Thanks, everyone, for joining on, I think, the second to last session. I'm Jason Ader from William Blair. I'm pleased to introduce Rob Lee, who's the Chief Technology Officer for Pure Storage. Before we begin, I'm required to inform you that a complete list of research disclosures or potential conflicts of interest is available on our website at williamblair.com. From a Pure perspective, statements made in these discussions, which are not statements of historical fact, are forward-looking 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 Forms 10-Q, 10-K and 8-K. This feels like a day we should be having class outside, but we're gonna do it in here. Rob, we're gonna do about 10 minutes of slides, and then we'll have time for Q&A. Sounds good. Thanks for the intro, Jason, and thanks, everyone, for joining us. I know it's the last session and the last day of the conference. Hopefully, it's been a great conference for you. I wanted to just spend a few minutes up front and set the stage. I know a lot of you have been with the Pure story for a number of years. Some of you might be newer to the Pure story. Wanted to just set the context, you know, what we've seen over the last 10 years, more importantly, the opportunity set we see looking forward. You know, if I were to summarize in a nutshell, right, you know, Pure has really been about delivering the most modern data storage technology. We pioneered the use of flash. We used that as an entry point to disrupt the enterprise storage market. We have seen ourselves, over the last 10 years, be consistent share gainers in the enterprise storage market. Now you might ask, "Well, why is that?" All right? You know, I can give you a couple of answers, and I'll start from a customer's lens. You know, quite simply, it's because we give customers the most modern technology that's out there. We do it in a way that saves them a ton of headache along the way, in terms of management, in terms of operations. At the end of the day, we save them a ton of money as a result. You know, that you can measure, you can see that in a couple of different forms. You know, we're 2x to 5 x as efficient from a power, space, cooling perspective. You know, even more so, up to 10 x if you compare that to the systems we're generally replacing, which are hard disk- based. You can appreciate, given energy costs, given space costs, how impactful that is. We're over 10 x as reliable, and actually, that's understated, right? When we state reliability, when we state availability, we're looking all in. Our competitors will go to a customer and say, "Hey, this is our availability. We're five nines." They'll be proud of that, but there's an asterisk, and the asterisk is, "Except for planned downtime." We don't have planned downtime. We don't force customers into that position, so we're 10 x as reliable. If we look at a hardware component basis, we're 10x, 20x, 30 x more reliable. Happy to talk more about that. When we look at operational savings, we look at labor, we look at saving people time and headache. 5x to 10 x as efficient to operate. A lot of that is frankly, just taking lessons from the consumer space. You know, you don't. You pick up a phone, you buy a new phone, you don't read the manual. You know how to use it. We've designed that ethos into our products. We've supercharged that with automation. What we're doing in the Cloud operating model, you know, makes our products bar none, the easiest in the industry to operate. All of this translates to a dramatically lower total cost of ownership, driven by more efficient hardware upfront, more efficient, you know, labor costs, lower power, space, energy costs, to go run and operate. A lot of the reason for that, and really one of our critical advantages, is we have the most consistent product line. We're able to now meet all of a customer's needs in terms of data storage, really based on one consistent set of technology, one software technology, one hardware technology, one management platform. Now, why is that important? Well, if you're a customer, if you've got five different things you've got to go learn to manage, to operate, that's a lot of headache, right? If you're a customer and you're buying from a vendor that has to bring six, eight different products out to meet your needs, that's a lot of mouths to feed from an R&D perspective, right? We can go channel our innovation into one set of technology, deliver that across our platform. That sets us apart. You know, last but not least, our products are never obsolete, right? Our promise with Evergreen, I'm gonna dive into this a little bit, is once a customer comes onto Pure, once they've made that initial purchase, we keep that system modernized, we keep it always up to date. That customer never has to rebuy that equipment. That customer never has occasion to think about choosing a competitor, and that sets us apart. You know, if you were to boil this down, you know, from a technology lens to what we see as our four critical and sustained competitive advantages, really the four I would call out, number one is our ability to work directly with the flash, right? You know, folks look