{ "docId": "019dd923-622c-750b-8b98-491cf8c853e8", "docSlug": "3b36a8e60d92", "documentTitle": "Pure Storage, Inc. (PSTG)", "authorId": "53_Kerrisdale_Capital", "authorName": "Kerrisdale Capital", "documentKindSlug": "research-note", "documentKindLabel": "Research note", "sourceTypeSlug": "short_seller", "sourceTypeLabel": "Short seller", "presentationDate": "2025-09-01 00:00:00", "orientation": "portrait", "aspectRatio": 0.77272725, "pageNumber": 26, "pageCount": 35, "prevPage": 25, "nextPage": 27, "slideType": "research-note", "function": "analyze_data", "density": "dense", "nDataPoints": 0, "notes": "Contains multiple expert testimonials/quotes used to support the investment thesis.", "elementsJson": [ "paragraph", "quote_block" ], "metadataConfidence": 0.9, "imagePath": null, "slideHref": "/slides/019dd923-622c-750b-8b98-491cf8c853e8/26", "deckHref": "/decks/019dd923-622c-750b-8b98-491cf8c853e8", "deckJsonHref": "/decks/019dd923-622c-750b-8b98-491cf8c853e8.json", "deckAnchorHref": "/decks/019dd923-622c-750b-8b98-491cf8c853e8#slide-26", "components": [ { "bbox": null, "kind": "callout", "text": "Pure is relatively poorly positioned to capitalize on the two largest technology themes of the day: the cloud and AI.", "attrs": null, "subkind": null, "toolName": "Visual emphasis", "toolSlug": "visual-emphasis", "confidence": null, "componentId": "019dd952-fb90-708a-8692-1689006e98eb", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.16, "w": 0.78, "x": 0.11, "y": 0.27 }, "kind": "paragraph", "text": "In our research, perhaps the only enterprise storage vendor that elicited much talk of positive momentum is NetApp. The company is pushing hard in the AFA market, which can get lost in NetApp’s reported results given its large slow-growth legacy hybrid systems business. Although Pure has placed appliances at leading hyperscalers on behalf of clients for private cloud deployments, NetApp is arguably the only OEM that has achieved material hyperscaler penetration with its AFAs, thus enabling dramatically better public cloud integration. NetApp also excels at the full range of workloads. Finally, Pure isn’t the only AFA vendor with differentiated software. NetApp’s ONTAP operating software has emerged as a strategic advantage.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "07253932-842a-4399-9dcd-3f27732c651e", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.22, "w": 0.78, "x": 0.11, "y": 0.61 }, "kind": "paragraph", "text": "Concerningly, Pure is relatively poorly positioned to capitalize on the two largest technology themes of the day: the cloud and AI. To the extent enterprise workloads continue migrating to the cloud, Pure’s enterprise business begins to resemble a melting ice cube. We believe many in the investor community assume that just because Pure offers high performance, all-flash solutions that it must be an “AI play”. To the contrary, Pure’s historic strength has been in the handling of structured data – that is, block storage run on appliances employing VMware virtualization that benefit from services such as data deduplication and compression where Pure excels. Virtually every industry participant we interviewed highlighted that Pure has been constrained by its relatively poor performance with unstructured data. AI applications are dominated by unstructured (file and object) data, which explains why Pure is conspicuously absent from the AI-related press release parade. We estimate that exposure to these two themes likely contributes less than a quarter of total revenue.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "60951af0-4fcf-48f9-bd63-ea95ed9bf3f4", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.12, "w": 0.78, "x": 0.11, "y": 0.09 }, "kind": "paragraph", "text": "undeniable force of incumbency. The hardware element of the business has long since commoditized, and as one former Pure employee put it, “it’s all knife fights in phone booths... you’re not really taking share any longer; you’re just trading share amongst those three primary players.” An enterprise IT reseller with whom we spoke was even more somber.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "74ee84c6-18bf-45c3-a091-dea40579c263", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.04, "w": 0.78, "x": 0.11, "y": 0.84 }, "kind": "quote", "text": "“The problem with Pure has always been unstructured data...especially compared to VAST which started from unstructured data...” - Data storage product manager at leading hyperscaler", "attrs": null, "subkind": "testimonial", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "14637306-1839-44ff-8a5b-b6b771e4d4c3", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.16, "w": 0.78, "x": 0.11, "y": 0.44 }, "kind": "quote", "text": "“[Pure was] beating up NetApp. I’ve heard this from my friends at NetApp. Then NetApp did something brilliant. They [licensed] their ONTAP code very attractively to Amazon and the other hyperscalers. So Amazon was the first to actually build out [a hybrid cloud] FSx solution. We live in a hybrid world today, right? When FSx came out, that’s when I noticed NetApp being competitive again against Pure. They made it very easy to snapshot data from on-prem to the cloud and from the cloud to on-prem. They crushed it. That was something that Pure was lacking.” - Former data storage architect at AWS", "attrs": null, "subkind": "testimonial", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "6348db03-68bf-43ed-b4b6-cc998c10187a", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.07, "w": 0.78, "x": 0.11, "y": 0.18 }, "kind": "quote", "text": "“You can quote it from all three of those vendors, Dell, Pure, and NetApp and get a similar solution with a similar price. So, you’re looking at Toyota, Honda, and Nissan, right? They’re really close.” - Field CTO at IT reseller/integrator", "attrs": null, "subkind": "testimonial", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "d55f47f8-faf2-49a1-877d-0e463b83a845", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "quote", "text": "\"it's all knife fights in phone booths... you're not really taking share any longer; you're just trading share amongst those three primary players.\" — Former Pure employee; \"You can quote it from all three of those vendors, Dell, Pure, and NetApp and get a similar solution with a similar price. So, you're looking at Toyota, Honda, and Nissan, right? They're really close.\" — Field CTO at IT reseller/integrator; \"[Pure was] beating up NetApp. I've heard this from my friends at NetApp. Then NetApp did something brilliant. They [licensed] their ONTAP code very attractively to Amazon and the other hyperscalers... They crushed it. That was something that Pure was lacking.\" — Former data storage architect at AWS; \"The problem with Pure has always been unstructured data...especially compared to VAST which started from unstructured data...\" — Data storage product manager at leading hyperscaler", "attrs": null, "subkind": null, "toolName": "Authority citation", "toolSlug": "authority-citation", "confidence": null, "componentId": "019dd952-fb90-708a-8692-1a47d927cffa", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [], "frameworks": [], "arcBeats": [ { "to": 31, "from": 26, "beatId": "b7b9d07d-8a29-40c7-aabc-41ddb9147aac", "arcName": "Problem-Agitate-Solution", "arcSlug": "problem-agitate-solution", "beatName": "Research Note", "beatSlug": null, "evidence": "The document presents research notes on Pure Storage's competitive positioning and financials", "position": 3, "confidence": 0.8, "parentBeatName": null, "parentBeatSlug": null } ], "loops": [ { "to": 32, "from": 5, "name": "Cost Of Inaction", "slug": "27-cost-of-inaction", "bestFor": "Urgent budget requests, compliance, risk mitigation", "matchId": "f175e9df-40bd-4f68-b964-eed15e12ff5a", "evidence": "The document highlights the risks of investing in Pure Storage", "position": 0, "objective": "To highlight the risks of investing in Pure Storage", "structure": "The Status Quo -> The Hidden Costs Accumulating -> The Future State of Inaction -> The Tipping Point", "confidence": 0.7, "description": "Quantify what happens if the audience does nothing" } ], "imagePathAlt": null, "thumbSrc": null, "thumbSrcAlt": null, "locked": true }