 From theCUBE Studios in Palo Alto in Boston, connecting with thought leaders all around the world, this is a CUBE Conversation. Hello everybody and welcome to this CUBE Conversation. You know, in our last breaking analysis, we worked with ETR and they put out a new forecast on IT spending for 2020. The consensus coming into 2020 was for a 4% increase. Based on the survey that worked they've done with CIOs, it's now down to 0%. Surprisingly, about 40% of the CIOs and IT practitioners that they interviewed said they expected no change in IT budget for 2020 and a surprising 21% said they actually expect to increase spending as a result of work from home infrastructure. Still a very large portion of the survey sample said they're going to decrease spending and that's why they're now calling ETRs, calling for a flat spending in 2020. Clearly, one of the challenges are those companies that are exposed to supply chain disruptions, whether it's manufacturing or retail or certain CPG or industrial. And with me today to talk about specifically supply chain within the storage market and within pure storage is Mike Fitzgerald who's the VP of Operations at Pure. Mike, thanks so much for coming on and talking about this important topic. Oh, thank you, Dave. Good to see you, good afternoon and good morning. So take us through what you're seeing. Well, first of all, what's your role? VP of Operations, you're in charge of supply chain, is that correct? Yeah, I have all of the supply chain, all of the manufacturing logistics distribution network at Pure. So what's going on with, what are you seeing in the industry, talking to your colleagues? I'm sure you're discussing this with your peers. Give us the high level in the macro and then we'll get into what's going on with Pure specifically. Well, certainly they're, within early January, we started to hear whispers out of the parties that there were gonna be some potential implications with the supply chain. So at that point in time, we did a lot of actions and activities at Pure to try to stay ahead of that, with speed being one of the key things that we wanted to make sure we were focusing on. But the industry as a whole, there was a lot of focus over the last several months and how do we make sure that not only do we understand what our risk is in the Far East slash China, but how do we mitigate that risk? And then as we've transpired and things have gotten to where we are now, is the risk has become more of a global risk in terms of a supply chain management role. So is it really, was it the exposure to China? Was it really NAN supply? Because that's been sort of zigging and zagging for the last several periods. Can you give us a little bit more color on really what you were paying attention to in terms of some of those hotspots? Yeah, well, one of the things we tried to do early on is the design of our supply chain at Pure, we've tried to diversify that. We've got a portfolio based footprint across the globe. Early on, we took a lot of steps to minimize the amount of reliance on China. A lot of that was driven by tariff implications, but certainly it's become our friend as we've gotten into the situation with the COVID. So a lot of actions and activity in that space to make sure that we've got a responsive supply chain in place from a global perspective. On the NAND, there's a lot of discussion, a lot of actions and activities in relationship to NAND. Certainly with the rising price, the market demands, what's going on with the supply versus demand ratios. But one of the things that we have a huge advantage of at Pure is that we build our own SSDs. So NAND as a component is what we're buying, which is not directly related to what I would call China shortages. A lot of the NAND is not built in China that we consume and put into our SSDs. So are you saying that Pure is not having any kind of supply chain disruption or you're managing that? What are you doing there specifically and how much of that is just sort of reduced demand versus your approach to supply chain? Can you address that? Yeah, we are not seeing a reduced demand right now. And one thing, kind of an overarching statement is we have plenty of supply available right now. We are in our portfolio, is it standard lead time? And so we've got product in place. As a matter of fact, we've seen an uptick in some of the demand streams, specifically in BDI, as well as in Pure as a service for less human element, the BDI certainly for the work from home type of scenario. So we're actually seeing what I would call more of an increase in demand with shorter lead times driving us to put product on site in emergency situations. That's interesting because a lot of suppliers that I've talked to have said, look, we are going to manage this by communicating increased lead times to our customers. You're saying Pure is actually seeing the opposite. You've got good supply and you're seeing strong demand and you're able to meet either on time or even an accelerated pace, did I get that right? Yeah, absolutely Dave. Actually over the last three days, the weekend, we've had three separate installs into locations on an emergency basis where we've responded in less than 24 hours and gotten product on site installed and saved the customers from running into situations where their work from home staff was not able to come up. You know, Mike, you've obviously got a lot of experience in the space operations and supply chain. You've done this for a while. Pure as a company does a lot of things differently. I've been following them since the early days of Pure but I have to be honest, I've never really dug into Pure's supply chain approach and any differentiation you have there. How would you compare Pure's approach to others that you've seen in the industry, maybe either historically or what you're seeing today? What are you guys doing that's different? Yeah, well, we've designed our supply chain to be a responsive supply chain with the recognition we're growing roughly 20% year over year. We're leaning into the supply chain to be able to not only enable that growth but to be able to enable surge. So some of the things that we do in designing the responsive supply chain, we talked earlier about making sure we have the right manufacturing footprint and that we've got the right risk mitigation so that we can have that portfolio approach related to