at the industry, you know, you look at hard disks, you look at flash. That's only part of the picture. You have hard disks, you have SSDs, and then you have what we do, which is working directly to the flash. The last 10 years have been about flash taking over from disk. What we see now is that with our software advantages, our ability to work directly with the flash, we're able to drive significant benefits in terms of efficiency, in terms of performance, in terms of reliability, that, you know, ultimately accrue to the, to us, accrue to the customer. This is what allows us to crack into the deepest tiers of disk-based systems, go address those at an upfront acquisition cost parity. We're unmatched in being able to do that with flash technology. You know, hard disks, as we've been very clear on the calls, we believe are dead. SSDs are not that much better, we're really starting to break away with our DirectFlash technology from the SSD roadmaps. I mentioned before, we have a highly consistent portfolio. That's, you know, what we would see as our second unique competitive advantage, and that's frankly, one that, you know, you can't go and, yeah. Once the cat's out of the bag, you can't go and undo. Once you have six, eight different products, you can't unify those into one. I think, you know, what we see from customers, what that drives is certainly ease of management, lower, you know, kind of operating overhead, but it allows us to innovate faster, right? I mentioned before, because we have one software technology, one hardware technology, every piece of innovation, that we put into the products, I can go and deliver those across the entire portfolio. So from a customer lens, you know, are you going to be able to get an easier, more fluid, more agile, and flexible experience from a vendor who can satisfy all your needs with one set of technology or six or eight? I think the answer is pretty clear. That's something, again, that, you know, once you've let that cat out of the bag, you really can't undo that. You know, we talk about ease of management, right? We've always been about simplicity. We took kind of the consumer approach that you see, perhaps from your phone, we brought that into enterprise technology. We've over the years invested heavily in automation and supporting our customers in terms of how they're managing, orchestrating. We're now taking that to the next step in delivering the cloud operating model. Really, what this means is, we took a look at, hey, what is it that customers like from the experience of operating the public cloud? Flexibility, the agility, the ability to not have to manage down to the hardware, but just say, "Hey, this is what I need. I need this much performance, this much capacity. I want it to behave like this. Go make it work." We're delivering those attributes in our Fusion control plane and our cloud operating model. Last but not least, Evergreen. This is the technology, the architecture, and the subscription set and business model that allows us to deliver on that promise of non-obsolescence. A customer buys with us, day one, that customer will stay with us and be constantly modernized over time. It's like getting in your car and driving to work. By the time you get to the end of the block, you've got new wheels on the car. You get to the freeway on-ramp, you know, your engine's upgraded, you've got, you know, more horsepower. You get to work, and your entertainment system is, you know, is all modernized. You never had to pull over. We're delivering that same experience with Evergreen Enterprise storage. That's a clear driver of our, you know, NPS score, our customer satisfaction. It also helps us with customer retention, right? We love refresh cycles. Every time a competitor forces a customer to disruptively have to forklift upgrade, junk their old equipment, buy new equipment, that customer has a reason to go put that estate out for bid. That's a selling opportunity for us, right? We never return the favor, and that's a huge advantage for us. Hopefully, you know, for those of you who have been with this story for a number of years, you know, these have been the advantages that we've had all along. I think, you know, I'd argue that, we have, certainly increased them, over time. For those of you who are new to the story, hopefully, this sets the stage, for, you know, where we see ourselves today, but also why we're so bullish about the opportunity set ahead of us. With that, maybe. Great. Have a seat. Great. Thanks, Rob. That's going to help frame some of my questions. I think first off, just on Evergreen, I think it'd be helpful for the, for the crowd to just understand, like, how the ownership experience has changed. Like, what did people have to do in the past with storage, the whole forklift upgrade cycle, and how you guys really kind of disrupted that? Yeah, absolutely. you know, historically, you have to remember, the storage industry, was built around hard disk technology. Hard disks, generally don't last longer than three to four to five years. Our competitive set have built entire product lines, business models around that concept. A customer, day