Pure Storage CEO: ‘The Days Of Hard Disks Are Coming To An End’
‘We predict that there will be no new hard disks sold in five years,’ says Pure Storage CEO Charles Giancarlo on the company’s first fiscal quarter 2024 financial conference call.
Pure Storage CEO Charles Giancarlo is not going to let a slight dip in last quarter’s all-flash array storage business stop him from making a bold prediction that the spinning hard-drive business is about to end.
Giancarlo, speaking Wednesday to financial analysts during Pure Storage’s first fiscal quarter 2024 financial conference call, said during his prepared remarks that new flash technology such as Pure Storage’s latest offering, the FlashBlade//E, which is price-competitive with even the slowest 7,200-rpm spinning hard drives, means that flash storage now has the ability to compete in all areas of the storage market including secondary storage.
“As I’ve stated in the past, the days of hard disks are coming to an end,” he said. “We predict that there will be no new hard disks sold in five years.”
While such a prediction might be expected from the CEO of one of the IT industry’s largest producers of flash storage arrays, Giancarlo backed up his prediction by noting that the FlashBlade//E line, which was introduced in March as the company’s first array for unstructured storage, generated the highest all-time sales pipeline for any Pure Storage product.
As such, it is the first and only all-flash storage system that can address the secondary storage market at competitive prices to 7,200-rpm hard disk systems while using only one-tenth the power, space, cooling and labor required for spinning disk systems.
“But beyond the benefits of the E product line itself, it enables Pure to now compete for our customers’ entire storage environment,” he said. “It enables Pure for the first time to be our customers’ complete storage partner, something that our customers have been asking for years. The operational and economic benefits of Pure’s comprehensive storage portfolio are clear and overwhelming, and are based on sustainable technology and business model advantages.”
During the quarter, Pure Storage also saw the highest all-time sales for its Evergreen//One storage-as-a-service offering, its largest single orders for its Cloud Block Store technology for running storage in public clouds, and the release of a major upgrade to its FlashArrays’ unified block and file software, Giancarlo said.
“It’s clear that our continued innovation strongly resonates with our customers, whether it is for AI and machine learning, rapid recovery from ransomware, high-performance databases, electronic design automation and video editing, traditional or cloud-native applications, and now also for secondary storage environments such as content and media stores, enterprise imaging and even traditional backup in archive,” he said.
Giancarlo said Pure Storage is able to thrive because of four competitive advantages. First, its Purity operating system uniquely works directly with raw flash as opposed to competitors, which require more expensive and shorter-lived SSDs. Second, the Purity operating system works across Pure Storage’s entire product line from on-premises to the cloud compared with competitors’ use of multiple operating systems. Third, Pure’s Evergreen technology and services guarantee that arrays are always updated nondisruptively to the latest technology. Fourth, the company has a cloud operating model that is highly automated, orchestrated and available, he said.
Pure Storage has also made a bet on AI starting with its AI Ready Infrastructure, or AIRI, co-developed with Nvidia in 2018, Giancarlo said.
Since then, Pure Storage has continued to advance FlashBlade’s high-performance parallel architecture, he said.
“Pure continues to be the go-to partner for storage on AI projects,” he said. “For instance, we support more than 10 leading autonomous vehicle development companies in managing and processing the massive amounts of data required for their machine learning activity.”
Pure Storage works with Meta in that company’s AI research supercluster, or RSC, and is the chosen vendor for AI environments across a broad range of industries, including media and entertainment, pharma, health care, aerospace, transportation and financial services, Giancarlo said.
“We expect our leading role in AI to continue to expand,” he said. “But we are equally excited that the requirements for big data will drive even more use of high-performance flash for traditional bulk data.”
Despite the successes, Pure Storage expects the current macro environment to continue through this fiscal year, Giancarlo said.
“While we saw a continuing caution by enterprise and cloud customers in Q1, similar to what we saw in Q4, we also experienced enhanced demand for our most cost-effective solutions, especially Evergreen One,” he said. “Given all of our advantages, we remain confident that we will continue to increase our market share, outgrow our competitors and pick up even greater momentum, especially as our new products and services gain mindshare.”
For its first fiscal quarter 2024, which ended May 7, Pure Storage reported total revenue of $589.3 million, down 5.0 percent from the $620.4 million the company reported for its first fiscal quarter 2023.
That number included product revenue of $309.0 million, down from last year’s $401.2 million, and subscription services of $280.3 million, up from $219.2 million.
Revenue for the quarter beat analyst expectations by $30.0 million, according to Seeking Alpha.
For the quarter, Pure Storage also reported a GAAP net loss of $67.4 million, or 22 cents per share, which was higher than the net loss it reported last year of $11.5 million, or 4 cents per share. On a non-GAAP basis, the company reported net income of $24.7 million, or 8 cents per share, down from last year’s $79.2 million, or 25 cents per share.
The non-GAAP earnings beat analyst expectations by 2 cents per share, according to Seeking Alpha.
Looking ahead, Pure Storage expects second fiscal quarter 2024 revenue of $680 million and non-GAAP operating income of $90 million.
Pure Storage share prices fell by 61 cents per share, or 2.1 percent, to $28.79 by the end of the trading day Wednesday, but in after-hour trading rose to gain back most of the loss.