Posts by El Storage Master

Quick as a flash: A quick look at IBM FlashSystem

Re: I think I know the answer

IBM's de-dupe box is the A9000. Study up a bit.

Pure Storage flashes post-IPO results: Get a load of our... revenues

Re: I'm confused

QoQ matters as well in a non-seasonal business, and this is. Don't kid yourself. Look at NBML when they slipped QoQ guidance.

Straight from the horse's mouth: It's October 7 for Pure's IPO

How to play Pure's IPO

It is very simple since I work in the space and I have competed against Pure about 100 times over the last few years. This IPO will easily halve in market cap 6-9 months out just like NMBL did. I am not going to get into the why here. I am a very versed trader (third generation trader, with 25 years of trading experience). I could get into the why for a long time but I rather get into the "what" and save the non-finance/non-market readers a lot of time.

Here is what I am going to do with $50,000.

About 1 month out, PSTG will become marginable. Shortly after, smart money will create a huge short inventory. 3-5 months out from the IPO date, you will see +20% of the float short if available. I plan on getting more greedy given this is the short of a lifetime. About 6 weeks after the IPO, I am going to buy out of the money puts, 40-60% out of the money depending on how the IPO goes the first 6 weeks. I will buy some contracts dated 6 months out and other contracts about 9 months out, so I can get 2-3 reports in during my contract length. Yep, $50,000 of out of the money puts, about as risky of an investment you can make.That is how much I believe PSTG will be a poor IPO due to its undeserved valuation and bleed-cash-for-growth business model. It will struggle to maintain a $1bil market cap 9 months out as a public company that cannot behave as it behaved to get to this point.

HP one of the fairest, claims Gartner's magic quadrant on the wall

Re: Gartner (GG) SSA Market analysis & MQ includes IBM V840 and V9000! Why !? And HP 7200 !Why?

I will politely intervene so that you do not confuse other readers.

1. I have to back Gartner in how they exclude Hitachi and Dell. I do not normally back Gartner, but here is what needs to be understood. An AFA cannot have an internal controller that is BOTH flash-optimized and disk-optimized at the same time. Any internal controller that supports disk will positively, absolutely, bottleneck flash media. Therefore, you cannot consider any system containing this type of controller, as an AFA, because it is really designed for HYBRID. The Hitachi boxes, even with all-SSD configs, are large and bulky, and look nothing like all of the other vendors' small form factor HW boxes. Again, Gartner got this right.

2. IBM's v840 and v900 is a self-contained AFA that is flash-only media. It has absolutely no HDD in it and you cannot put HDD in it. What you are seeing is that IBM has SVC technology that can be used in front of the v840 and v9000 to leverage other HDD-based storage in an environment, even other vendor's storage.

IBM leaps aboard the software-defined stuff bandwagon

Re: "leaps" isn't right, "leapt" doesn't really do it either.

Except, they do have some awesome products, in case you are not awake watching. TMS is the best all flash array around right now, and why IBM has taken over market share leader with 25% of AFA market. The guy above you just pointed out that IBM is not new to SDN. If we learn the lesson that Amazon, Google, and Facebook taught the world when they took SDN binding together SSDs for the world's first and most known cloud infrastructure, it makes sense that traditional SAN is not what will lead IBM to the holy land in the data center, and that SDN, converged, and flash will. They have made some smart bets that will likely get them further into the future, faster than the other traditional SAN players.