one, would go buy equipment. Almost immediately, day two, day three, is starting to plan for: what does it look like? what do I have to do in year three or four when that equipment goes end of support, no longer becomes economical to run? I'm going to be forced to buy the latest version. It's going to be a large PS undertaking to go, you know, migrate my data from my old systems to my new systems. It's going to take me six months. That sounds bad, right? Now multiply that by 10, 20, 100. If you're managing lots and lots of arrays, a larger footprint, you know, we talk to customers that are constantly on that treadmill. There's always some piece of equipment that they're having to kind of manage through that refresh cycle. Versus with Pure, with Evergreen, being able to go to the customer and say: Hey, day one, once you're on Pure, we will continually modernize that estate. If you have to grow, you know, you can grow in place. As we produce, you know, faster controllers, better software, you get the benefits of that. If we produce DirectFlash drives, you want to better, you know, consolidate your footprints, get better density, efficiencies, we can go help you do that. It's a completely different experience. Yeah, it's almost like, I remember you guys talking, you don't have to rebuy your storage. You know, it's like in every four to five years, historically, you had to kind of rebuy storage effectively, right? Exactly. I mean, it's like if you buy a house, and year three, the tax guy comes along and says, "Hey, Jason, you know, your property taxes are now, you know, 4x as high. It's the cost of buying, you know, a new house down the road." You're going to kind of look, you're going to buy a new house, you're going to spend, you know, six months packing up, moving your stuff. You're going to lose half the boxes. That's been the historical experience. It's terrible, and it's something that we set out to change from day one. Great. I've often called you guys sort of the best house in a rough neighborhood. I'm sure that's not a huge compliment to you, but I think it's a reality just in terms of the investor in the stock market, just because you guys are primarily an on-prem data storage player. How do you counteract the kind of argument around on-prem storage being challenged by the migration to cloud, and where does that leave you guys long term? I think what we've seen from the customer base, especially over the last 3-5 years, definitely a maturation in the thinking around cloud, where that fits into the IT strategy. Five, seven years ago, you had a lot more companies that were all in on the cloud. "Hey, I'm closing down my data centers. I'm heading there." I think what we've seen over the last couple of years as folks have tried that route, they're running into a couple barriers. One is cost awareness, right? That's a big one. The second is technology limitations. The cloud was built around a different set of applications. Lift and shift isn't as easy as it seems. The third is skilling, right? You net that all out, and then certainly, you know, more recently, the focus on cloud costs. You know, I think that's forced customers to, you know, reevaluate that. That's why we're so, you know, invested in delivering the cloud operating model, right? We believe that the public cloud has, you know, certainly created a management model that makes a lot of sense. I think customers benefit greatly from that. It suits our product lines, you know, quite well. We aim to deliver that to customers. Whether they're running in the cloud or on-prem, our job is to, you know, be the best provider in both of those environments. Can you talk about your sort of cloud capabilities in terms of public cloud and some of the specific offerings you have there, and also some of your customers in that space? Yeah, absolutely. You know, we view the cloud really along a couple angles, right? Number one, we're, you know, helping customers run better when they're in the cloud. Number two, we wanna help them run like the cloud, like they do in the cloud everywhere. Number three, build for the cloud. Then, certainly, we can talk about how we're trying to help power the cloud directly. If we look at how, you know, we help customers run better in the cloud, primarily around Cloud Block Store and Portworx. This quarter, we talked about a large Cloud Block Store win. For those who may not know, Cloud Block Store is essentially our Purity operating system, the software that makes our FlashArray products hum. We've re-platformed that, targeted, optimized it for AWS and Azure environments. You know, what we found is that customers who value the enterprise features, reliability, need mission-critical storage for applications in those cloud environments, and need a very, you know, efficient way to go and manage that cloud infrastructure, are turning to Cloud Block Store. This customer we called out, after deploying Cloud Block Store, was able to save, you know, into the seven figures, in terms of their overall cloud infrastructure spend, because of the efficiencies that the software was able to deliver. You know, across the traditional