IPO hopeful Pure battles big boys in all-flash array market

TechTarget Research shows IPO hopeful Pure Storage wins a high share of deals and has built a solid reputation in the all-flash array market, despite its financial losses.

As Pure Storage prepares to go public with impressive revenue growth and staggering losses, TechTarget Research measured the vendor's success in winning deals and building its brand in the growing all-flash array market.

Patterns of revenue growth, large losses

Last week, Pure Storage amended its original initial public offering filing that showed revenue of $159 million for the first six months of 2015, an increase of 167% over the first six months of 2014. That puts Pure on pace to easily beat its 2014 total revenue of $174.5 million.

Despite the revenue gains, Pure still lost $113 million for the first six months of 2015. At that rate, its 2015 losses will be less than in 2014, but the vendor remains far from profitable.

Marketing costs made up most of Pure Storage's 2014 and 2015 expenses, leading to its huge losses. And what has the vendor received for those investments? According to TechTarget Research, the firm has achieved early success in winning both deals and mindshare in the competitive all-flash array (AFA) market.

Pure's win rate beats the all-flash array market 'big boys'

We used TechTarget Research's recent Data Alert post-deal and market landscape to develop a snapshot of the all-flash array market and how Pure performed against competitors. Post-deal data tracks short lists, vendor win rate, price and reasons why buyers selected the winning vendor in more than 300 storage deals since April 2015.

The AFA market landscape data comes from a bi-annual study of more than 650 data storage professionals.

All-flash array enterprise buyers give Pure high marks compared to established vendors EMC, Hewlett-Packard (HP), IBM and NetApp. Pure won 23% of deals tracked by Deal Alert, and converted 61% of those in which it made the buyer's shortlist. Only EMC showed up on more all-flash array shortlists than Pure Storage.

In post-deal surveys, buyers gave Pure Storage the highest average overall ratings in six vendor transaction categories:

  • Brand/reputation
  • Pricing practices
  • Product feature set
  • Sales-force quality
  • Ease of implementation
  • Minimal disruption

Pure scored highest in ease of implementation, and scored above average in brand/reputation, pricing practices and sales-force quality.

All-flash array market: High growth and price tag

The AFA market is lucrative for vendors, but expensive for customers. All-flash arrays had an average deal size of $1.35 million between April 1 and Aug. 31, 2015, according to Deal Alert data. That compares to $798,000 for solid-state in servers and $493,000 for hybrid storage arrays.

Perhaps the hefty price tag is why all-flash arrays ranked fifth behind emerging technologies such as public cloud backup/recovery, hyper-converged infrastructure, software-defined storage and public cloud primary storage in TechTarget's Storage Technology Momentum Indicator. The Momentum Indicator measures the number of data storage professionals using a technology in pilot or having it in their near-term or long-term plans. However, AFAs finished ahead of converged infrastructure, object storage, hybrid arrays, server-based SSDs, unified storage, NAS and Fibre Channel SANs.

All-flash arrays were listed in more organizations' long-term plans (26.5%) than any other storage technology. Of those surveyed, 18.3% use all-flash arrays, 6.3% have it in a pilot or evaluation stage, and 11.8% said it was in a near-term plan. The remaining 37.1% said AFA adoption is not planned at all, a lower amount than other emerging technologies such as software-defined storage (37.9%), hyper-converged infrastructure (46.6%) and public cloud backup (41.9%).

Sixty-two percent of storage buyers said they planned to increase spending on all-flash arrays over the next 12 months, with 34% expecting flat spending. That compares to 47% expecting to increase spending on hybrid arrays.

Who's the most exciting data storage vendor?

Pure Storage is used by 10.3% of the data storage professionals surveyed, ranking fourth behind EMC (25.6%), IBM (25.6%) and HP (15.46%) in the all-flash array market.

When asked to name one or two exciting storage vendors, respondents ranked Pure Storage sixth behind EMC, HP, NetApp, IBM and Dell. Pure finished fourth on the list of most attractive acquisition candidates behind NetApp, EMC and HP.

Now investors will weigh whether Pure's ability to win deals and generate excitement will translate into profits in the foreseeable future.

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