Exclusive: Pure Storage CEO on the $5 billion goal and taking on storage industry behemoths

If data is the new oil, then the storage industry is a battleground. One that can also be sustained by innovation. Data storage tech company, Pure Storage CEO Charles H. Giancarlo iterates, ‘Data storage is high tech.” A repeated message that comes across from the company is making data storage an asset rather than a commodity. 

At the recently concluded Pure//Accelerate techfest22 in Los Angeles, California, the company announced the FlashBlade//S family of products with a new modular architecture built on uniquely co-designed hardware and software. That translates to disaggregating compute from capacity.

According to IDC, disaggregation of storage platforms provides more flexibility in creating highly efficient IT infrastructures. It not only enables administrators to assemble the right balance of IT resources for a given workload to minimize costs, it also allows them to perform upgrades on different resources independently as needed.

When the battle is with the behemoths in the storage industry, innovation acts as a catalyst that can help you gain consistent market shares. Therefore, Pure Storage also invests 20% of its revenue in R&D. But is equipping customers with simplicity and flexibility in data storage and management the end game? And how does that translate into success in newer markets?

In an exclusive interaction with Dataquest, Charles H. Giancarlo answers these points and also talks about the competitive advantage of Pure Storage, next big spending area and strategy for India and China markets.

Edited excerpts:

Talk to us about the innovation in storage. With 20% of your revenue being invested in R&D, what next challenge are you solving for?

To make data management much easier and simpler for our customers. At the same time make it reliable and secure. A lot of computing has been made very automatic, orchestrated and developers need access. data storage is the last to become virtualized. still very physical. We are trying to bring storage up to the same level of modernization as network or computing. Storage can be high performance or low priced based on developer needs. 

In 2018, you mentioned being on a plan to become a $2Billion company with a 4-year profitability. What is your number goal for the next 5 years?

In 5 years, we should be certainly more than a $5 billion company. We continue growing at a much higher rate than the rest of the industry. 

Your competition is with the behemoths in the storage industry. What is your competitive differentiator and how have you managed to consistently gain more shares in the market?

It is a David and Goliath story. We play a different game than our competitors. Our competitors for many years have consistently marketed and told the customers data storage was a commodity and focused on the lowest possible price to fit the requirements. Because of that, they reduced their own investment in R&D. 

We invest 20% of our revenue in R&D. We are competing by building the world's best products and by driving the technology in the industry forward. While our competitors are barely able to keep up with just the latest chip cycle. 

What we are showing by consistently outperforming the market quarter after quarter is that storage is high technology and customers care about advancements. Size isn't everything, right strategy matters.

What is the next big spending going to be on?

There are still gaps against individual competitors/ products. We want to get to satisfying 80-90% of the customers. We still have a feature gap that we need to invest in. 

Second, is an all-flash data center. Solid state storage is still relatively expensive as compared to magnetic storage. We are only just beginning with introducing the secondary tier. Eventually, we want to get more competitive with the third tier of storage that is inexpensive and continues to scale our market. Utilizing next gen flash requires a lot of technology.

Third, the cloud operating model allows the customers the ability to operate data like a big pool of storage regardless of where it may reside.

What is your strategy for newer markets and customers? What's your strategy for the India and China markets?

We are currently selling to almost 55% of the Fortune 500. We still have more customers to penetrate and deeper in their environment at the enterprise level. We have 10000 customers overall so we have a very broad mid-market and we are strong in it. We don't sell into small businesses. But the opportunity for us in those segments--mid market, enterprise, cloud--is big. We can grow for many years with just that as our target. 

China, we are very cautious. We support multinationals and a small number of native companies in China. We have to feel confident that there is a demand for the benefits that we offer. We are not going to sell at commodity prices because of the demand of the prices at that level. We tend to have a premium. China is difficult because of the intellectual property laws and the requirements for the companies in particular to share intellectual property once the reach a certain scale and that's not something that we will be interested in either. 

We are investing heavily in India. We opened a new development center in Bengaluru. We intend to scale that rapidly. India, with experience, is a bit of a challenging environment with extreme price pressure but we are starting to make inroads. 

We are excited about Western Europe. Our international exposure is still smaller than it should be. The Middle East is a completely new market for us and I see tremendous growth in the region, especially with some of the upcoming work with large data centers, solar power, etc.  

What influence will DeepTech have on data storage?

Data analysis will drive IT for a long time. Most data storage was sold into databases and file storage. Increasingly, now companies want to analyze all of the other unstructured data. Industries want to analyze the data and the intricacies. That's where the industry is going.

Containers and Kubernetes help the customers to develop in a much more agile way. It's allowing them to be more efficient. That is another opportunity.

Any acquisitions you are looking for for portfolio development?

The area we are most interested in is cloud operating model. We are looking at: Is there a technology that we can incorporate as an M&A that can develop the cloud operating model and especially in the area of containers and Kubernetes.