Pure Storage expects more than half of its revenue to come from subscriptions as it shifts from product sales to become an as-a-service supplier.
This change in viewpoint is detailed in an interview with Pure CEO Charlie Giancarlo in The Technology Letter, with extracts detailed by Wells Fargo analyst Aaron Rakers.
Pure’s Evergreen//One Storage-as-a-Service (STaaS) subscription provides usage-based array storage on-premises, in a colocation facility or in the public cloud with Cloud Block Store. In its last quarterly earnings report for the three months ended November 2023, Pure took $1.3 billion in annual recurring revenues and $309.6 million in subscription services revenue, a 26 percent year-on-year rise. Evergreen//One revenues more than doubled.
Giancarlo stated at the time: “The outperformance of Evergreen//One this year has been significantly above our prior expectations, and we now expect this strong level of demand to continue through Q4.”
He told The Technology Letter: “Subscription is now, roughly, 40 percent of our reported revenue and it’s reached a level where it’s more than doubling [annually].” He said Pure’s marketing would increasingly emphasize Evergreen//One in the future.
That means FlashArray and FlashBlade systems provided on a consumption basis like its Cloud Block Store offering, which provides block-based storage through Purity OS in the AWS and Azure public clouds.
Giancarlo said Pure customers should assume that it will add Purity file services to the public cloud as well. That suggests a Cloud FileStore-type offering providing a consistent file services approach across on-premises/colo Pure arrays and the public cloud.
The subscription emphasis parallels Dell with APEX, HPE with GreenLake, and also NetApp with Keystone.
Giancarlo added more detail to Pure’s claim that flash storage will replace disk storage and no new disk drives will be sold after 2028, saying: “There won’t be any new disk systems sold in five years.” In other words, he believes there won’t be any new disk-based arrays sold by the end of 2028, implying existing disk and hybrid array customers could still be buying disk drives from then on, just not new arrays. This viewpoint is not supported by disk drive manufacturers or disk-based array suppliers.
Giancarlo said Pure will add more details about the internal financial aspects of its subscription services in its forthcoming quarterly reports.