 Live from the BuildGram Auditorium in San Francisco, it's theCUBE, covering Pure Storage Accelerate 2018. Brought to you by Pure Storage. Welcome back to theCUBE. We are live at Pure Storage Accelerate 2018. I'm Lisa Martin, sporting the Prince look today. We're at the BuildGram Civic Auditorium. This is a super cool building. 1915 it was built and it's the home of so many cool artists. So, I've got to represent today. Dave Vellante is my co-host for the day. Well, I got to tell you, Charlie, thank you for wearing a tie. Yeah, well. My tie's coming off. Okay, well, hey, look, you and me, but you and me both, yeah. Well, I do, I still have investors later in the day. I got the only ones representing musicians. I got my T-shirt underneath here. All right, my review. Oh, oh. Ladies and gentlemen, you will not want to miss those. BuildGram, right. All right. I'm all who. The who. We got Roger Daltrey. Oh, that's fantastic. Pete Townsend. The who. That's my deal. So careful not to ruin a shirt with the buttons. The who. All right. Now, I got to say, well done. Tower of Power was really my band. Oh, man. They never played here, but BuildGram was the first to sign them. Right. Oh, representing. I was an East Coast boy, so it was all the New York concerts and venues for me, but it was fantastic. I used to watch, I remember BuildGram presents. That was from here, right. And I always thought if I found myself on stage, there'd be a couple of security guys dragging me off. I love that line. That was beautiful. Nobody today and you got a lot of applause, a lot of confetti. So Charlie kicked things off this morning at the third annual Accelerate packed house. Lots of orange as far as the eye can see. But just a couple of days ago, exactly a sea of orange, a proud sea of orange. Just two days ago on the 21st of May, you guys announced your fiscal 19 first quarter results. Revenue up 40% year over year. You added 300 new customers, including the U.S. Department of Energy, Page AI and the really amazing transformational things they're doing for cancer research. But you also shared today your NPS score over 83. Correct. Big numbers shared today. These are big numbers. You've been the CEO for about nine months or so now. Tell us what's going on. How are you sustaining this? Stock's going up. Right, right. Stock's up about 80% year over year right now. So that's very good. But really I think it's a recognition that Pure is playing a very important role in the data processing in the high tech landscape, right? And I think storage was really, I think up until now really viewed as maybe an aging technology, something that was becoming commoditized, something where innovation wasn't really important. And Pure was the one company that actually thought that storage was important. And as I mentioned in my keynote talk, I really view technology as being a three legged store. That is, it comprises three elements, compute, networking and storage. And if any one of them falls behind, it becomes unbalanced. And frankly, computers has advanced 10x over the last 10 years. Networking has advanced more than 10x over the last 10 years. And storage didn't keep up at the same time that data was exploding, right? And Pure is the one company that actually believes that there's real innovation to be had in storage. And Page AI is a great example of that. And I know it tugs on all of our heart strings. But Page AI took lots of analog data. What was it? We're talking about cancer samples that were on slides. They took literally millions of samples, digitized it, and fed it into an AI machine learning engine. Now, if you understand the way machine learning operates, it has to practice on thousands, actually tens of thousands of millions of samples. And it could take all year or it can take hours. And what you want it to do is take minutes or hours. And if the data can't be fed fast enough into that engine, it's going to take all year. You want your cancer pathology, cancer pathology to be analyzed really quickly. Immediately, right? And that's what this engine can do. And it can do it because we can feed the data at it fast at the rate it needs to analyze that cancer. And data is just becoming the core of every company's business. It's becoming, if you will, the currency. It's becoming the gold mine where companies now want to analyze their data. Right now, only about 1% of the data that companies have can even be analyzed because it's being kept in cold storage. And at Pure, we believe in no cold storage. It's all got to be hot. It's all got to be available, able to be analyzed, able to be mined. Do you think, I got to ask you this, do you think that percentage will rise faster than the amount of data that's going to be created, especially when you think of things at the edge? Well, it's a great question. And I think absolutely. The reason is because it's not only the data that's being generated or saved now that's important. If you really want to analyze trends and get to know your customers, the last five years, the last 10 years of data is just as important. And increasingly, I think you may know this just from online banking, right? It used to be that maybe you'd have last month's checks available to you. But now you want to go back a year, you want to go back five years and see, you get audited by the IRS. They say, well, prove to us that you did this. You need to find those checks. And banks are being expected to have that information available to you. I got to ask you, you're what we call a tech athlete. You were showing your tech chops on stage, former CTO. But you're going to see EO, been a board member of many prominent companies. Why, Charlie, did you choose to come back in an operating role? Right. I mean, why pure and why an operating role? You know, I'd love being part of a team. And it's really that. You know, I've had great fun throughout my