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Pure Storage cloud licensing buoys vendor's fortunes

Pure Storage cloud revenue grew by double digits last quarter. A new service catalog guides customers to categorize workloads for predictable performance and pricing.

On the day it reported double-digit growth in subscription revenue, Pure Storage expanded its cloudlike licensing program.

The all-flash vendor on Tuesday added transparent pricing to Pure as-a-Service offerings. Using its new online service catalog, Pure Storage customers can categorize workloads and match them to storage tiers and Pure-managed service levels.

That allows on-demand consumption of Pure Storage file and block arrays with predictable pricing. The licensing applies to on-premises storage or Pure hardware provisioned in Amazon Web Services and Microsoft Azure public clouds. Customers can view the service catalog to compare rates.

The updated Pure Storage cloud consumption pricing includes FlashStack-as-a-Service, based on Pure FlashStack converged infrastructure. The validated reference architecture combines FlashArray storage with Cisco networking and servers, sold via Pure channel partners.

For the quarter that ended Nov. 1, Pure posted subscription-related revenue of $136.1 million, a jump of 29.5% year over year. The figure includes Pure as-a-Service unified subscription revenue and Pure Evergreen managed services, and it represents nearly one-third of Pure's overall quarterly revenue. Pure said it added 319 new customers last quarter, compared to 379 during the same period a year ago.

The increased Pure Storage cloud revenue was offset by a 4% decline in overall product sales, which tumbled to $410 million for the quarter. The flagship product is the Pure Storage FlashArray block system. Pure Storage FlashBlade is a scale-out platform for file and object data. Both arrays use Pure's custom DirectFlash NVMe modules in lieu of SAS/SATA SSDs.

Charles GiancarloCharles Giancarlo

"We've been signaling for quite a while that our expectation is that subscription would be [increasing] as a percentage of our sales, and that has largely turned out to be true," Pure Storage CEO Charles Giancarlo told Wall Street analysts during an earnings call.

In a scenario echoed by other vendors, Pure cited the pandemic for fueling interest in the cloud. Giancarlo said it forced organizations to rethink how they deliver and manage IT services.

"These customers are not specifically looking to migrate to subscriptions. They are moving to services and suppliers that provide the outcomes they desire, rather than just giving them the means to create those outcomes themselves," Giancarlo said.

Adoption of the Opex storage pricing is expected to skyrocket as companies balance data growth and limited storage budgets. By 2024, services-based consumption will represent half of all data center infrastructure spending, according to IT analyst firm IDC.

Pure's main competitors offer on-demand pricing as well, including Dell EMC's Project Apex, Hewlett Packard Enterprise (HPE) GreenLake, Lenovo TruScale Infrastructure Services and NetApp Keystone. The revamped licensing relies on Pure1 software analytics to help businesses accurately forecast storage needs, said Josh Petty, director of Pure-as-a-Service storage product marketing. 

Pure said it finalized its $370 million acquisition of container storage startup Portworx, and there has been "good progress" integrating the Portworx Kubernetes Data Management modules in Pure's roadmap for container support.

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