IBM storage revenues sink: 'We are disappointed,' says CEO

Re: The hollowing out is well underway

Great Steve Jobs quote for this situation. It rings true with legacy disk-based storage and the vendors that still profit off of it, and try to cling on and not cannibalize it. EMC, Hitachi, NetApp, HP, and Dell are all in this category. Lot's of money being made still on disk and the SW that runs it, and the years out maintenance, etc. Does IBM also want to remain in that category of trying to cling on to the past for fear of cannibalizing the legacy install that they have? I am not sure they do and I am not sure they don't know it. The TMS acquisition, and its current growth trajectory, seems to be taking them towards cannibalization faster than any of the Big Six vendors, while companies like EMC and Hitachi are going to the middle form factor slowly to preserve appearances in the data center. If they (EMC, Hitachi, NetApp, etc) go too fast they fear, that means their disk will look really out of place compared to the tiny flash arrays of TMS and Violin, and that will be bad for business. If 5 big oligopoly-like vendors all have strategies to go do the middle slowly, IBM may really do something disruptive by being 1st to cannibalize. The latest Gartner report for all-flash arrays show IBM now has market share lead at 25%. I would argue that IBM is ready to cannibalize and disrupt the other 5. The fast and small plumbing will win the OpEx wars now that the flash CapEx has drastically lowered. Violin and Pure are getting this message out and people are listening. They are too tiny to disrupt the Big 6 though. IBM is not, and they might already be humming to the tune of this Steve Jobs' quote. Let's see how far they are willing to take this flash thing.

Reg man has the cure for IBM storage: Just swallow 10 firms

Re: IBM Cures

Your hair must be super gray if you think flash (or other high-end) storage is happening at $750/GB! Do you realize the street price of most all-flash arrays are below $10-15/GB (raw, without de-dupe) at this point? Do you also realize how smart of an acquisition TMS was for IBM, and how this proves they are capable of making further great acquisitions? Being less worried about the future of your legacy disk business than every other vendor is, happens to be IBM's biggest strength right now.

Violin strings up cheaper instrument: 17.5TB flash box for $100k + change

I think you are referring to Pure, which is still VC-backed and bleeding cash. Violin already IPOed last Fall, raised $163mil and has 6-8 quarters of cash at current run-rates. The company is projecting profitability in 2015.

Pure Storage opens wide, VCs shovel in yet MORE millions of $$$

Anonymous Coward, the fundamental problem you have arguing with Trevor is that you know what you are talking about, and he does not. Pure was convinced to do the Series F, dilute the heck out of the employees, and be swayed towards M&A versus an IPO. Violin Memory's experience was staring Scott Dietzen right in the face, and that is what happened here. He needed to raise money, so he had to do it this way. If they show the street their statements, they go the way of Violin Memory for the next 4-6 quarters. They are more likely to go M&A, where common gets conceded more against preferred, and they may never have to show the public how bad their run rate is/was/will be. Any Pure employees still excited after an F round clearly have no understanding of what just happened to them.

Re: 10x?

Was there emotion? I was simply trying to correct someone riddled with so many misunderstandings. I went for the low hanging fruit, but I could spend many more posts trying to help you. Not sure I will be able to do so though.

I have an extensive background in venture capital. 10x is your thing. There is no rule.

Your valuation assessment of Pure is quite ridiculous, especially given they will never achieve great margins as a purpose-built hardware solution. This company is bleeding cash for growth. Once they show the world how much cash they are bleeding, their valuation will look much more like Violin Memory's, and nothing like the one you are predicting.

10x?

Politely, you are inventing data here.

Go into Thomson's/Dow Jones' VC databases (VentureExpert/VentureOne). Out of 10 investments, here is what VC investments look like over a 10-year placement period.

3 fail

3 drag on painfully

2.5 get acquired via M&A (and not always for a profit)

1.5 go IPO (this is growing due to secondary market activity)

Nowadays, many VCs can get a small piece of an IPO via the new secondary markets hubs (SecondMarket, SharesPost, etc.). The reality is though, that most VCs don't even bat .350 when it comes to M&A/IPO activity on traditional rounds (not including secondary market tranches in this .350). The great ones may go 2 for 10, or 3 for 10 on IPOs, but the reality is most don't even average more than 1.

VC's get out of bad companies all of the time for a loss. They get out for 1x, they get out for 1.5 x, they get out for less than 10x all of the time, and every once in a while, they hit a grand slam. That is VC investing. For you to say 10x, as a rule of thumb, is very uninformed.