Source: SDx Central :Vdura CEO Ken Claffey unleashed a serious broadside at Everpure, accusing its rival of profiteering from the memory crisis.
Everpure CEO Charles Giancarlo wrote in a recent open letter outlining the vendor’s price increases, which have jumped around 70% since the beginning of the year. The all-flash storage firm attributed the increases to external market forces, while claiming it was absorbing some of the cost itself.
But in a lengthy rebuttal, Claffey went on the offensive, pointing to Everpure’s expanding gross margins as evidence that the vendor is allegedly profiteering rather than suffering.
Claffey referenced Everpure’s fourth-quarter financials, which saw revenues rise 20% year-over-year, noting, “if component costs really rose 4x to 10x, a vendor truly absorbing the pain would show gross margin compression. Gross margin percentage expanded. That is not absorbing pain. That is what profiteering looks like when you run an appliance business with pricing power: bill of materials (BOM) costs massively increase, margin percent stays flat for the earnings call, margin dollars expand significantly behind it, and the customer covers the difference via big pricing increases.”
On a cost-per-usable-terabyte (TB), Claffey claimed flash is roughly 20-times more expensive than hard-disk drives (HDD), and that the industry spent years obscuring that with manipulated data reduction ratios and optimistic price projections.
“No marketing chart can make that gap disappear, and Everpure’s letter, which raises prices 70% in a year on top of an already-large gap, has just removed the last fig leaf,” Claffey wrote. “The flash emperor has no clothes.”
Claffey went as far as to claim hyperscale brands deliberately avoided shifting to an all-flash architecture, suggesting their vast engineering teams found the pricing didn’t add up.
“Every single [hyperscaler] runs a mixed-fleet, software-defined architecture. Just enough NVMe (non-volatile memory express) flash to saturate the workload, then HDD for everything that doesn’t need flash speed,” Claffey claimed. “[Hyperscalers] understood that flash is a performance medium, not a capacity medium, and that pricing your infrastructure against a single commodity you don’t manufacture is a strategic error you only get to make once.”
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Giancarlo and the Everpure team noted that the memory market’s disruption is here to stay for the time being, with the CEO’s letter stating it could last “far longer than the COVID-19-era disruption.” However, he pledged the vendor was keeping prices “significantly below our actual supply chain cost increases” owing to its product design reducing the total amount of necessary components and improved data compression abilities.
But Claffey’s campaign continues by claiming that no all-flash (NAND) vendor has the power to alleviate the situation.
“Roughly 90% of the bill of materials in a modern all-flash array is the SSD (solid-state drive) or raw NAND itself. Everpure does not make NAND. Vast does not make NAND. Weka does not make NAND. None of them controls its cost, its supply, its allocation, or its roadmap,” Claffey wrote. “Their architectural raison d’être was to make cheap flash cheaper. And now their own public letter concedes flash will not be cheap for years.”
Claffey and company aren’t exactly disinterested observers, with it actively pitching a competing mixed-fleet architecture that combines NVMe flash for performance with HDD for capacity. The vendor has also launched a Flash Relief Program, explicitly promising to undercut all-flash vendors like Everpure by 50%.
“The flash emperor walked through town for a decade in a robe that was never there. Giancarlo’s letter are the moment the child pointed,” Claffey’s post reads. “The customers who understand what just happened will spend the next decade operating on very different economics than the customers who don’t.”