 Live from San Francisco, it's theCUBE, covering Pure Accelerate 2017, brought to you by Pure Storage. Welcome back to San Francisco, everybody. This is Dave Vellante with David Floyer, and this is theCUBE, the leader in live tech coverage. We go out to the events, we extract the signal from the noise. This is Pure Accelerate 2017. This is the second year of Pure Accelerate. Last year was a little north to here, at right outside AT&T Park. Pure, it's pretty funny. Pure chose this venue. It's like this old rusted out steel warehouse, where they used to make battleships, and they're going to tear this down after the show. So of course the metaphor is spinning rust, old legacy systems that Pure is essentially replacing. This is like a swan song goodbye to the old days, welcome in the new. So very clever marketing by Pure. I mean, they did a great job setting up this rusty old building. Hopefully it doesn't fall down on our heads. And so, but let's get to the event. The messaging was very strong here. I mean, they pull no punches. You know, legacy, slow, expensive, not agile. We're fast and simple, come with us. Of course, the narrative from the big guys is, oh Pure, they're small, they're losing money. You know, they're a little niche. But you see this company, as I said earlier, when Matt Kicksmuller was on, they've hit escape velocity. They're not going out of business. Okay, there's a lot of companies, you see them. They're making a profit. Yeah, you read their financials and you say, uh-oh, this company's in deep, you know what. No, they're not making a profit yet, Pure. They are projecting to make a profit in the next six months. But they basically got a $525 million in the balance sheet. Their negative free cash flow gets them through by my calculation the next nine or 10 years because they have zero debt. They could easily take out debt if they wanted to, growing at 30% a year. They'll do a billion dollars this year, $2.4 billion market cap. They didn't have a big brain drain six months after the IPO, which was really important. It was like, yep, business as usual. They've maintained the core management team. I know Jonathan Martin's moving on, but they're bringing in Todd Forsythe to run marketing, very seasoned marketing executive. So, you know, things are really pretty interesting. The fact is we haven't seen a billion dollar storage company that's independent since NetApp. There's only one left NetApp. EMC is now Dell EMC. 3PAR never made it even close to a billion outside of HPE. Icelon couldn't make it. Compellent couldn't make it. Data domain couldn't make it as a billion dollar company. None of those guys could ever reach that level of escape velocity that it appears that Pure and Nutanix are both on. Your thoughts, David Floyer? I couldn't agree more. They have made their whole mantra simplicity. They've really brought in the same sort of simplicity as Nutanix is doing. Those are the companies that seem to have been really making it because the fundamental value proposition to their customers is you don't need to put in lots of people to manage this. It'll manage itself. And I think they've stuck to that and they have been very successful with that simple message. Obviously, taking a flash product and replacing old rust with it makes it much simpler. They're starting off from a very good starting point. But they've extended that right the way up to a whole lot of cloud services with Pure. They've extended it in their whole philosophy of how they put data services together. I'm very impressed with that. It reminds me of actually the early days of NetApp and also of the three par. Oh, yeah, absolutely. Simplicity, great stored services, tier one. When I say NetApp, I'm thinking simplicity and stored services as well. But this is the joke that I've been making all week is that you talk to a practitioner, you say, what's your storage strategy? Oh, I buy EMC for Block, I buy NetApp for File. And Pure is sort of not only challenging that convention, but they're trying to move the market to this big data and analytics. And they also have a unique perspective on converged and hyper-converged. They kind of deposition hyper-converged as okay for certain use cases, not really scalable, not really applicable to a lot of the things we're doing. Man, Nutanix might even reach a billion dollars before Pure, so it's going to be interesting. I think they have a second strategy there, which is to be an OEM supplier. Their work with Cisco, for example. They're an OEM supplier there. They are bending to the requirements of being an OEM supplier. And I think that's their way into the hyper-converged market is working with certain vendors, certain areas, providing the storage in the way that integrator wants and acting in that way. And I think that's a smart strategy. I think that's the way that they're going to survive in their traditional market. But what's, to me, interesting anyway, is that they are really starting to break out into different markets, into the AI market, into flash for big data, into that type of market. And with a very interesting approach, which is you can't afford to take all the data from the edge to the center. So you need us, you need to process that data using us, because it's in real time these days. You need that speed. And then you want to minimize the amount of data that you move up the stack to the center. I think it's a very interesting strategy. So they're competing against a lot of massive companies, I mean, and they're competing with this notion of simplicity, some speed and innovation in these new areas. I mean, compare this with EMC's portfolio, now Dell EMC's portfolio. It's never been more complicated, right? But they got one of everything. You got a massive distribution channel. They could solve a lot of problems. HPE, a little bit more