Everpure, Inc. Class A common stock

For the people that are coming in over the Internet, if you don't know me, my name is Mark Merdler. I'm the Bernstein Senior Analyst in charge of global software. I have been at Bernstein now since 2010, covering a very wide range of companies and capabilities. I'm really pleased today to have with me the team from Pure Storage. And maybe what I'll do is allow them to make a little quick introduction and start maybe with a question. We have Charles Giancarlo, the CEO of Pure Storage, and Kevin Preissler, the CFO of Pure Storage. So, you know, maybe I'll start this way. Oh, let me, I have one important one that I need to make as requested, and that is statements made in these discussions which are not forward are not statements of historical fact, are forward-looking statements based upon current expectations. Actual results could differ materially from those projected due to a number of factors, including those referenced in Pure Storage's most recent SEC filings on Form 10Q and 10K and 8K. So now that we've got the legal stuff to the side, and you didn't have to do it, I had to do it. So, Kevin, why don't we start this way? Can you give us a... Overview of the company and the company's vision for the future. Actually, I'll probably take that.

So in overview of the company, I'm going to give a very quick historical background of the company and then really go to our vision going forward. The company started in 2009, so we're a little over 15 years old now. We started under the concept that flash storage, meaning NAM, the same thing that's in cell phones, and all your personal devices at this point would eventually make its way, which was a new thought at that time, into enterprise storage. At that time, all enterprise storage at every sort of price performance level was all done with hard disk, and we were the first to come out with enterprise storage using Flash. Flash at that time was very, very expensive compared to hard disk, almost maybe 30 times, 40 times as expensive as hard disk, so we had to do a lot of things to make it economical at a system level. when compared with hard disk, and we were quite successful in those early years, grew very, very rapidly in what are generally known as primary use cases, high-speed databases, high-speed trading, things such as that. Fast forward 15 years, we have developed a broad product line fitting every different type of storage from there are Several different types of storage. There's block, file, and object. There's large scale, small scale. There's scale up, scale down. We've been able to cover all that space with one software operating system. Another fact about the storage environment is generally every different type of storage, even if it's covered by a single vendor, they have many different operating systems to cover that vast array, if you will, of storage. We do it with one operating system. We stayed very, very focused on developing that environment. The other thing to keep in mind is other vendors have added flash storage to their hard disk storage offerings. They did that with SSDs. SSDs were specifically designed to mimic hard disks. And when you take a semiconductor and make it look like a mechanical device, you suboptimize that semiconductor. We're the only company that has software that manages raw flash, and we do it at the full system level rather than individual SSDs. And that gives us a price performance advantage in the use of flash. Okay, so that's generally one additional thing that I'll mention that we built early on that distinguishes us. is we've designed our software and our systems to be consistently and forever non-disruptive upgradable. Typically in the storage market, actually typical in the entire IT systems environment, a product gets old. Eventually it gets old enough where it goes out of service. The customer has to replace it. And when they replace it, first of all, it's a new purchase, you know, of the same thing effectively, just the modern version. So it's a new purchase for the vendor as well. But in addition to that, it's disruptive. The application comes down, they have to replace the product, and they bring up the application. It's why enterprise systems might be down on any particular weekend while they're going through this upgrade process. We developed a capability where we can upgrade our systems on an ongoing basis, non-disruptively, forever. And that means our products never get old. We can consistently upgrade them without the customer having to take down their environment. We call this evergreen. And it's the basis of our as a service offering where we provide a storage service as just a set of SLAs, and we manage that entire environment. And it's a true SaaS offering, but we can provide it where the storage is actually on the customer's premise, if the customer prefers that. So it's a very flexible both on-prem and off-prem storage service that is provided fully as a service where we manage and we own the infrastructure. So that's where we are today. We're now just over $3 billion as of our announcement yesterday. Quite profitable, adding to the profitability every year. Our vision now extends in two major directions that I'll point out. One is last quarter we were able to announce a major design win with a hyperscaler. The software that I talked about that allows our system, that has our software managing NAND flash in bulk, allows us to have better price performance in SSDs and to match the total cost of ownership of hard disk storage in the hyperscaler. This then allows us to start replacing the hundreds of exabytes that exist in hyperscaler storage with a flash solution that meets the TCO of cheaper disks and at the same time improves their overall price performance at roughly one-tenth the space power and cooling of hard disk storage. So this allows them to save about 20% of their current data center footprint power and to put it into other things such as AI. So that's one area of potential growth for us. The second is that we have developed software now, and I've got a little bit of something to show, We all used, if you remember what these are, it's an external hard drive. For those of us that are old enough, we used to use it attached to our laptop or our desktop, and it would provide extra storage, right? But if your neighbor had one as well, if you ran out of storage and you wanted to borrow some of the capacity of your neighbors, well, that wasn't really so easy or practical. You'd have to move it over. So you'd have to go to the store and buy a bigger one, and then you'd have to move all the data from one to the other. File sharing wasn't so easy. You'd have to attach it to an email or something like that. So very impractical, but it did provide extra storage. Believe it or not, that is the way that IT enterprise storage operates today. A storage array is nothing different than an external hard drive on an application stack in the IT environment. What we're about to do, what our new software release allows, is for all of our arrays to operate like a cloud of storage. Just like all of us have moved to cloud storage, the benefit is not only unlimited storage that can scale just by us paying them a little bit more, not only the fact that it never fails and that the service keeps getting better without disruption, but you can easily share files. That's what we're bringing to enterprise storage. All of our arrays will now operate as a cloud of storage, not just in the data center, but across the global enterprise. It will allow easy file sharing across applications in the enterprise, which does not just file sharing, data sharing. That does not occur today. Data is captive in a data silo tied to an application stack. The only way to get access to it is through the application, which adds cost to the application. rather than allowing real-time data to be accessed directly, let's say by an AI agent or anything else. So it's a fundamental change bringing the IT environment, finally virtualizing the data environment in an IT environment, and allowing the enterprise to place their policies in software rather than being managed manually. So that's, you know...

Thank you, and I apologize for misnaming. No problem. Don't worry. I plan to ask the financial questions also, but maybe, Charlie, can I follow up on that? How do you think today and long term about what's the right mix of hardware and software for your business?