According to the 2013 McClean Report, the total flash memory market (NAND and NOR) is estimated to have grown 2% last year to $30.4 billion. While growth in the flash memory market has been driven by the increased consumer adoption of smartphones, tablets, and other mobile devices, the enterprise segment is also shifting toward this segment. Flash memory is helping improve faster communication channels and system response times in organizations. A Gartner study estimates that the enterprise Flash memory market will be worth $4 billion by 2015.
Pure Storage’s Story
Mountain View–based Pure Storage was founded in 2009 by John Colgrove, one of the founding engineers at VERITAS Software. Pure Storage was founded with a mission to enable the widespread adoption of flash in the enterprise data center. Today, Pure Storage’s technology has enabled it to offer products where the cost of Flash memory is able to compete with disk storage.
Traditionally, Flash memory storage has been considered a more expensive option than disk storage. However, Pure Storage’s key product, FlashArray, has managed to compete with disk by implementing technology that deploys consumer-grade flash memory to enterprise-grade storage. In addition, their products deliver a three- to fourfold improvement in throughput and response times while ensuring use of fewer servers and reducing costs.
The company earns revenues by selling Flash memory products to enterprises for an estimated price of $5-$10 per gigabyte. They believe that their products are able to offer a cost per GB storage to their customers at a price that is less than half of the cost of performance disk storage. Their products are used by customers such as Siemens, Yodle, Sierra Nevada Brewing and the city of Davenport, Iowa.
Pure Storage’s financials are still kept private. Market reports suggest that the company is growing at a strong rate of 25% to 30% per quarter. To date, they have received $95 million in venture funding from investors that include Sutter Hill Ventures, Brad Garlinghouse, Greylock Partners, Redpoint Ventures and Index Ventures. Their latest round of funding was held in August 2012 and helped them raise $40 million. They plan to use these funds for expansion in the European markets and to acquire more sales and engineering talent.
As part of this growth plan, earlier this year, Pure Storage expanded their senior management team. They added David Hatfield as president and Christopher Zang as their vice president of support. Both leaders have deep domain expertise in enterprise information technologies and market and will help Pure Storage implement international expansion and an aggressive go-to-market strategy during the year.
Analysts expect Pure Storage to be filing for an IPO shortly. For now, the company has maintained silence on its IPO prospects.