 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's coverage of Pure Storage Accelerate 2018. I'm Lisa Martin, been here all day with Dave Vellante. We're joined by Dave of Floyer now. Guys, really interesting and very informative day. We got to talk to a lot of Puritans, but also a breadth of customers from Mercedes Formula One to Simpson Strong Tide to UCLA's School of Medicine. Lot of impact that data is making in a diverse set of industries. Dave, you've been sitting here with me all day. What are some of the key takeaways that you have from today? Well, Pure is winning in the marketplace. I mean, Pure said, look, we're not going to bump along. We're going to go for it. We're going to drive growth. We don't care if we lose money early on. They bet that the street would reward that model. It has kind of a little mini Amazon, a version of an Amazon model. Grow, grow, grow, worry about profits down the road. They're eking out a slight little positive free cash flow on a non-gap basis. So that's good. And they were first with All Flash really that kind of early on, and they kind of won that game. You heard David today, the NVMe, the first with NVMe. NVMe and NVMe. No uplifts on pricing for NVMe. So everybody's going to follow that. They can do the evergreen model. They can do these things and claim these things as we were first. Of course, we know David Floyd, you were first to make the call back in 2008 on Flash and the All Flash data center, but Pure was right there with you. So they're winning in that respect. Their ecosystem is growing, but you know, storage companies never really have this massive ecosystem that follow them. They really have to do integration. So that's a good thing. So we're watching growth, we're watching continued execution. It seems like they are betting that their product portfolio, their platform can serve a lot of different workloads. And it's going to be interesting to see if they can get to two billion, they're kind of the next milestone, they hit a billion, can they get to two billion with the existing sort of product portfolio and roadmap or do they have to do M&A? You're right. So that's one thing to watch. The other is can Pure remain independent? David, you know well, we used to have this conversation all the time with the likes of David Scott at 3PAR and the guys at Compellent, Phil Soren and company, they weren't able, Frank Slootman at Data Domain, they weren't able to stay independent. They got taken out. They weren't pricey enough for the market not to buy them. They got bought out. Pure, $5 billion market cap, that's kind of rich for somebody to absorb. It was kind of like NetApp. NetApp got too expensive to get acquired. So can they achieve that next milestone, two billion? Can they get to five billion? The big difference. Or is there any hiccup on the way, which will... Yeah, yeah, right, exactly. Well, the other thing too is that NetApp's market was growing pretty substantially at the time, even though they get hit in the dot-com boom, the overall market for Pure isn't really growing. So they have to gain share in order to get to that two billion, three billion, $5 billion market. If you break the market into flash and non-flash, then they're in the much better half of the market. That one is still growing from that perspective. Well, I kind of like to look at the server sand piece of it. I mean, they use this term by Gartner today. There's something accelerated under new Gartner term, the 2018- Shared Accelerated Storage. Shared Accelerated Gartner finally came up with a category that we called server sand. I've been joking all day. Gartner has a better VP of naming than we do. But looking at server sand, I mean, I first started talking about it in 2009, thanks to your guidance. But that chart that you have that shows the sort of server sand, which is essentially Pure, right? It's the- Well, yes. It's a little more software than Pure is, but Pure is an awful lot of software, yes. And showing it growing at the expense of the other segments, you know, the particularly very, very particularly- So they're really well positioned from that standpoint. And, you know, the other thing, Lisa, that was really interesting, we heard from customers today that they switched for simplicity, okay, not a surprise, but they were relatively unhappy with some of their existing suppliers. They got kind of crummy service from some of their existing suppliers. Now, these are maybe smaller companies. They wanted a customer called out, SimpliVity specifically, said, I loved them when they were an independent company. Now they're part of HPE. Man, I don't get serviced like the way I used to. So that's sort of a warning sign and a concern. Maybe they're, you know, HPE's prioritizing the bigger customers, maybe the more profitable customers, but, you know, that can come back to bite you. So Pure, but the point is, Pure has the luxury of being able to lose money, service like crazy, those customers that might not be as profitable and grow from, you know, its position of a smaller company on up. Yeah, besides the evergreen model and the simplicity being resoundingly drivers and benefits that customers across, you know, from Formula One to medical schools are having, you're right, the independence that Pure has currently is a selling factor for them and it's also probably a big factor in retention. I mean, they've got a net promoter score of over 83, which is extremely high. It's fantastic, isn't