Pure Storage recently reported both strong FY2022 and 1Q2023 financial results, with a tip of the hat towards profitability.  We take a look at the data and put the results in context of what might be presented at the Pure//Accelerate TechFest 2022 event in Los Angeles. 

Disclaimer: We do not offer financial advice or information.  Data presented is freely available from public sources and collated purely for discussion purposes. 

The following graphs show updated data for both FY2022 (annual data) and 1Q2023 (quarterly data), refreshing the graphs previously presented in this post.  The annual data shows continued growth in revenue (figure 1), with the ongoing trend consistently upwards.  Note that 2021 was a slightly depressed year, with effects of the pandemic and supply chain clearly evident. 

Figure 2 shows profit and loss, with the 2022 data narrowing losses and reporting a profit in Q4.  Sales & Marketing and R&D always trend upwards to represent around 33% and 26% of revenue respectively.  So, the company could pull back on these costs and report a profit if required.  However, the aim still seems to be one of growth.  As a result, we can continue to expect to see profit (or loss) hover around the breakeven point.    

The quarterly data (figures 3 & 4) represents the growth quarter on quarter more clearly.  4Q2022 and 1Q2023 have both been strong, up over 50% year on year for the latest numbers.

Growth

So, the numbers look good, but what’s driving the underlying growth?  Unfortunately, Pure doesn’t break down individual product revenues, so we can’t get any direct insight from the financials, other than to highlight growth in subscription services.  We know from this press release that FlashBlade has achieved $1 billion in revenues and a run rate of around $250 million.  This means FlashArray continues to be the most successful revenue item and is where we’ve seen the most recent hardware product news (FlashArray//C, FlashArray//XL). 

It’s interesting to note that FlashBlade has had fewer hardware revisions since GA in 2017, mainly focused on increasing storage capacity and tweaking performance.  However, from what we can see, the underlying hardware and architecture remains basically the same.  Perhaps FlashBlade is where we can expect some news, as the announcement for Pure//Accelerate techfest 22 indicates the “biggest product launch in 5 years”, which fits with the original GA of FlashBlade in January 2017. 

Services

Outside of the hardware products, the biggest focus of the company has been to expand the software portfolio, both on-premises with Portworx and as SaaS with Fusion and Pure1.  We discussed Fusion and Portworx Data Services in these two posts (here and here).  You can also listen to this podcast with Alex McMullan where we walk through the details and how they fit into the context of Pure Storage’s strategy.

The expansion of Pure Storage’s services portfolio represents a direction the entire market wants to take.  At this point in the deployment cycle, we believe that Portworx Data Services is a positioning play, rather than a significant revenue generator. 

Futures

What comes next?  The technology industry is on a long-term trend towards consumption-based models and as-a-service delivery.  In the public cloud, this paradigm is easy to achieve; on-premises the challenge is more difficult.  From Pure Storage’s perspective, its approach has been to reduce the management burden on hardware, make hardware deployments more efficient, abstract the management tasks to services in the public cloud and address the transformation of workloads towards containers.

Without efficient hardware design, offering on-premises as-a-service storage will be either expensive for the customer, or result in lower margin for the vendor.  To date, we’ve seen Pure focus on this area, including power efficiency (discussed in this recent podcast) and the design changes to FlashArray introduced with FlashArray//XL.  So, hardware still matters, especially so, when delivering an abstracted service.

The Architect’s View®

The Pure//Accelerate events represent an opportunity to restate strategy and announce new products and services.  We will be watching closely, as the news unfolds in Los Angeles.  Expect some updated commentary based on announcements.  Meanwhile, don’t forget to check out our dedicated Pure Storage Microsite. 

Copyright (c) 2007-2022 – Post #a212 – Brookend Ltd, first published on https://www.architecting.it/blog, do not reproduce without permission.Pure Storage is a Tracked Vendor by Architecting IT in storage systems and software-defined storage. Pure Storage has been a customer of Brookend Limited prior to 2022.