back to article Another disappointing quarter for Pure Storage as expanded sales team fails to close large deals

Pure Storage sales for its first fiscal 2020 quarter grew 28 per cent on last year, but losses were deeper than expected as those sought after large enterprise wins eluded an expanded salesforce. Revenues were $326.7m, below Pure's own guidance for the quarter ended 30 April, as was the loss of $100.3m. This happened in the …

  1. Anonymous Coward
    Anonymous Coward

    Slowing Down

    There comes a point where the wheel doesn't go any faster despite the addition of new sales hamsters.

    So it's time to start taking hamsters off and reduce sales costs which is most likely what is going to happen.

    Quarterly growth was at 21.5% not 28% because in Q4 there was deferred revenue of 15-20mil that was "pinned" on problems with one of the company's suppliers. It is now obvious that it was more than just that.

    Pure appears to becoming opportunity constrained with very little help from other products.

    1. Anonymous Coward
      Anonymous Coward

      Re: Slowing Down

      I'm so glad I left the storage field a couple years ago. I've been dealing with storage since the late 90s, from EMC Symmetrix all the way up through today's hybrid and all-flash arrays. It was a good run and an interesting field, but it's become too crowded, too commoditized, and too many potential customers moving to the cloud.

      When I hear of companies like Pure (whom I didn't believe in at first, but turns out their focus-on-the-enterprise strategy did pretty well) putting out these kinds of earnings reports, I think, yeah time for you to get acquired by one of the big boys and fade into the sunset.

      That's an exaggeration of course - I don't think Pure is going anywhere. But I do think the rocket ship ride is over, not just for them, but for storage vendors in general. And if you're an early stage startup looking to break into storage...WHY? I don't see why any investor would waste good money backing a company in an already crowded and contracting field when there are plenty of opportunities in the SaaS and cloud spaces.

      In my opinion, storage is a dinosaur now. The ride is over. Move on.

      1. Anonymous Coward
        Anonymous Coward

        Re: Slowing Down

        You talking about the 'rocket ship ride' where they sold a bunch and grew really fast and still lost a bunch of money?

        1. Anonymous Coward
          Anonymous Coward

          Re: Slowing Down

          Most, if not all, startups lose tons of money in the beginning. I bet the likes of Amazon, etc, did too. I'm talking about the rocket ship ride that at least lets the average employee make something off their time spent there (not talking about founders and execs, who almost always make something regardless if the company is successful or not) in the form of an IPO or acquisition.

          The trick is to get off the rocket before it crashes and burns, because so many do in the form of horrific earnings reports which tank the stock and leave people empty handed (again, except for founders and execs, whom always seem to land on their feet).

      2. Jo_seph_B

        Re: Slowing Down

        All the big boys have already purchased a vendor like Pure, or have their own offerings. Think they've missed the boat. Shame as the product is a good one, Figures like this can't be sustained for long so something will have to give.

        1. Anonymous Coward
          Anonymous Coward

          Re: Slowing Down

          I think there has to be something other than just the storage products to make for a compelling acquisition. Take the Nimble Storage acquisition by HPE as an example. I firmly believe the only reason HPE purchased Nimble was for InfoSight, not the storage products. I think the analytics, years of metrics and telemetry, and the ability to integrate all that into HPE's other offerings meant far more than Nimble's storage technology.

          If Nimble didn't have something as compelling as InfoSight, I don't think they would have been acquired, and would instead be plodding along with a low single-digit share price.

          So what does Pure have that would make for a compelling acquisition, other than the storage product? Nothing that I can see, although to be fair, I don't keep up with storage vendor's offering much anymore. But I think it would take something more than all their storage kit combined to whet the appetite of an acquirer. In this age of cloud, analytics, SaaS, etc, on premise storage kit is not where it's at.

          1. Gothmog

            Re: Slowing Down

            Infosight is absolutely the reason HPE bought Nimble, and the fact it is a pretty decent platform in it's own right is more in the way of a bonus. HPE can't roll Infosight out to their other platforms quick enough, and are pretty open about Infosight being the main reason for the acquisition.

            Pure have the Evergreen concept which was absolutely compelling back in the day when no-one else was offering it, but now pretty much everyone else is offering the same it has become less of a factor. Not sure who could actually acquire Pure now and have a sensible reason for doing so (and who could afford it). Fujitsu-Siemens maybe....? HPE - no, DellEMC - no, IBM - no, Cisco - no... the list grows thin.

