Pure Storage flashes post-IPO results: Get a load of our... revenues All-flash array startup Pure Storage enjoyed a pretty good first post-IPO quarter, with triple-digit annual growth, a double-digit sequential revenue rise, and lessening losses, as it secured hundreds of new customers. Revenues for its third fiscal 2016 quarter, ended 31 October, were $131.4m, beating analysts’ estimates, with …
This: "He said Pure will “invest aggressively in sales, marketing, support and our channel to maximise growth going forward". Pure said it ranks amongst the highest in customer satisfaction across the tech industry: its Net Promoter Score (NPS) is 79, higher than any other Enterprise Technology brand. The average NPS for B2B tech is 16."
I can find this in every article I read: Chris- do they make you copy/paste this in your articles about them every time or is that something you enjoy?
NPS.
As a vendor you have to volunteer to be benchmarked. Once benchmarked, joe public have to be premium members to see the most recent results. Every year there's a new set of benchmarks for those that care to drool over.
It's a bit like the Gartner MQ, you have to believe the hype before they let you see the Kool Aid.
I believe 88 was Nutanix score last year and there's "new and improved" Kool aid on the shelves now.
“for every $1 of initial product purchase, our top 25 customers on average spent more than $9 on new product purchases in the first 18 months following their initial purchase, up from $8 last quarter.”
Which tells you one critical thing: You'd better cut the best deal you can up front, for all the storage you can possibly afford, because you'll never see that pricing again. Instead you'll be treated to "upgrade pricing" and your negotiating position will be the one where you grab your ankles.
Not necessarily picking on Pure. Nimble and the others do it too.
“for every $1 of initial product purchase, our top 25 customers on average spent more than $9 on new product purchases in the first 18 months following their initial purchase, up from $8 last quarter.”
That's because they all run out capacity...It happens when you size for 6:1 and you get 3
Ive worked for various storage vendors and I think you are tarring us all with the same brush and ignoring the fact that we mostly sell through the channel. This means that we have absolutely no control over end user pricing. Just yesterday and by complete chance I saw some end user pricing for one of my customers where the reseller had almost doubled the price I'd given them. Needless to say we had words as doubtless he was telling 'his' customer that we were the ones hiking the price.
There might be a slight increase to recoup some of the loss leaders but in my experience, it is the channel which looks to make the most from future upgrades.
I suppose there is the other option which could be that all storage vendors offer statically discounted prices with no good deals at Q-ends, year ends, incentives? Whilst this might be preferred by some, it would spell the end of the initial good deal which despite what you might think is often not very profitable or sustainable business if you want a thriving, competitive and exciting storage market.
"Oh, you mean the channel you've set up where deals are "protected", and if my reseller is screwing me it will take an act of God to ever see a competitive bid?"
I can see your frustration. Yes, I will protect the price to the loyal and value adding partner. If I have done the selling to the end user however and want to use a partner for transactions only then I think 7-13% (cost plus not GP) margin is reasonable due to cost of money, credit lines and various other unseen elements of the sale.
If the partner has done the work, added value, conducted pre-sales design and helped the customer come to a beneficial end through implementation or migration then I think 15-30% (cost plus not GP) margin is acceptable depending on the circumstances.
If you feel that you are being ripped off then I would strongly recommend that you either ask for open book or specify that you want to have the costs leveled but please dont throw the baby out with the bath water; a thorough, diligent, skilled and customer oriented partner is worth its weight in gold and should be reasonably recompensed.
Hmm, that's not my experience with Enterprise channel sales. Pure employees have outnumbered those from the channel partner on most if not all calls and Pure seems to be setting the price. Same for EMC. Same for Cisco and any other company where we have to buy through the channel. Cisco seems to totally control the sales terms for any major buy. I remember our Cisco rep having to bless the quotes for our VAR. Couldn't get prices until he had processed it through Cisco's system. Many vendors are leveraging channel sales because they don't have or want to support the outside sales force or haven't built them them yet. Some stay with the channel to handle the post sales upgrades. Shortage of outside sales reps does not seem to be a problem for Pure.
I personally prefer to buy vendor direct. Generally better prices, better lease terms, less BS and more straight talk direct. There is also no issue of your friendly neighborhood reseller pushing the vendor that has the best sales incentives instead of what best fits your use case. For that reason, I also prefer to do my own research, find what I've determined best fits my needs, then engage sales for competitive proposals.
Unfortunately we're too small for many large vendors such as EMC and Cisco, but strangely, not Oracle, Dell, IBM, HDS or HPE. We can go with channel partners
"Revenues for its third fiscal 2016 quarter, ended 31 October, were $131.4m, beating analysts’ estimates, with a GAAP net loss of $56.5m."
So they need to lose $56M to be able to move $131M out the door.
Not exactly sure why they are jumping with joy on these results, but what do I know...
Sorry - i'm not a financial analyst but are these not bad results? They are losing money hand over fist and their next quarter results are predicted to be single digit growth. This doesn't sound good to me.
Maybe it's me but giving stuff away sounds like a bad strategy. And cloud - what cloud? they sell storage
These are very good results for Pure and give a bit of hope for those of us at other smaller competitors who are constantly hearing how tech is consolidating and we will be ‘out of business soon’.
Firstly, when companies are young they are not going to report a profit – they are not there to profit they are there to grow, gain footprint and customers. This is why companies are made and shamed on YOY growth, not profit.
Secondly, 167% YOY growth is excellent. While it’s true that they are small and it’s easy to hit big growth numbers they are not THAT small. Their quarterly revenue is larger than Nimble & Violin’s quarterly revenue’s combined…….and with about $30m to spare. Or to put it in another way over 10x the quarterly revenue of Violin. Nothing wrong with either company; just a comparison of size.
Remember when Gartner said Pure were $276m revenue but they were actually only $176m a year and the whole industry lost their mind? Well they’re just 20% away from doing that $176m figure…..*in a single quarter*…not a year….….and it’s only a few months away from that fracas.
Hopefully this will turn the IPO bandwagon back on.
This post has been deleted by its author
The Register 
Biting the hand that feeds IT
Copyright. All rights reserved © 1998–2024