career, but being part of a team that is focused on innovation and is enabling, you know, not just our industry, but frankly, allowing the world's business to do a better job. I mean, that gets what gets me thrilled. I like working with customers every day, with our salespeople, with our engineers. And it's just a thrilling life. You did say in your keynote this morning that you leave the office at the end of the day with a smile and you get to the office in the morning with a smile. That's pretty cool. I do, and if you ask my wife, she'd tell you the same thing, right? So, yeah, no, I really enjoy being part of the team. So, go ahead, please. Oh, thank you, sir. One of the things that Pure has done well is partners, partnerships. We're going to be talking with NVIDIA later today, so this is going to be on. You guys just announced the new Airy Mini. And I was telling Dave, I need to see that box because it looks pretty blanged out on that site. Talk to us about, though, what you guys are doing with your partnerships and how you've seen that really be represented in the successes of your customers. Right, well, there's several different types of partnerships that we could talk about. First of all, we're 100% channel-led in our organization. We believe in the channel. You know, this is ancient history now, but when I arrived at Cisco, they were 100% direct at that time. No partners whatsoever. Belly to belly. Belly to belly. And I was very much a part of driving Cisco to be a 100% partner over that period of time. And so my history and belief in utilizing a channel to go to market is very well known. And my view is the more we make our partners successful, the more we make our customers successful, the more successful we will be. But then there are other types of partnerships as well. There are technology partnerships like what we have with Cisco and NVIDIA. And we, again, we need to do more with other companies to make the solutions that we jointly provide easier for our customers to be able to use. And then there are system integration partners because, let's face it, you know, as much technology as we build, customers often need help from experts of system integrators to be able to pull that all together to solve their business problems. And again, so the more that we can work with these system integrators, have them understand our products, train them to use them better, the better offer our customers will be. Charlie, Pure has redefined, in my opinion, escape velocity in the storage business. It used to be getting to public. You saw that with, you know, 3PAR and Compalon and Isilon, Data Domain. You guys first storage company had a billion dollars since NetApp. 20 years ago. Awesome milestone. I didn't think it was possible eight years ago, to be honest. So now, okay, what's next? Can you remain an independent company? In order to remain independent, you got to grow. NetApp got to five billion in a faster growing market. You guys have to gain share. How do you continue to do that? Yeah, well, you're right. Each and every day we have to compete. You know, we have to kill for what we eat. And, you know, our European sales lead calls it, you know, our competition in an account basis, a knife fight in a phone booth. So the competition is tough out there, but we are bringing innovations to market. And more importantly, we're investing in the technology at a rate that I think that our competitors are not going to be able to keep up with. You know, we invest close to 20% of our revenue every year in R&D. Our competitors are in single digits, okay? And this is a technology business. You know, eventually, if you don't keep up with the technology, you're going to lose. And so that, I think, is going to allow us to continue growing and scaling. And you're right. Growth is important for us to be able to stay independent. But I looked very deeply at the entire industry before joining. And you know, I was in private equity for a while. So we know how to analyze an industry, right? And my view was that all of the other competitors are either no longer investing, and that's either internally or in terms of large acquisitions, or they've already made their bets. And so I didn't really see a likely acquirer for pure. And that was going to give us, if you will, the breathing room to be able to grow to a scale where we can continue to be independent. Almost by necessity, right? It's good to put the pressure on yourself. So in terms of where you are now, how is pure position to lead storage growth in infrastructure for AI-based apps? There's this explosion of AI, right? Filled by deep learning and GPUs and big data. Where, how are you positioned to lead this charge in storage growth there? Thanks, that's such a great question. You know, to get to the part of, you know, I started hearing about AI when I graduated college, which is a really long time ago now. And yet why is it exploding now? Well, computing has done its job, right? They, you know, we're here today with NVIDIA, with GPUs that are just, you know, we're talking about, you know, gigaflops, you know, just incredible speeds of compute. Networking has done its job. We're now at 100 gigabits and we're starting to talk about 400 gigabit per second networks, right? And storage hadn't kept up, right? Even though data is exploding. So we announced today, as you know, our data-centric architecture. And we believe this is an architecture that really sets our customers data free. It sets it free in many ways. One of which, it allows it to always be hot at a price that customers can afford. Not only can afford, it's cheaper than what they're doing today because we're collapsing tiers. No longer a hot tier, warm tier, cold tier. It's all one tier that can serve many, many needs at the same time. And so all of your applications can get access to real-time data and access it simultaneously with the