workload sets with Cloud Block Store, delivering cost savings, and mission-critical capabilities that may not exist in the cloud, as well as Portworx, which is helping customers who are architecting typically net new applications, built on containers, Kubernetes. We believe we have a strong portfolio, to help customers in terms of cloud storage. Cloud Block Store and Portworx are software only effectively, right? That's correct, that's correct. Both of those are offered as part of our subscriptions portfolio. Cloud Block Store would be a piece of our Evergreen//One unified subscriptions, Portworx, being a component of the overall subscription portfolio. Gotcha. Then maybe talk about the I think historically, you guys have talked about percentage of your revenue coming from kind of public cloud customers. I know SaaS is sort of the big component of that, but maybe just talk about how that's played out. Historically, and this is going back several years, I think we've identified about a third of the business as of several years ago, was coming from, what we defined as the cloud SaaS MSP segment. We haven't updated that metric and really don't track that, you know, along those segmentation anymore. Mostly because, you know, as we get deeper into the large enterprise, you know, as you especially look at service provider, telco-type environments, the lines between large enterprise, and SaaS and MSPs and cloud providers, definitely starting to blur. You know, from my lens, you know, we're very much focused on, where can we add the most value, to those workload sets? I think we've seen a very steady expansion of how we're being used, whether that's in 5G environments. We talked about a win there a couple quarters ago. Whether it's certainly Meta has been well talked about, or whether it's with, you know, some of the other SaaS providers. ServiceNow is a big customer of ours. you know, we're really focused on broadening how we go after that segment. you know, again, it's hard to parse the lines between enterprise and cloud. We're just focused on the workload sets. Okay, great. Well, you brought up Meta, we gotta go into the requisite GenAI question. How does GenAI benefit Pure Storage over the long term? That's a great question. You never heard it before. Never. The first time in 20 minutes. Look, I think GenAI, the biggest impact it has is actually that it's making everybody across the industry, and I mean the broader enterprise set, pause, take a look and say, "Hey, technology's really promising. How can I leverage that? How can I make use of that?" Not everybody's gonna go and build trillion-parameter models themselves and hire thousands of machine learning scientists, but pretty much everybody out there is looking at, "Hey, how do I take advantage of that?" When I step back and I look at the AI opportunity. We We really look at it in two categories. The first is, how do we go support the folks that are building AI systems or the AI training environments? The second is the enterprise set. How do we go support, you know, people that are looking to connect their data into AI-powered applications? If we look in the first category, you know, AI training environments, you know, I think we actually opened that space many years ago, you know, working with Meta. We've expanded that quite nicely across a number of verticals, whether it's self-driving cars, financial services, and public sector security, you know, across the board. That segment continues to grow nicely for us. Anticipate that continuing to grow. When I look at the second, you know, opportunity set, the broader enterprise, trying to understand: How do I go make use of this technology? It's clear. A couple things are clear. Number one, technology is gonna evolve pretty quickly, it's hard to kind of say exactly what's gonna, you know, what that's gonna look like. Number two, data is gonna be super important, right? The, you know, the key to being able to take advantage of AI-powered applications is the data that enterprises have in their firm. Number three, you know, people are gonna have to change how they're thinking about storing that bulk data. Historically, the only consideration, the prime consideration, has been cost, right? If, you know, you're being tasked with storing data, but there isn't a usage requirement for it, you're gonna put it off in the corner on some disk-based system because you're just optimizing for cost. If now you're considering, "Hey, how do I connect this to an AI-powered application?" Well, it's got to be accessible. It's got to be warm, right? I think that transition from large amounts of data being cold data to needing to be warm data, I think plays exactly into the opportunity set that we conceived FlashArray//C, well, QLC, our QLC technology overall, FlashArray//C, and then now FlashBlade//E to go after. I think that's gonna be very constructive for us. Great, why did you win Meta? Maybe give us some sort of backstory there on how that deal played out and when, and, you know, were there competitors? Was it a bake-off, and why you ended up winning? Yeah, great question. Important to realize the Meta environment, we