Pure and simple: Why Gartner's and IPOing storage biz's numbers didn't line up

People make mistakes

Pure Storage’s S1 IPO filing said one thing about its 2014 revenues while a Gartner report said something a hundred million dollars different. Why?

In more detail, Pure Storage’s S1 says revenues in the year to January 31, 2015, were $174 million. Gartner said in a Market Share Analysis: SSDs and Solid-State Arrays, Worldwide, 2014 report that Pure’s 2014 revenues were $276 million. There has been some speculation that Pure fed Gartner spurious figures to pump up its status. This is wrong.

Joe Unsworth is the Gartner lead analyst on SSA (solid state array) numbers concerning revenues, market share and so forth. He told us: “Simply put: I got it wrong. I have already been working on restating market share and that will likely happen next week.”

Wow, straightforward and on the chin. Quality guy.

Gartner’s SSA MQ comes with reader-beware warnings, cautions, and the Pure one read:

As a privately held and fast-growing company, there continues to be lack of transparency around its financial metrics such as revenue growth, cash burn rate and profitability.

What Gartner analysts do in this situation is the best modelling they can, using, for example, supply chain contacts. They can’t simply rely on any figures start-ups like Pure may supply, if they supply anything.

Joe said his method is this:

We review all public comments about financials and have offline models on quarterly sales (bookings and product revenues) as well as system units all done at by raw capacity for every vendor. I am fortunate that I track the entire supply chain of Solid State Arrays: chips, SSDs and systems, which allows me visibility into the supply chain (of course, this doesn’t help me know what is a PoC and what was actually purchased – a big challenge). Lastly, we speak to end-users daily and Pure is one of the leading vendors of interest with our customer base (evident through our inquiries but also analytics of end-users searching on Pure Storage on our website).

We send all estimates to vendors for review and publish under Gartner estimates.

Obviously modelling is imprecise and mistakes get made. He tells us: “I stand by methodology and also take responsibility for the mistake and will be correcting it.”

As I say, top quality guy and kudos to him, and Gartner. ®

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