other applications. And we make sure that they get the quality of service they need and we protect the data from being, you know, either corrupted or changed when other applications want it to be the same. So we do what is necessary now to allow the data to be analyzed for whether it's analytics or AI or machine learning or simply to allow, you know, DevOps to be able to operate on real-time data, on live data, you know, without upsetting, you know, the operations environment. I want to make sure I understand that. So you're democratizing tiering, essentially. Democratizing tiering. And so how do you deal with, you know, different densities, QLC, et cetera? Is that through software or is that? Well, so we hide that from the customer, right? So we're able to take advantage of the latest storage because we speak directly to the storage chips themselves. All of our competitors use what are called SSDs, solid state drives. Now, think about that for a moment. There's no drive in a solid state drive. These things are designed to allow flash to mimic hard disk. But hard disk has all these disadvantages. Why do you want flash to mimic hard disk? We also set flash-free. We're able to use flash in parallel, okay? We're able to take low-quality flash and make it look like high-quality flash because our software adapts to whatever the specific characteristics of the flash are. So we have this whole layer of software that does nothing other than allow flash to provide the best possible performance characteristics that that flash can provide. And it allows us to mix and match and completely hide that from the customer. And with NVMe, you're taking steps to eliminate what I call the horrible storage stack. That's exactly right. So you talked about earlier about the disparity between storage and the other two legs of the stool. So as you attack that bottleneck, what's the new bottleneck? Is it networking and how do you see that shaking out? It's a great question. I think the new bottleneck, I would actually put it a higher layer. It's the orchestration layer that allows all this stuff to work together in a way that requires less human interaction, right? There are great new technologies on the horizon, Kubernetes and Spark and Kafka, a variety of others that will allow us to create a cloud environment, if you will, both for the applications and for the data within private enterprises, similar to what they can get in the cloud in many cases. You also talked about innovation. And I want to ask you about the innovation equation as both the technologist and the CEO who talks to a lot of other CEOs. We see innovation as coming from data and the application of machine intelligence on that data and cloud economics at scale. Right. Do you buy that and where do you guys fit in that? We do buy that, although cloud economics, we believe that we can create an environment where customers in their private data centers can also get cloud economics. And in fact, if you look at cloud economics, they're very good for some workloads, not necessarily good for other workloads. They're good at low scale, but not necessarily good at high scale. And so how do we allow customers to be able to easily move workloads between these different environments depending on what their specific needs are. And that's what we view as our job. But also point something else out as well. About 30% of our sales are in the cloud providers themselves. They're in software as a service, infrastructure as a service, platform as a service. These vendors are using our systems. So as you can see, we are already designed for cloud economics. We also get, we already get to see how these leading edge, very high scale customers construct their environments. And then we're able to bring that into the enterprise environment as well. I mean, I think we buy that. You're an arms dealer to the cloud, maybe not the tier zero to use that term. Right. But also you're helping your on-prem customers bring the cloud operating model to their data because they can't just stuff it into the cloud. It won't always be the right solution for everyone. Now, it'll be the right solution for many. And we're doing more and more to allow the customers to bridge that. But we think that it's a multi-cloud environment, including private data centers. And we want to create as much flexibility as we can. We just say Pure is going to be an enabler of companies being able to analyze way more than half a percent of their data. If we don't do that, then there's no good reason for us to be in business. That is exactly what we're focused on. And last question for you, Trillie. You've been the CEO for about nine months now. Cultural observations of Pure storage. Oh, thank you. And you've seen the sea of orange that's here. And by the way, the orange is being supported not just by Puritans, not just by our employees, but by our partners and our customers as well. It's a bit infectious. I have to be honest, I had one piece of orange clothing when I started this job. And my mother's into it. She's sending me orange, all sorts of orange clothing, some of which I'll wear, some of which I won't. My wife, everyone, there's a lot of enthusiasm about this business. It has a bit of a cult-like following. And Puritans are really very, very dedicated, not just to the customer. I mean, people become dedicated, not to an entity. They become dedicated to a cause. And the cause for Pure is really to make our customers successful. And our employees feel that. It's what drives them every day. It's what brings them to work. And hopefully, it's what puts a smile on their face when they go home at night. Charlie Giancarlo, CEO of Pure Storage. Thanks so much for joining us on theCUBE today. Thank you. Thank you. For the Who Volante, I'm Prince Martin. We are live at Pure Accelerate 2018 in San Francisco. Stick around. Who and I will be right back.