really think of it as two use cases in one. The smaller portion of that is supporting the direct training environment, you know, providing data directly into the GPUs. The larger part of the environment is really more of a bulk data storage, the large corpus of data that they're pulling from to do that work. We started in the training environment at a much smaller scale. We were chosen there for a balance of really high performance, but also reliability. These are mission-critical environments, very expensive resources waiting on the other end of those jobs, whether they're machine learning scientists or GPUs. And reliability and performance were key. We made them very successful in that environment. As they went to scale, the challenge was really achieving a balance of performance, power, space, efficiency, and frankly, at the end of the day, being able to fit into data center footprint, right? GPUs are also incredibly power hungry. If you have a fixed power budget, you want to try to get as much of that into the GPUs as possible. That's more that you can deploy. If we can offer 3x, 5x, 10x savings on the storage side, that's very meaningful. It's really the balance of those things. Great. Let's turn a little bit to go-to-market. You know, I've written about you guys as sort of crossing the chasm in the enterprise over the last couple of years. Maybe just talk about the evolution from a go-to-market perspective and how that's kinda. How you've gotten to where you are. Yeah, absolutely. I would say, I would call out two things, in terms of crossing the chasm, to borrow your words. Number one, is really the broadening of the portfolio, right? Five years ago, we were largely a one-product company. Today, you know, we're able to address the entire set of a customer's needs. That makes a very big difference, right? Especially in the enterprise, going into a customer, and saying, "I can address all of your needs," you can compete for the entire footprint. If you can only address a small portion of those workloads, well, the customer is forced to buy from other vendors. The channel partner is forced to bring in another vendor. We're now, you know, after, you know, a very intentional expansion of the portfolio, able to address all of those needs. Coupled with that is number two. You know, we've had a very intentional focus on growing our enterprise sales force to take advantage of this broadened portfolio. You know, when Charlie came on board, you know, Charlie, Kevan, you know, the entire management team, we've really invested in focusing our enterprise direct touch sellers, or direct touch sellers, you know, into the enterprise, and leveraging more of our channel partners to drive the commercial business, and I think you're seeing those two things working nicely together. Okay, great. let's talk about the macro environment and I mean, it's been a weird three years, I guess. You could say that. Yeah. Maybe just talk about how, like, what happened with COVID, did that impact you guys, and then post-COVID, and then now we're into sort of this macro crunchiness. Maybe just talk about how you guys have adapted or navigated through those, you know, choppy waters over the last three years. Definitely a lot of changes. You know, I think the biggest one is really on a what we've seen ebb and flow from a customer, you know, kind of buying decision process and dynamic. You know, I think entering into COVID and as well, the last couple of quarters, you know, we've seen customers who are definitely more cash conscious, who are definitely more cost, you know, aware. I think that's really benefited us on the subscription side of the house, right? Customers are now realizing, you know, and being able to see the benefits that we can offer in terms of, you know, not just our subscription portfolio, but the products as well. You know, with Evergreen//One, being able to, you know, pay as you use, retain that optionality, not have to overbuy day one, you know, has been a huge benefit, we've seen that in terms of Evergreen//One performance. Now, especially as we have FlashArray//C and now FlashBlade//E, right? The ability to go help customers address different price points, cost points, especially with the energy savings, right? If you look at the elements of cost to acquire versus cost to operate, cost to acquire is pretty clear. We're gonna keep driving that efficiently down over time. Cost to operate, what are the elements? Power keeps going up, right? Space keeps getting more expensive. Labor isn't really getting any less expensive. I think you're starting to see customers, really understand and value, those elements. Great. As you've met with investors, I know you've been on the road a bit. Paul's letting you out of your, out of your office. What do you think is the most underappreciated aspect of the Pure story when you meet with investors and you talk to them, and they say, like, "They don't get this piece," what do you think that is? Yeah, I think there's two things. I think number one is, I think investors, and the industry at large is still thinking in terms of disk versus flash. I think the differentiation we have