  2. dinsdale54

    Better have a cloud strategy

    After 20 years at storage vendors where you were competing with other storage vendors the competition is now cloud. Previously you just had to be better than the incumbent storage providers, EMC, HP, Dell NetApp, IBM etc. That's usually quite achievable for a startup with a half decent product - Pure has done this exceedingly well.

    Now you are competing with AWS, Azure, Google etc and the move from CapEx to OpEx. Pure's announcement about targeting Dell/EMC refreshes is a tougher proposition than it was even a couple of years ago. Several of the existing storage vendors have better cloud offerings than Pure does so for companies moving that way. they are less likely to ditch the incumbent for another non-cloud vendor.

    If the growth slows without a plan for being profitable, the share price is going to take a battering.

    <edit> I just checked the after hours trading. The share price has taken a battering.

  3. J. Cook Silver badge

    I do hope the typical corporate trend of "we need to show increasing profits EVERY QUARTER!!!11oneoneoneoen" replete with frothing at the mouth gets over soon, otherwise there won't be anyone left to sell stuff to the few companies that *must* stay on prem with their data for various reasons.

    1. Anonymous Coward
      Anonymous Coward

      Agree...it's making good companies and good execs overlook long term viability for short term satisfaction

    2. WYSIWYG650

      profit for ANY quarter

      Has Pure ever made a profit in ANY quarter? me thinks not, so your comment is misplaced and illogical. They will be aquired for the decent technology they have if they dont learn how to make, you know...money!

  4. Anonymous Coward
    Anonymous Coward

    Prune Storage

    Never liked them as a company, never liked their culture, didn't like the way they overstated their numbers to Gartner just before the IPO and there am quite happy to see them suffer. Although, sadly, the guys at the top will still be rich and it will only be the small peeps who suffer. But hey, capitalism.

    /StorageTroll

    1. Anonymous Coward
      Anonymous Coward

      Re: Prune Storage

      Its a good point. There was never a 'warm' feeling about Pure. The bastard child of EMC culture. Win at all costs, drag every last breath from the people, fuck everyone over to get what you want etc. A bit like Nutanix.

      Can a 'nice' company succeed, whilst being 'nice' to its customers, employees and its partners?

      NetApp was once 'nice'.

  5. Kev18999

    Every big CIO at a major corp wants to cap storage costs and move them to the cloud. The big storage costs has always been user content such as home drive, emails, downloads, app data etc. With Office 365 + OneDrive, more company wants to move this bottom-less pit over to the cloud and storage freed. The biggest cost imo is the total cost of storage. Your SAN, NAS, backups, and extra redundant hardware. The cloud will wipe away majority of these running cost.

    1. WYSIWYG650

      driving cost down

      The cloud at Enterprise scale is certainly not cheaper than HW. The reason org's choose the cloud is agility and speed. Many come back to hybrid/cloud once they realize they dont need the data in the cloud and can duplicate the agility with containers and other devop technologies.

  6. Anonymous Coward
    Anonymous Coward

    One hit wonder

    It's enterprise so it take a few years (maybe even a decade) to realize that Pure has ONE product - their FlashArray line. All the other "stuff" is just past prototype stages (maybe a few real customers). They have been working on FlashBlade since 2013 and it's still not the hit that FlashArray was. They're struggling to find a second act and looks like time is up. All the marketing fluff about cloud, backup, NVME, etc - there is nothing there...if it was a real product with a go-to-market plan, we would start seeing real traction. Their "enhanced" partnerships with Commvault, Veeam, Veritas, Cisco - all dying companies. Sad to see Pure (a previous up and comer) reduced to alliances with the old guard.

  7. TheNotSoEvilEngineer

    Problem is, once its in, I don't make any more sales.

    Once a Pure storage is installed, I basically never make a storage sale to that account again. Back in the Day's of Clariion / VNX / VMAX, storage adds, performance upgrade, and forklift upgrades were super common and an easy bread and butter item. Now, with SSDs, dedupe and compression, and evergreen.... once I sell pure into an account, aside from hoping I don't get cut out of a service renwal, thats it for revenue from storage in that account. Customers are happy, so thats good, but theres no churn for new gear. So, from Pure's side, they are going to need a constant supply of new accounts and reps courting them to make new array sales. Aside from that, they'll only have the revenue from renewed service agreements for their bottom line.

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