with the tools. And interestingly they also talked about a survey that they did with the SEE Suite who really believe that analyzing data is going to be key to driving businesses forward, identifying new business models, new products, new services. Conversely, IT concern do we have the right tools to actually be able to evaluate all of these data to extract the value from it? Because if you can't extract the value from the data, is it, it's not useful. >> Yeah, and I think again, I mean to, we give Pure great marketing, and a lot of what they're doing, (laughs) it's technology, it's off-the-shelf technology, it's open source components. So what's their differentiation? Their differentiation is clearly their software. Pure has done a great job of simplifying the experience for the customer, no question, much in the same way that 3PAR did 10 or 15 years ago. They've clearly set the bar on simplicity, so check. The other piece that they've done really well is marketing, and marketing is how companies differentiate (laughs) today. There's no question about it that they've done a great job of that. Now having said that I don't think, Lisa, that storage, I think storage is going to be table stakes for AI. Storage infrastructure for AI is going to have to be there, and they talked about the gold rush of 1849. The guys who made all the money were the guys with the picks and the axes and the shovels supplying them, and that's really what Pure Storage is. They're a infrastructure company. They're providing the pickaxes and the shovels and the basic tools to build on top of that AI infrastructure. But the real challenges of AI are where do I apply and how do I infuse it into applications, how do I get ROI, and then how do I actually have a data model where I can apply machine intelligence and how do I get the skillsets applied to that data? So is Pure playing a fundamental catalyst to that? Yes, in the sense that I need good, fast, reliable, simple-to-use storage so that I don't have to waste a bunch of time provisioning LUNs and doing all kinds of heavy lifting that's nondifferentiated. But I do see that as table stakes in the AI game, but that's the game that Pure has to play. They are an infrastructure company. They're not shy about it, and it's a great business for them because it's a huge market where they're gaining share. >> Partners are also key for them. There's a global partner summit going on. We're going to be speaking, you mentioned Nvidia. We're going to be talking with them. They also announced the AIRI Mini today. I got to get a look at that box. It looks pretty blinged out. (laughing) So we're going to be having conversations with partners from Nvidia, from Cisco as well, and they have a really diverse customer base. We've got Mercedes-AMG Petronas Motorsport Formula One, we've got UCLA on the CIO of UCLA Medicine. So that diversity is really interesting to see how data is being, value, rather, from data is being extracted and applied to solve so many different challenges whether it's hitting a race car around a track at 200 kilometers an hour to being able to extract value out of data to advance health care. They talked about Paige.ai, a new customer that they added in Q1 of FY19 who was able to take analog cancer pathology looking at slides and digitize that to advance cancer research. So a really cool kind of variety of use cases we're going to see on this show today. >> Yeah, I think, so a couple thoughts there. One is this, again I keep coming back to Pure's marketing. When you talk to customers, they cite, as I said before, the simplicity. Pure's also done a really clever thing and not a trivial thing with regard to their Evergreen model. So what that means is you can add capacity and upgrade your software and move to the next generation nondisruptively. Why is this a big deal? For decades you would have to actually shut down the storage array, have planned downtime to do an upgrade. It was a disaster for the business. Oftentimes it turned into a disaster because you couldn't really test or if you didn't test properly and then you tried to go live you would actually lose application availability or worse, you'd lose data. So Pure solved that problem with its Evergreen model and its software capability. So its simplicity, the Evergreen model. Now the reality is typically you don't have to bring in new controllers but you probably should to upgrade the power, so there are some nuances there. If you're mixing and matching different types of devices in terms of protocols there's not really tiering, so there's some nuances there. But again it's both great marketing and it simplifies the customer experience to know that I can go back to serial number 00001 and actually have an Evergreen upgrade is very compelling for customers. And again Pure was one of the first if not the first to put that stake in the ground. Here's how I know it's working, because their competitors all complain about it. When the competitors are complaining, "Wow, Pure Storage, they're just doing X, Y, and Z, "and we can do that too," and it's like, "Hey, look at me, look at me! "I do that too!" And Pure tends to get out in front so that they can point and say, "That's everybody following us, we're the leader." And that resonates with customers. >> It does, in fact. And before we wrap things up here a lot of the customer use cases that I read in prepping for this show all talked about this simplicity, how it simplified the portability, the Evergreen model, to make things much easier to eliminate downtime so that the business can keep running as expected. So we have a variety of use cases, a variety of Puritans on the program today as well as partners who are going to be probably articulating that value. >> You know what, I really didn't address the partner issue. Again, having a platform that's API-friendly, that's simple makes it easier to bring in partners, to integrate into new environments. We heard today about integration with Red Hat. I think they took AIRI. I think Cisco's a part of that partnership. Obviously the Nvidia stuff which was kind of rushed together at the last minute and had got it in before the big Nvidia customer show, but they, again, they were the first. Really made competitors mad. "Oh, we can do that too, it's no big deal." Well, it is a big deal from the standpoint of Pure was first, right? There's value in being first and from a standpoint of brand and mindshare. And if it's easier for you to integrate with partners like Cisco and other go-to-market partners like the backup guys you see, Cohesity and Veeam and guys like Catalogic are here. If it's easier to integrate you're going to have more integration partners and the go-to-market is going to be more facile, and that's where a lot of the friction is today, especially in the channel. >> The last thing I'll end with is we got a rain of confetti on us during the main general session today. The culture of Pure is one that is pervasive. You feel it when you walk into a Pure event. The Puritans are very proud of what they've done, of how they're enabling so many, 4800+ customers globally, to really transform their businesses. And that's one of the things that I think is cool about this event, is not just the plethora of orange everywhere but the value and the pride in the value of what they're delivering to their customers. >> Yeah, I think you're right. It is orange everywhere, they're fun. It's a fun company, and as I say they're alpha geeks when it comes to storage. And they love to be first. They're in your face. The confetti came down and the big firecracker boom when they announced that NVMe was going to be available across the board for zero incremental cost. Normally you would expect it to be a 15 to 20% premium. Again, a first that Pure Storage is laying down the gauntlet. They're setting the bar and saying hey guys, we're going to "give" this value away. You're going to have to respond. Everybody will respond. Again, this is great marketing by Pure because they're >> Shock and awe. going to do it and everybody's going to follow suit and they're going to say, "See, we were first. "Everybody's following, we're the leader. "Buy from us," very smart. >> There's that buy. Another first, this is the first time I have actually been given an outfit to wear by a vendor. I'm the symbol of Prince today. I won't reveal who you are underneath that Superman... >> Okay. >> Exterior. Stick around, you won't want to miss the reveal of the concert tee that Dave is wearing. >> Dave: Very apropos of course for Bill Graham auditorium. >> Exactly, we both said it was very hard to choose which we got a list of to pick from and it was very hard to choose, but I'm happy to represent Prince today. So stick around, Dave and I are going to be here all day talking with Puritans from Charlie Giancarlo, David Hatfield. We've also got partners from Cisco, from Nvidia, and a whole bunch of great customer stories. We're going to be right back with our first guest from the Mercedes-AMG Petronas Motorsport F1 team. I'm Lisa "Prince" Martin, Dave Vellante. We'll be here all day, Pure Storage Accelerate. (bright music)