Keeping Pure Pure, Vol. 3 – Reaching Critical Mass in Patents
This week Pure Storage achieved another milestone on our journey toward long-term independence, this one related to intellectual property (IP) protection.
In founding Pure Storage almost five years ago, we set out to build the next great storage company. We pioneered the “no brainer” recipe for all-flash storage that is both below the price of disk and plug compatible with existing data center infrastructure. In getting this formula right, we have become the fastest growing storage company in history. Other landmarks for Pure include having raised $375M from public market investors including T.Rowe Price, Fidelity, Wellington and Tiger Global (the vast majority of which is in the bank); achieving a >$3B valuation from those same investors; expanding our leadership team and going international; and shipping our 1000th array last year, most all of which have displaced performance (oxymoron) disk technology.
We knew that our success would prove profoundly disruptive to the incumbents—with much of the $60B total spend on Tier 1 disk arrays expected to shift to all flash arrays (AFAs) over the next four year refresh cycle. A prototypical response to the existential threat posed by technology sea changes is for the legacy vendors to resort to litigation. Innovation is never easy—it takes an incredibly gifted team, clarity of vision, the right strategy, passion and supremely hard work. An entrenched incumbent, whose customers are stuck on a hamster wheel, deciding between a technology refresh (a.k.a. “buy a new array”) or facing a spike in maintenance fees, has little incentive to innovate in ways that could disrupt their existing business. (The Innovator’s Dilemma was, after all, written about disk.) Only when pushed by innovative competition do they wake up that a day of reckoning is at hand. The next step is often, then, to sue the upstart vendor in the hopes of slowing their momentum to buy time to catch up (see for example Keeping Pure, Pure Vol. 1 and Vol. 2), all the while milking the installed base with promises of innovation tomorrow if they buy more legacy today.
For the challenger, patents are an important tool to protect innovations and level the playing field with incumbents. To that end, Pure has organically grown a global IP portfolio of close to 150 patents and pending applications, with many more in various stages of preparation, that cover the full spectrum of innovation within our solid state storage products. As we have stated previously, we have great faith in our patent portfolio. As an illustration of its quality, we are thrilled to have just cross-licensed Pure’s patents with IP bellwether IBM, which will further enable both companies to pursue our respective flash businesses in the marketplace.
Organic IP focused on the future is essential but still sometimes insufficient to defend innovators from entrenched incumbents. To further level the playing field, Pure has just completed the acquisition of a number of existing storage patent portfolios totaling over 150 US patents, the vast majority of which are unlicensed by today’s big storage vendors. (One such patent collection was purchased from IBM in conjunction with the aforementioned cross licensing deal.) We’re convinced that by also owning inorganic IP that relates to existing legacy storage, we put ourselves in a stronger position to defend ourselves, thereby protecting the long-term interests of Pure’s customers, partners and shareholders.
Pure intends to take a moral high ground in the potential use of our newly acquired IP: We pledge that we will not make first use of these patents, but rather use this IP only to defend against aggression from those competitors who choose litigation over marketplace competition. Our goal is to keep the battle out of the courtroom and in customer data centers where it belongs.
No doubt not all readers will agree with our strategy. Some will say they do not believe in patents at all. Others will feel that using inorganic patents even defensively is inappropriate. Believe me, Pure would rather spend the money we are using to acquire patents on more engineers and more innovation. But make no mistake: Pure will not be deterred from our mission to build the next great storage company.
In doubt? If you believe these two statements:
- Storage customers and partners benefit hugely from the ferocious competition to determine which vendor(s) can deliver the move value for the money; and
- Provided all participants are behaving lawfully and ethically, the marketplace is where the winners and losers should be decided;
then you presumably also believe that incumbents should not be able to stifle innovation that they find disruptive to their business, such as when a company like Pure figures out how to deliver a 10X better AFA for less cost than the mechanical alternatives.
Going forward, our hope is that this significant expansion of our patent portfolio will serve as a clear warning that Pure is serious about defending our ability to disrupt a storage marketplace that is deeply in need of innovation, and moreover, that Pure is in this for the long haul. Yes, we acknowledge it’s going to be a profoundly disruptive transition as flash memory supersedes hard drives. But the vendors that do the best job of innovating to meet the needs of their customers and partners will ultimately prevail, not those that spend their time and money on legal stalls and distractions. Litigation remains a side show to that main event, a side show that should prove that much less relevant to Pure Storage going forward.
Now back to our core business, which is why after all we are here: Before you throw bad money after good on another hybrid or disk array refresh, we hope you will check out what the excitement is all about!