Despite price increase, Everpure CEO confident of leading storage market share

“I guarantee you that by the end of this year we will ship more flash than all of our competitors combined, assuming we can get it, which we can,” says Charles Giancarlo, CEO of Everpure.

While Everpure reached its first US$1 billion quarter this year, the storage and data center vendor is also impacted by the global supply chain and shortage problems of chips. The vendor prompted to increase prices, with Charles Giancarlo, CEO of Everpure explaining clearly how the issue had impacted them.

At Pure Accelerate summit in Las Vegas, Giancarlo again highlighted the issue, explaining to partners and customers why it needed to be done and also felt the issue is not going to solve very soon.

Despite this, the CEO remained confident that Everpure will meet the demand for all its flash to customers this year.

“The interesting thing is as of last quarter, we now ship more flash than any other competitor. And I guarantee you that by the end of this year we will ship more flash than all of our competitors combined, assuming we can get it, which we can,” Giancarlo said in both his keynote address at the summit and also during his keynote to partners at the partner summit.

During the media session at the summit, Giancarlo explained that he does have a lot of sympathy for customers because its not just of the increased price as customers have also been unmoored from the standpoint of whether or not they're getting a good deal.

“First of all, we live in an industry that generally deflates. In other words, pricing goes down over time. That's been true for decades. And now, all of a sudden, not only is pricing going up, but it's going up by an incredible amount. And now the customer doesn't really have a basis upon which to know if they individually are getting a good price or not. So I have a lot of sympathy for customers overall. But this is a worldwide phenomenon. It's not just ours,” he said.

Giancarlo also mentioned that its not just data storage that is affected but every component of the semiconductor, form a $0.10 part or a $10,000 part. As the semiconductor is a fixed-cost business, he said it takes years to build and get a fab up and operating, with billions of dollars in investment.

“They don't come online at the flick of a switch or at the snap of your fingers. And so when the demand far outstrips the total capacity of semiconductor fabs, where it's going to take years to catch up to that demand, pricing just skyrockets. The fab capacity has also shifted towards the AI environment, taking capacity out of even the cheapest components. So it's a world we're all going to live in,” he added,

At the same time, Giancarlo believes the situation has also brought back the hybrid market or the hybrid hard disk and flash market.

“That has a new lease on life for a period of time. That's probably been the major change. But outside of that, it's affected the entire world,” he said.

When asked about accusations of profiteering from the situation, Giancarlo explained that Everpure is sharing the pain and the load as well.

“We have a proof point. And the proof point was we indicated in our fourth quarter call that we were going to operate at the lower end of our gross margin range, and we did. Clearly, that was a decision that we made. And that tells you whether or not we're profiteering on this. If your gross margins go up, we're effectively a middleman for semiconductors. We have a lot of software and so forth. But our physical bottom is affected by the price that we have to pay for a semiconductor, which has gone up, somewhere in 6x to 8x in just the last six months,” he added.

“It's breathtaking. Our prices have gone up by far less than that, and we're operating at a lower gross margin and that's the proof point. We've been following competitors' price raises. They've been sooner than ours, and they've been larger than ours. So I would argue we're not profiteering, and the proof is in our financial results,” he said.