Pure Storage Completes IPO, Looks Ahead To Competitive All-Flash Storage Market

Dave Hatfield (center), president of Pure Storage, surrounded by company execs at the NYSE.

Pure Storage is the IT industry's newest publicly listed company after completing the first tech company IPO of 2015, and now can go back to focusing on the increasingly competitive all-flash storage market.

Pure Storage, under the ticker symbol "PSTG," late Tuesday night priced its IPO at $17 per share, but investors showed they were not as excited as the company had hoped by opening the Wednesday trading at about $16 per share, with just a few-cents-per-share uptick close to the end of the trading day.

The slower-than-hoped-for start for Pure Storage does not reflect the otherwise bright future ahead for the vendor, said John Woodall, vice president of engineering at Integrated Archive Systems (IAS), a Palo Alto, Calif.-based solution provider and Pure Storage channel partner.

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[Related: Pure Storage Prices IPO, Looking To Raise Up To $450M]

"There's been a lot of buzz around Pure Storage, in part because it's been a dry year for tech IPOs," Woodall told CRN. "People are happy to see something moving forward. Pure didn't get a 'pop.' But it's still a significant milestone. They raised a great deal of money, which is good for them."

The Pure Storage IPO shows that tech industry watchers may have to rethink how they look at "unicorns," or startups that have paper values of more than $1 billion based on pre-IPO equity investments, Woodall said.

"It's so hard to innovate in the tech space and bring a company to profitability," he said. "It's clear that Pure Storage is growing at a high rate. But the IPO shows that the new norm for 'unicorns' will be it will take a lot more funding in the future for tech companies to come to market."

Dave Hatfield, president of Pure Storage, told CRN that his company is pleased with the outcome of the IPO, and that the company is still early in its life as a public company.

Hatfield, who called CRN from the New York Stock Exchange where he and his team pressed the button to sound the buzzer that opened the day's trading, said Pure Storage has a huge $24 billion market it needs to address.

"We believe all the mechanical disks in the market will move to solid state," he said. "Our business grew 300 percent over last year. At the same time, we are focused on driving operational efficiency. For the last couple of quarters, for every $1 we invested, we got $1.50 in returns."

Hatfield acknowledged that Pure Storage is in an extremely competitive environment, with a large number of startup all-flash storage array vendors on one side and legacy storage vendors moving quickly into the all-flash array market on the other.

"Our primary competition is the 25-year-old spinning disk market, and not any particular competitor," Hatfield said. "We're seeing the big legacy vendors validate the observation that customers are moving to flash storage. But we believe we can be No. 1 in this space. We believe we can grow faster than most.

"We wouldn't be in the fight if we didn't have an innovative model," he said. "Our combination of business model and technology platform is why people are choosing Pure Storage."

It is also important for Pure Storage that it has a solid channel focus, Hatfield said.

"Customers know they have a choice," he said. "The ability to have the reach and the services capabilities of our partners helps us expand our reach across multiple markets. The value proposition of our technology for universities or hospitals is the same as for the largest financial organizations."

Those sentiments were echoed by Pure Storage CEO Scott Dietzen who, in a Wednesday blog post, thanked everyone he said contributed to the company's success, including channel partners.

"Thank you for your willingness to innovate along with Pure in the pursuit of better serving our mutual customers. We know many of you have experienced substantial pressure to stick with incumbent vendors. For bucking that trend, you have our commitment to continue to strive to make every deal win/win/win -- first a win for the customer; second a win for you, the partner; and then third a win for Pure -- as well as our commitment to continue to fulfill nearly 100 percent of business through partners," Dietzen wrote.

IAS' Woodall said Pure Storage's commitment to the channel remains strong.

"We've seen consistent support from the channel all along," he said. "Pure is a great company, with great products and a great team."