Data Center & Storage Solutions

Pure Leads Charge of Flash-y Storage Startup Upstarts

“Your chance to upset the apple cart rests with being tech disruptors,” says Pure Storage CEO Scott Dietzen, discussing his company that has the incumbents of the $20bn-dollar enterprise storage industry in a flap.

Dietzen has had a slightly unusual career arc. He’s really a techie and his career has seen him hold senior engineering/management positions at Zimbra (acquired By Yahoo) and BEA Systems, which on the first coming of the consumer internet was seen as owning the “operating system of the web” in WebLogic. Now he leads one of the most closely-watched companies in B2B tech.

Pure takes an inflexion point in enterprise storage, using Flash solid-state technology rather than disk media, but capitalises on that change with software that compresses and de-duplicates data to make the much more expensive medium not just faster but affordable as an alternative to spinning platters. Also, Pure claims, the learning curve for admins is simplified “like going from a cockpit [in a classic enterprise storage array] to a standard car” so staff can get up to speed fast.

Storage being storage, his company might not have the buzz of a Pinterest or even a Dropbox but it’s a formula that has given Pure a $1bn valuation by venture capital measures (more of which later) and has put the San Jose-based company on the A-list of pre-IPO Silicon Valley companies.

“Flash is an ideal disruptor,” he says, returning to his theme. “Today’s code is all wrong for Flash and everything needs to be rethought in the world of Flash. We set out to do something profoundly disruptive and went into it thinking [the market leaders] with their giant sub-zero refrigerator products deserve to be disrupted.”

Dietzen is quietly spoken but precise in his language as befits a Carnegie Mellon computing science graduate. Like any scion of the Valley, he can cite The Innovator’s Dilemma, the Clayton M. Christensen tome that has become scripture among entrepreneurial technology innovators (and indeed those defending against the same). He reminds me that the book uses spinning disk media as one of its points of reference, noting that those who fail to adapt to new technological opportunities will be doomed to obscurity. Today, the spinning disk versus Flash dilemma is asking “stick or twist” questions of storage incumbents like EMC, NetApp and Hitachi Data Systems. Do they want to perpetuate their markets for as long as possible at the risk of losing share to newcomers, or do they grasp the new opportunity even though it disrupts a gravy-train business?

To adapt a Hollywood cliché, Flash memory isn’t new and in fact it might be the longest ever case of an overnight success story. Pure’s insight that Flash could speed up Big Storage was really a continuation of those that have seen how the B2C market can inform B2B. If Flash worked to make digital cameras, smartphones and laptops store and retrieve data faster then why not enterprise storage arrays in datacentres? “Flash on iPod: that’s when it clicked that it’s not just for consumers,” Dietzen says.

Flash was particularly relevant at a time when datacentre performance is under a piercing focus. As Dietzen asks, while everything else in the datacentre moves at the speed of light, why have moving parts seeking and rotating 90% of the time and slowing down the race to information?

That situation has provided Pure with the mother of all sweet spots: datacentres across the world replacing disk media with faster Flash to get better performance, especially for time-sensitive environments where latency and response times matter. Archived media and certain other usage models will stay on disk (and tape) longer but Dietzen believes the total addressable market for Flash is about half of all enterprise server storage needs.

Today, Pure and a cabal of others are using the technology to create new frontiers against the giants. How are the big boys responding?

Even those giants have had to adapt to a certain extent, positioning Flash as a point solution while attempting to keep clear blue water between new and old wares. “It was heresy and now we have EMC and NetApp [selling Flash],” says Dietzen.

Another answer might lie in the fact that EMC is suing Pure over alleged theft of intellectual property and trade secrets, but a series of questions from me returns a matching sequence of “no comment” responses. Dietzen will only concede that the giants are “definitely becoming more aggressive”, and says he jokes with EMC’s XtremIO all-Flash array team that “we’re your best friends because once we’re in the account you get a chance to sell.”

The combination of lawyers and imitation as the sincerest form of flattery is classical in tech, but Dietzen believes that Pure has a two-year technology leadership position. Another symptom of success is incessant IPO rumours. Pure’s hyper-growth is comparable to the bull runs of the likes of Netscape, Siebel Systems, Cisco, Data Domain, NetApp and others in their pomp: a screaming 50% sequential quarter-on-quarter revenue rise, like an aeroplane taking off. These are numbers that will make any red-blooded Wall Street warrior’s eyeballs sweat.

Again Dietzen declines to comment on when a float might occur but the smart money is on the near term. Dietzen will say that the company is already run as if it were public and already has the scale to have floated already. The management team has been bolstered to support the CEO with hard-won experience. Asked about revenues, he provides another series of non-committal responses but the word on the street suggests that Pure could already have well over $100m annualised. Dietzen does not demur when I suggest that current rates of progress surely mean that even Pure’s valuation at $1bn is outdated.

Of course, Pure is just one of a group of datacentre upstart startups but Dietzen believes it is the leader. “I think of Nimble Storage as a peer company. They’re growing fast and we’re growing faster at a similar scale. We don’t have any peer companies growing like that.”

Nimble might be growing at 30% each quarter, Dietzen says. Nutanix, another newcomer valued at $1bn, claims it is growing at 40% per sequential quarter and says that that trajectory is on the rise.

Dietzen admires both companies but says he is sceptical of those that are combining Flash and disk media.

“Anytime you mix Flash and disk the disk is so much slower than Flash that you will make the product [much] slower.”

As for the all-Flash gang, Dietzen contends: “Flash hardware vendors that don’t have strong software are not competitive so their growth rates are not what you look like in an IPO.”

And there is plenty more in scope for Pure. He says markets like NoSQL database pioneer MongoDB can tip to Flash quickly and that, while the home-grown datacentre approach taken by Google and Amazon make them “very tough nuts to crack”, the rest of the cloud datacentre world presents sizeable opportunities. LinkedIn is already a customer.

But it’s not all “upside and gravy” as the Americans say. Pure might need every cent of its capital to manage unnerving hyper-growth: the company hired 300 people last year alone. Also, it gives away proof-of-concept loans so a lot of product goes out of the door without guarantee of a near-term return. R&D isn’t cheap and the storage incumbents are not known for softly, softly approaches to new kids on the block. Also, another contender, Violin Memory, has had a troubled start to life on the public markets, losing its CEO and seeing its value plunge.

But Pure looks to have stronger legs and for now at least, Dietzen and co. are in that classic Silicon Valley golden moment where it’s possible to change a market and win the glittering prizes that are given to successful disruptors. There are no certainties here as regards winners and losers among vendors, but the fall-out will be good for enterprise buyers beating a path to the doors of those building the new mousetraps of the datacentre.


Martin Veitch is Editorial Director at IDG Connect


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Martin Veitch

Martin Veitch is Contributing Editor for IDG Connect

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