diversity in this footprint. But we've actually staged material in the supply chain intentionally to enable us to be able to surge in response to demand increases. We've done the same with capacity. So we've actually leaned into our network and increased capacity to be able to absorb surges in demand, which is certainly paying off for us now in this situation where early on in January, we started seeing the signs that we were gonna have some demand constraints. So we went out and placed buys. We went long, is probably the best way to put it and tried to make sure that we were stocking up accordingly. So that if indeed there was a constraint that happened or a constrained environment that we had product available and that's what's paying off for us right now. Mike, is that a brute force decision making process? In other words, is it more gut feel from your tribal knowledge and experience at this? Are you using analytics in any way to inform sort of where to turn those knobs? Well, it's a little of both, Dave. Some of it is, I've been in this game for a while. I've seen these before. So we knew early on that it was time to pull the trigger. So we did. One of the advantages we've got at Pure is we're a small team, we're a nimble team. Decisions can be made today and implemented this afternoon. And that's basically the way that we did it. We got the right stakeholders together. We made some conscious decisions on what we were gonna do to try to mitigate the risk going forward, pull the trigger and now we have supply available and we continue to shift. I wonder if we could talk a little bit come back to that VDI. I mean, as I said at the top of this, we saw from the ETR survey data that work from home was one of the few areas that was really picking up. And it wasn't just video conferencing. It was VPN, it was networking bandwidth, it was security infrastructure to support that work from home capability, et cetera. And obviously VDI is part of that. I wonder if you could talk a little bit more about that not only in terms of what you're seeing for your customers what is pure doing in just in terms of remote support and other things, where are you focused there? Yeah, well, two things. I'll talk about the VDI solution. We've got solutions certainly that we're offering into the marketplace, which as I said earlier, a significant uptick in demand. And I think many would say that storage is the backbone of an effective VDI solution. And that's what we do for a living. We've also got several different solutions that we're implementing or having customers implement to simplify the implementation of the VDI. And one of our key things is we're simple, we're easy, we can put things in place quickly. As I said, we're loading data centers in hours versus days. The other question, Dave, about the support and I'll view that in two different areas. One, the implementation of existing product or the support related to that. Our support network is 100% up and running right now. We have componentry, we've actually forward stock incremental componentry into the depots to make sure that we're able to support our key customers. One of the models we've got is we're an essential business that is in the business of supporting other essential businesses. Critical infrastructure, focusing on that to make sure that if for some reason we lose a logistics channel in the country that we've got components there so that the support infrastructure stays in place and we're able to keep our customers up and running. So I wonder if you could talk a little bit about some of the assumptions that you're making here. I mean, we have a saying sometimes hope for the best plan for the worst in your business, that's probably apropos. What are some of the assumptions you're making just in terms of planning for the worst? Well, we're doing early on it was all about making sure that you could get the line of sight on supply and making sure that we've got capacity available. We did a lot of work on making sure that our alternate sites across the globe were able to absorb what we couldn't get out of our China suppliers for the time being when we had the constraints there. But at the same time, we are now recognizing as the COVID expands, the COVID, excuse me, the incidents that we're in right now, that there may be some demand delay or demand destruction in the future. So what is our risk profile and relationship to that? So that's something we're doing as well. But right now we're more focused on what is it going to take to make sure that we've got supply available for the customers that need supply now? So one of the, I mean, I'm sure you had a lot of KPIs but if you had to really focus in on the top ones, the two or three that you're really focused on that kind of, you look at every morning when you wake up, where is your focus in terms of KPIs? Right now it's, we're in a different environment than we were in, let's say three months ago. And right now it's product availability and that's in responsiveness to customer needs. In a normal environment, I would say it's cost, quality and delivery. That's a typical supply chain mantra, the three legs of the stool. But right now, certainly we're not minimizing the impact of having to have excellent quality. But what we're really focused on now is making sure that we are providing product into critical infrastructure, essential customer sites. So it's all about availability. I would say the majority of my day is focusing on what do we need to do to make sure we've got product available for the marketplace. Well, Mike, we're seeing the people around the world, not only in the United States, but globally, respond to this crisis. We're all doing our own part. Clearly you're, I assume before you were waking up, that assumes you were sleeping and I know you're not getting much sleep, but I want to thank you for coming on and sharing with us some of the things that are going on with Pure. Keep up the great work, your customers need this. I mean, storage is part of critical infrastructure. And really appreciate all the effort. So thanks to you and all the team at Pure. Well, thank you, Dave. I appreciate it. Have a great day. You too. It's great to have you and thank you, everybody, for watching. We'll keep broadcasting here daily from theCUBE Studios. This is Dave Vellante with this CUBE Conversation. We'll see you next time.