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Do you NVMe? Pure Storage smirks at rivals amid 34% sales surge

Chucks cloudy dedupe biz StorReduce in the trolley

Pure Storage may still be losing tens of millions of dollars each quarter but has signed off on its first acquisition as a public outfit, buying cloudy dedupe biz StorReduce.

The California-based firm, founded in 2014, will help Pure tap further into hybrid cloud integrations to manage large-scale unstructured data.

Western Digital uses StorReduce's tech in its object storage products, the software runs in an appliance or a VM, and nodes can be clustered with a global deduplication capability.

"StorReduce's technology is 100 per cent software and was designed to be cloud first," said Pure CEO Charlie Giancarlo on a conference call with analysts.

StorReduce tech will be added to Pure's FlashBlade, which currently has no native dedupe capability. The financial terms were undisclosed but StorReduce secured seed funding in 2015 estimated to be close to $400,000.

The transaction was confirmed by Pure as it rolled out the latest results for Q2 ended 31 July 2018: turnover jumped 37 per cent year-on-year to $308.9m, easily beating the Wall Street consensus of $301.3m.

Product sales were up 34 per cent on a year ago to $241.1m, and support subscription sales came in at $67.8m, up 51 per cent. Some 74 per cent of revenue came from US sales and the remainder from international sales.

Pure added 400 new customers during the quarter, taking the total to 5,150. It released the full X family in the quarter, which enables NVMe across the entire product line – more than half of shipments in the quarter were NVMe.

"In contrast, our competitors are just beginning to bring their NVMe offerings to market and only in their higher priced products," said Giancarlo. The "vast majority" of revenues will be NVMe before the current financial year is out, he added.

It was also a strong quarter for FlashBlade, said the CEO, with AI and rapid restore the "major use cases". Pure also said there was "strong customer and channel interest in AIRI", the AI-focused converged infrastructure thing.

Aaron Rakers, a senior Wells Fargo analyst, said Pure beat strengthening competition, with "NetApp's all-flash growth at 50 per cent year-on-year and EMC becoming increasingly aggressive with sales investments and new PowerMax and XtremIO X2 platforms".

Pure added 505 heads to the organisation in Q2 versus the same period a year ago, taking the total to 2,450. Operating expenses went to $261.3m, up from $209.07m, leaving an operating loss of $55.2m, albeit better than the operating loss of $60.85m a year earlier. Interest expense and tax left Pure nursing a net loss of $60.12m versus a net loss of $58.4m in Q2 '17.

Next quarter, Pure expects revenues of between $361m to $369m, a 31 per cent increase year-on-year, with full-year revenues estimated to be between $1.35bn to $1.36bn; a 33 per cent increase year-on-year rise. ®

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