focused than Dell EMC. Really going hard after the edge. So they bring some interesting competition there. And they bring the server side, which is... And as does Dell. So they got servers, right? Which is something that Pure has to partner on. And in IBM, it's like, you know, they kind of still got their toe in infrastructure, but, you know, the Ginny Rametti's heart is not in it, you know, but they have it, they can make money at it, and you know, they're making the software defined, but, and then you got a lot of little guys kind of bubbling. Well, Nimble got taken out of SimpliVity, which of course was converged, hyper-converged. A lot of sort of new emerging guys, you got guys like Daytream out there, Iguazio, Infinidat is another one, much, much smaller, growing pretty rapidly. You know, what are your thoughts? Can any of these guys become a billion dollar company? I mean, we've talked for years, David, about, we remember, we wrote a piece. Can EMC remain independent? Yeah. Well, the answer was no. Yeah. Right? Can Pure remain independent, in your view? I don't believe it could do if it was just purely storage, except by taking the OEM route. But I think if they go after it as a data company, as an information company, an information processing company, and focus on the software that's required to do that, along with the processes, I think they can, yes. I think there's room for somebody. Well, you heard what Kix said. Yeah. Matt Kixmuller said, we might have to take storage out of the name. Yeah, the name, that's right. Maybe? Yeah, right. I think they will. Yeah. So they're playing in a big tam. The tam's enormous. So let's talk about some of the stuff we've been working on. The true private cloud report is hot. I think it's very relevant here. On-prem customers want to substantially mimic the public cloud, not just virtualization, management, orchestration, simplified provisioning, a business model that provides elasticity, including pricing elasticity. HPE actually had some interesting commentary there on their on-demand pricing, not just a rental model. So they're doing some interesting things. I think you'll see others follow suit there. I find Pure to be very cloud-like in that regard, in terms of Evergreen. I mean, they essentially have a SaaS subscription model for their appliance. And they're getting onto the SaaS vendors as well, in this OEM mode. They call it four to 1,000 cloud vendors. So your true private cloud report, what was significant about that was, to me anyway, was $150 billion approximately is going to exit the market in terms of IT labor that's doing today, non-differentiated lifting of patching, provisioning, server provisioning, loan provisioning, storage management, performance management, tuning, all the stuff that adds no value to the business that just keeps the lights on. That's going to go away and it's going to shift into public cloud. And what we call true private cloud. True private cloud is going, in our view, to be larger than infrastructures of service in the public cloud, not as large as SaaS, and it's the fastest growing part of the market today from a smaller base. And also we'll deal with the edge. So punctuate that, so also down to the edge. So what's driving that true private cloud market? What's driving it is IoT to a large extent because you need stuff to be low latency and you need, therefore, private clouds on the edge in the center, data has a high degree of gravity, it's difficult to move out. So you want to move the application to where that data is. So if data starts in the cloud, it should stay in the cloud, if it starts in the edge, you want to keep it there and let it die, most of it die there. And if it starts in headquarters, again, no point in moving it just for the sake of moving it. So where possible, private cloud is going to be the better way of dealing with data at the edge and data in headquarters, which is a lot of data. Okay, so a lot of announcements here today, NVMe and NVMe of the fabric pushing hard into file and object, which really they're the only ones with all flash doing that. I think again, I think others will follow suit once they start having some success there. What are some of the things that you are working on with the Wikibon team these days? Well, the next thing we're doing is the update of the, well, two things. We're doing a piece on what we call Unigrid, which is this new NVMe of a fabric architecture, which we think is going to be very, very important to all enterprise computing. The ability to merge the traditional state applications, applications of record with these large AI and other big data applications. Relevant for what we've been talking about here. Very relevant indeed. And that's the architecture that we believe we'll bring that together. And then after that, we're doing our server fan and converged infrastructure report and showing how the two of those emerge. Great, that's a report that's always been very highly anticipated. I think this is our third or fourth year doing that. Fourth year, so great, looking forward to that. Well, David, thanks very much for co-hosting with me and it's been a pleasure working with you. Okay, that's it. We're one day here at Pure Accelerate. Tomorrow we're at Hortonworks, DataWorks Summit. We were there today actually as well. And Cloud Foundry Summit. Of course, we're also at the AWS public sector. John Furrier is down there. So yeah, theCUBE is crazy, busy. Next week, we're Munich at IBM as an event, the data summit. And then the week after that, we're at Nutanix.next. So a lot going on theCUBE, check out siliconangle.tv. Find out where we're going to be next. Go to wikibond.com for all the research and siliconangle.com for all the news. Thanks you guys, great job, thanks to Pure. We're out, this is theCUBE, see you next time.