Pure Storage announced the acquisition of Portworx on 16-Sep-20. Why is this a ground-breaking deal for Pure? And what about Portworx’s position in the Kubernetes ecosystem?
What Will Happen?
Pure Storage will be merging with Portworx, a deal expected to close by end of September 2020. Pure Storage paid around $ 370M in cash. Portworx will operate further as new Cloud Native business unit within Pure Storage.
Pure Storage and Portworx are sending a strong signal to their respective customers about the intent and commitment: Portworx CEO, Murli Thirumale, will be leading this new business unit. The other key fact is that all Portworx founders are also joining Pure Storage. A third important fact is that Portworx software will continue as-is.
Why Portworx (and Cloud-Native)
What brought Pure Storage to consider Portworx? First and foremost, Pure Storage’s core business is storage and to a certain extent data management. We shouldn’t underplay what was achieved with Pure1, but at is core, the company manufactures & sells storage arrays.
Despite the constant innovation, enterprise storage is a competitive and crowded market segment. What drives the market (if not the hype) these days are cloud-native applications.
Quoting Pure Storage, 451 Research reported that 95% of new applications are now being developed on cloud-native platforms. When not developing net-new cloud-native apps, organizations are either considering the refactoring of legacy monolithic applications towards cloud-native or already somewhere in the middle of the refactoring journey.
Now while it is cloud-native doesn’t means that it must run in the cloud. In fact, some organizations operate according to hybrid models for a variety of reasons.
Portworx has built a platform and location-agnostic storage / data services layer for cloud-native applications. This particularly matters for major cloud-native production deployments: developers and business stakeholders need the assurance of solid IT Operations support as well as data management capabilities.
And it doesn’t matters only for cloud-native applications. It also matters to Pure Storage, because there is in theory a lot of room for synergies between Pure Storage and Portworx: complementary customer bases, no technology overlap, a fantastic boost and credibility shot for Pure Storage in the container world, and perhaps even better sales channel support for Portworx.
Talking about technology, some slides from Pure Storage seem to hint that Portworx might be deployed either standalone, or alongside other Pure products based on the use cases and architectures.
In fact, Pure Storage mentioned during the analyst call that Portworx will be integrated with Pure. This means in all likelihood Pure1, which is currently used to deliver infrastructure management and workload optimization services. Considering Pure1 capabilities, it can be expected that in the foreseeable future Portworx storage management operations (as well as predictive monitoring) will be achievable through Pure1.
On a side note, we also hope to see Pure1 expanded with data management capabilities, which would further increase the overall value of the Pure / Portworx ecosystem.
In their announcement slide deck, Pure Storage presents Portworx as “the leading Kubernetes Data Services Platform”. It would be hard to argue about this. Portworx has been GA since 2017 and has earned a reputation of trustworthiness, reliability and respect within the Kubernetes community.
Furthermore, Portworx’s focus on Enterprise-class data services is naturally aligned with Pure Storage’s strategy, and both companies are in the top tier of their respective market segments.
Is this the dream win-win deal that it appears to be? For Pure, we are tempted to say yes. This is a great acquisition which is not just about intellectual property. Putting aside the unfortunate effect of mergers (loss of back-office work positions), there is a fair chance that the entire Portworx technical / support / R&D teams will join Pure alongside the founders. This is by any means a reassuring sign for major Portworx customers.
Regarding Portworx and its investors, this has the look & feel of a great exit, at least for us outsiders. The company had raised a total of $ 55M over 3 funding rounds. It was purchased in cash for $ 370M, roughly about 6 times the funding value. We cannot predict the future, but the merger conditions seem to be really a win-win deal for both companies.
And customers? Here again, difficult to predict changes in pricing, as well as sales model and cycles, but customers should at least be covered from a technical / support perspective, and Pure has a rather good reputation on the market among storage peers, so we are not foreseeing any degradation. On top of that, cloud-native is all the rage and we expect to see further investments in supporting the growth of Portworx.
Perhaps the only downside is how the open source community will react to these news, especially proponents of “pure” (no pun intended) open-source ecosystems / frameworks. In any case, we are quite positive about this great acquisition which in our view gives a true competitive advantage to Pure Storage. Now just… one… more… acquisition (into the data management world, for example…) and Pure Storage will have an even stronger value proposition.