between how we deploy flash, what our software is able to drive versus SSDs and the competitive set that's trapped there, I think is underappreciated. I think the second is, you know, how impactful Evergreen is, right? What that looks like from a customer journey, what that looks like from, you know, customer retention, and what that means from a, you know, an ability to go drive customer satisfaction and incremental opportunity. I think those two things, you know, are the biggest misunderstood elements of the Pure story. Okay, excellent. You've been with the company for about 10 years. You mentioned that earlier. Maybe just talk about culture and what makes Pure, like, a good place to work. I was just talking to somebody in the hallway, and they said their friend works at Pure as a salesperson, and they're really happy there, and, you know, just seems like a, like a good place to work. What's behind that? Well, you know, a couple things, I think. First, you know, culture evolves over time. I think we've grown considerably. We've grown in multiple sites, it's not about holding culture static and stagnant. It's about preserving the best properties. You know, I think it comes down to our values, right? We've always had a laser focus on serving the customer. It's a great rallying point for everybody across the board. You know, Pure has always been a place where new ideas are encouraged. In fact, you know, I often find that the most disruptive, best innovation comes from somebody challenging the way things are done. If you look at, you know, you followed Pure for a number of years, decisions that we made 5 years ago, 10 years ago, might have been the best decisions, given technology, given the market at that point in time. Well, when the market moves 10x or technology changes or price points change 10x, you need to make new decisions. We've always had a culture, we will always keep a culture of encouraging, you know, challenging the status quo, 'cause that's how you evolve. Otherwise, you stagnate. It's almost by definition. I remember actually, when you guys came out with DirectFlash, all of the, you know, trade rags and all the, you know, so-called experts really said, like: "What are these guys doing? Like, the whole industry is moving in the exact opposite direction." maybe just in the last minute or so, talk. I think the SSD stuff maybe may kind of go over some people's heads, but just talk about the difference in terms of DirectFlash versus SSDs and why that's so important to you. Yeah, I mean, our software is able to drive significant advantages. You know, maybe the best way by analogy is to describe, you know, most of the software out there in the industry is meant to work with hard disks. Hard disks are spinning media, mechanical technology. Flash is a semiconductor, works very differently. There's a lot of translation that has to happen. Thank you, Paul. There we go. All right. I'm gonna take more than the 30 seconds I have left. Go for it. Most of the software in the industry is built to work with hard disks. You know, you can see quite a bit of metal there. Flash, at a semiconductor level, works very differently. The issue the industry had in the beginning was software wasn't built to deal with flash. Flash needed a market. What did they do? They adapted, right? The industry developed SSDs. SSDs are a translation layer. They're meant to make semiconductor flash, solid- state, look like a mechanical device. It's like, it's like making a personal computer look like a typewriter, right? Not hard to see that that's inefficient. You know, I think the— what's less clear to people is that, you know, though the last decade has been about flash overall, setting itself apart from disk, what we're able to now drive with SSD, sorry, with our DirectFlash software, is pulling us apart from SSDs as well. We've always made the long-term bet that the consumer roadmap, 10 billion of these iPhones, and tablets and consumer devices were gonna drive the commodity roadmaps. We made the investment to make sure we could utilize this technology. Because of our software, because of our hardware, as these semis build denser chips, we just lay them down on the boards. Our software can manage those. Folks that are stuck on SSDs have to rely on the SSDs getting a lot, breaking through technology barriers to incorporate newer flash. They have to break through barriers in terms of how much flash they can pack into the SSDs, and they have to break through supply-demand barriers. Again, you know, 10 billion consumer devices are clearly driving a need for denser and denser chips. We can go take advantage of that. It's less clear that there's gonna be a volume market developing for 300 terabyte SSDs that are gonna cost you an arm and a leg for your home video server. This gets back to the long-term bet that we made starting the company, which was for us to succeed long term, for us to capitalize, we wanted to set ourselves up on the long-term product roadmap and the economic curves that are driven by the consumer industry. I think with DirectFlash, with our software, you're seeing the manifestations of that. Okay, awesome.