it? I think only Vima, I know of, has even higher one, but it's a very, very high score. It's very high. They added 300 new customers last quarter alone bringing their global customer count over 4,800 and that was a resounding benefit that we were hearing of they, no matter how small, if it's Mercedes Formula One or the Department of Revenue in Mississippi, they all feel important. They feel like they're supported and that's really key for driving something like a net promoter score. Now, Pure has definitely benefited from, it's taken share from EMC. It did early on with VMAX and Symetrix and VNX. We've seen Dell EMC storage business decline. It probably has hit bottom, maybe starts to grow again. When it starts to grow again, I think even last quarter, its growth in dollars was probably the size of Pure. But Pure has definitely benefited from stealing share. The flip side of all this is when you talk to the CXOs, the big customers, they're doing these big digital transformations. They're not buying products. They're buying transformations. They're buying sets of services. They're buying relationships and big companies like Dell and IBM and HPE who have large services arms can vie for certain business that Pure necessarily can't. So they've got the advantage of being smaller, nimbler, best-of-breed product, but they don't have this huge portfolio of capabilities that gives them a seat at the CXO table. And you saw that today, Charlie Giancarlo, his talk, he's a techie. The guys here, Kix, Hatt, they're techies. They're hardcore storage guys. They love storage. It reminds me of the early days of EMC. Or NetApp, yeah. Or NetApp, right? They're really focused on that. So, and there's plenty of market for them right now, but I wonder, David, if you could talk about sort of architecturally, people used to criticize the two-controller approach. Obviously seems to be doing very well. People take shots at the evergreen model, saying, oh, we can do that too. But again, Pure is first. Architecturally, what's your assessment of Pure? So the evergreen is, I think, excellent. They've gone around about that well. I think from a straightforward architecture, they kept it very simple. They made a couple of slightly odd decisions. They went with their own NAND chips putting them into their own stuff, which made them much smaller, much more compact, completely in charge of the storage stack. And that was a very important choice they made, and it's come out well for them. My own view is that M2 is actually going to be the form factor of the future, not the SSD. The SSD just fitted into a hard disk slot. That was its only benefit. So when that comes along and the NAND vendors want to increase the value that they get from the stacks, et cetera, I'm a little bit nervous about that, but having said that, they can convert back. We could talk about that. Yeah, I mean, that seems like something that they can respond to, right? Yeah, absolutely. I was at the Micron Financial Analyst Meeting this week, and a lot of people were expecting that the memory business has always been very cyclical. It's like the disk drive business. But it looks like because of the huge capital expenses required, it looks like supply, it looks like they got a good handle on supply. Micron made a good strong case to the street that the pricing is probably going to stay pretty favorable for them. So I don't know what your thoughts are on that, but that could be a little bit of a headwind for some of the system suppliers. I take that with a picture assault. They always want to have the market saying it's not going to go down. Of course, yeah. And then it crashes and the shock goes up, right? The normal marketplace is for any of it, is goes through this series of S curves as you reach a certain point of volume. And 3D NAND has reached that point that it will go down inevitably, and then Q comes in, and then that will go down again through that curve. So I don't see that the marketplace changes. I also think that there's plenty of room in the marketplace for enterprise because the biggest majority of NAND production is for consumer, 80% goes to consumer. So there's plenty of space in the marketplace for enterprise to grow. But clearly the prices have not come down as fast as expected because of supply constraints. And the way in which companies like Pure have competed with spinning disk are through excellent data reduction algorithms, right? So at one point you had predicted there would be a crossover between the cost per bit of flash and spinning disk. Has that crossover occurred? Well, I added in the concept of sharing, raw. But added in the cost of sharing, the cost benefit of sharing. And one of the things that really impresses me is their focus on sharing. Which is to be able to share that data for multiple workloads in one place. And that's excellent technology they have. And they're extending that from snapshots to cloud snaps as well. And I understand that benefit, but from a pure cost per bit standpoint oh no, they're never going to, I don't think they'll ever get to that. The second that happens, disks will just disappear completely. Gosh guys, I wish we had more time to wrap things up. But thanks so much, Dave, for joining me all day and supporting the who to my print symbol. David, thanks for joining us on the wrap. We appreciate you watching the Cube from Pure Storage Accelerate 2018. I'm Lisa Martin for Dave and David. Thanks for watching. Thank you.