Pure CEO Dietzen steps down for leader with skillset for growth at scale

Scott Dietzen moves over to Chairman of the Board, with Charles Giancarlo replacing him as CEO of Pure.

Outgoing Pure CEO and new Chairman of the Board Scott Dietzen

Coincident with Pure Storage releasing their Q2 financial numbers, the company also announced that Scott Dietzen, who has led the company for seven years, has stepped down as CEO. His replacement is Charles Giancarlo. Dietzen becomes Chairman of the Board of Directors.

Dietzen has been emphatic that the decision for him to move aside was his, and there was really nothing in Pure’s numbers announced yesterday to suggest otherwise. Quarterly revenue of $224.5 million was up 38 per cent year-over-year, which was three per cent ahead of the midpoint of guidance. The company continues to lose money – 11 cents per share, down from 16 cents a year ago – but Dietzen has always maintained that Pure’s failure to hit profitability to date has been part and parcel of the company’s strategy.

“We could have been profitable already, but to do so, we would have had to slow growth,” he told ChannelBuzz last fall. “No one has ever grown at the pace we grow. We take cash from the business and invest it in engineers and support people to continue that success. The last four quarters [as of November 2016] were 30 million cash flow negative, but that drove $600 million of revenue.”

That being said, Dietzen said yesterday, that Pure really needed a CEO with more experience in managing a growing tech company at scale.

“This is, without a doubt, the hardest decision I’ve made in my career,” Dietzen said yesterday in a blog post. “I realized that the Company needs a CEO with the experience necessary to lead a multi-billion dollar, multi-product public company. My strengths lie in helping craft product and marketing strategy, in recruiting, in developing the culture, and in building customer and partner relationships. Going forward, in addition to all of the above, Pure needs a CEO that understands growth at scale, who brings stronger operating skills essential for unified execution, and who has greater experience with Wall Street, while at the same time fiercely guarding our unique entrepreneurial and innovative spirit.”

Dietzen said that Giancarlo is the individual best suited to scale Pure to become a multi-billion dollar global leader in data infrastructure and solutions.

New Pure CEO Charles Giancarlo

“I first met Charlie several years ago, and was impressed then with his tenure at Cisco, where he went from helping lead a startup acquired by Cisco to overseeing 30,000 employees and more than $38 billion of product sales, while serving in various senior executive roles, including Chief Technology Officer and Chief Development Officer,” Dietzen said. “As we met frequently throughout this process, I became enthused about Charlie’s operating experience across Silver Lake Partners’ portfolio, including as Avaya’s Interim CEO, as well as on the boards of outstanding companies like Arista, Accenture and ServiceNow. I wholeheartedly believe Charlie will help us to continue to drive our growth and market leadership with the spirit of innovation, entrepreneurship and quality our customers and partners count on. But more than anything, I believe Charlie will be a great Puritan, both safeguarding and evolving the culture that has made this company so special.”

Giancarlo, 59, was Managing Director, Head of Value Creation and later Senior Advisor at Silver Lake from 2007 to 2015, where he focused on business improvement and investment opportunities across strategic and operational initiatives for Silver Lake’s portfolio companies. From 2008 to 2009, he was Interim President and CEO of Avaya. Between 1993 and 2007, he has multiple senior executive roles at Cisco, including Chief Technology Officer and Chief Development Officer.

“After Silver Lake, I took my time and was diligent about finding the right leadership opportunity with a company that would have leading products, a passionate, talented and driven team, a huge potential market, and loyal customers and partners,” Giancarlo said. “Pure has a great foundation on which to build, and outstanding potential. I am extremely grateful for Dietz’s guidance and look forward to working with him in his new role as the Chairman of Pure’s Board. I’m also very grateful to the management team for welcoming me this week to Pure, and I look forward to meeting and getting to know the rest of the Pure team in the coming weeks and months.”

Giancarlo did not provide any hints at this extremely early stage of any changes he might consider in Pure’s strategy, indicating only that he has a lot of consultations to make.

“It’s an incredibly exciting time in Pure’s history,” he said. “The strength of the business and growth opportunities ahead are tremendous, and I could not be more aligned with the Company’s vision to be the global leader in data infrastructure and solutions. I’m very eager to get to know our customers, partners and resellers – I’m excited to learn about your thoughts on Pure and our products, and to help Pure better meet your needs. I’m also looking forward to speaking with our investors and analysts, and to do everything I can to better enable Pure to create value for you, and all of our stakeholders.”