Supply chain environment 'most dynamic I've ever seen,' Pure Storage CEO says

Pure Storage CEO Charlie Giancarlo discusses how the cloud technology company manages to grow customer demand, addresses labor shortage issues, and deals with supply chain bottlenecks.

Video transcript

JULIE HYMAN: Shares of Pure Storage are rising about 10% in today's session. That's after the company reported a 37% rise in revenue and strong demand for its flash storage and other types of products.

Charlie Giancarlo is joining us now. He's Pure Storage chairman and CEO. Charlie, thanks for being here.

First of all, tell us what you are seeing from customers right now because what we're kind of seeing a little bit of this morning is indications from companies like HP and Dell seem to be showing that enterprise demand is strong. Is that what you're seeing? And give us a little more color on that.

CHARLIE GIANCARLO: Absolutely. No, we're definitely seeing that. Enterprises, especially global enterprises, are-- the demand is very strong, you know, both for their spending on the cloud but, frankly, also for spending inside their internal data centers. And, if anything, the cloud has given them inspiration for how their personal-- their internal data centers should be run. So, in fact, there is a lot of spend on digital transformation at this point in time.

A lot of that, of course, is spurred by the digital economy. You know, we can no longer rely on bricks and mortars to drive our businesses, and even traditional companies now are investing a lot more in their digital footprint.

BRIAN SOZZI: Charlie, what is this I would call great return to the office-- what does this mean for your business next year?

CHARLIE GIANCARLO: It's very important, actually. You know, what we find is that as a company that is growing and, if you will, growing by taking share and taking and building new customers, building new customer relationships, building trust, building confidence in new products and capabilities really is fostered by not just direct human contact but also by people being able to go into the office, being able to collaborate with one another, build on new ideas and new capabilities. And that is fostered by getting people together in meetings and creativity.

And so getting back into the office-- I think if you speak to anyone that drives larger teams for creativity, you'll find that creativity just goes up when people are able to get together.

JULIE HYMAN: And, Charlie, take a step back for a minute and look at your business. You know, I think with everything sort of migrating to the cloud now, how does your type of storage-- how does flash storage kind of fit into that? I know you guys have cloud solutions also, but how has your business sort of changed over the last five years?

CHARLIE GIANCARLO: Yeah. Well, I think the main thing that's changed is, as I mentioned, is that private companies who do run-- most nearly all of them do run a hybrid environment, meaning that they have their on-prem applications. They have things that run in the cloud. But they want to run their private data centers the way the cloud operates, and that is they want to give their developers access to capabilities, you know, basically through code-- allow their developers to be able to write their applications and define the infrastructure they need without having to go to IT to buy equipment to connect that all together.

And so it's really changed the way that our equipment is designed and our software is designed to allow the IT departments to build their own clouds for their developers and to make it really a hybrid cloud to work seamlessly with the public cloud so that customers can get the best price/performance of everything that they do.

BRIAN SOZZI: Charlie, your company is sitting on a lot of cash, $1.4 billion, almost two times the total debt on your balance sheet. How do you plan to use that cash?

CHARLIE GIANCARLO: Well, we continue to invest in the business. We have so much opportunity. We exist in a $30 to $50 billion market. We have an incredible development engine inside the company, and we invest very heavily in R&D, which really distinguishes us from our competition that generally has looked at, in our segment of the business, as a commodity. We really look at it as high technology, and we plan on continuing to invest in that.

And we look at M&A opportunities, and no doubt we will find some to help us to continue to scale. But for the most part, I think we're looking to internal development and creativity to allow us to continue to grow at very high rates.

JULIE HYMAN: Speaking of creativity, it probably took some to keep your supply chain going through all of this. So talk to me about how you guys are meeting that challenge in what is a tough environment right now and getting chips and getting other types of components.

CHARLIE GIANCARLO: Well, Julie, you're not kidding. I mean, it has been the most dynamic supply-chain environment that I've ever seen in, you know, decades in the business. Not only are our lead times for important components getting pushed out but, in some cases, they're almost impossible to find these days. And the situation changes almost every day, and so our engineers, our operations team really have been burning the midnight oil to keep up with all of this.

But, you know, over the years we've built really good relationships with our suppliers, contract manufacturers, and other partners, and we were there for them through the early days of the pandemic, really helping them get through this in a number of different-- number of different ways, and those relationships really are so critical when times get tough. So, you know, between having a really good team and having very good relationships, you know, it's just good, hard work each and every day.