Nutanix intends to dominate the world of hyperconverged infrastructure and everything software. Incepted in 2009, the cloud computing software company that sells HCI appliances and software-defined storage went public last year. IDG India had an extensive interview with Dheeraj Pandey, founder, CEO and chairman at Nutanix on Wall Street, hybrid cloud, multi-pronged GTM and more.
First things first, how has Nutanix fared since it went public a year ago? Have there been any hiccups?
It has been four quarters since out listing price of sixteen dollars. The stock has touched 43 and has been over 30 percent on an average above the listed price. Nutanix is in the phase where the markets take at least two years to trust you as a vendor. It's like the large enterprise buyer that tends to be skeptical amid all the market noise. Any company that went public had two years in pause. That’s the process of healthy skepticism of public markets and we are half-way through that journey. Consistency, execution and performance is the only course to stay focused and keep growing as a leader in HCI (Hyperconverged infrastructure).
We know the company’s thesis and we live in our bubble. Wall Street does not know that thesis and they do not understand Main Street (employees, customers and partners as stakeholders of Nutanix). Main Street is the place of real action. Main Street leads, Wall Street lags. We just have to prove our existence as an awesome company and Wall Street is the side effect which takes care of itself or not.
Would Nutanix’s dominant position in HCI help you get there faster? Is the adoption of hyperconvergence by organizations actually as rapid as perceived couple of years ago?
The adoption of HCI undoubtedly and perhaps expectedly has been very rapid. It is probably the fastest growing rearchitecture in the history of the tech industry - more than client-server, more than x86, faster than virtualization.
When VMware was at our stage, it could barely touch Oracle and SAP workloads. Nutanix today has tons of SAP and Oracle workloads in its customers’ infra. We are targeting the core of the enterprise. It will take the enterprises a long time to move it to a rented model as we are suggesting them that they probably should not think now as it becomes too expensive to rent for known workloads. Our team figures out on how to transform the same IT infra seamlessly on the new-age Nutanix platform. This was unprecedented a decade ago when VMware was pitching virtualization story. Even AWS today can barely spell SAP.
Most of fortune 500 companies are driven by Nutanix deployments running SAP as one of the examples in their factory floors. This was unheard when paradigm shifts in technology world occurred around 10 years ago.
But HCI is perhaps Highly Confused Idea with varied interpretations by almost every enterprise tech vendor like CISCO, HPE, Dell, Lenovo running the race of hyperconverged infra?
Whenever something (new concept) gains credibility in the marketplace especially in the fast-moving tech world, there will be enough and more ankle biters.
In 2011, the incumbents were very confident that Apple would never create a dent in the enterprise world. Those traditional PC giants in the enterprise business built tablets wherein there was Palm OS, HP WebOS, Cisco Cius to name a few. Dell also ventured into smartphones. When something gets frothy and a leader has created a market, the followers follow assuming that they have the account controls. But that’s not how the consumers and even enterprises play these days.
Cloud is about massive consumerization of the enterprise. The enterprise no longer look at the vendors as the one who delivered the commodity server last year and will be effectively good to deliver cloud OS this year.
The market reports indicate that Nutanix hybrid cloud is not the preferred choice by CIOs and IT leaders versus established players like AWS, Microsoft, and VMware. How will you catch up?
It’s very early to talk or comment as hybrid itself is in the ‘rite of passage’ phase. Nobody knows the hybrid cloud in its entirety today and if anybody claims they do then they are bluffing. The idea or the concept of making two things (private and public) look and work like one is a five-year journey at the very least in innovation, computer science, systems building, fusing two designs, two clouds with one experience. Hybrid is not something facile as it takes time to build on the right strategy and deploy the same for the end-organization.
“Hybrid is exactly in the same phase like HCI six years ago which lies around converging private and public into the new converged infra. And the how of cloud will matter and not what of it.”
Dheeraj Pandey, Founder, CEO & Chairman, Nutanix
The good news, however, is that everybody is now converging on the concept. When we initiated hyperconvergence, nobody was convinced that the concept can be executed differently. Honestly, a major chunk of hybrid cloud today is exactly where converged infra was around five to six years ago. There were many combinations of three companies (tech giants) coming together around that time to put server, storage, networking and other things in a single rack. The window of opportunity for these short-lived products like VCE, FlexPod to ride the wave of converged infra or cloud has totally faded away.
At the time, when Nutanix concept was seen as a toy or science project, our team had the absolute conviction to lead HCI space. Hybrid is exactly in the same phase like HCI six years ago which is converging private and public cloud that becomes the new converged infra. And the how of the cloud will matter and not what of it.
Nutanix is solely focused on delivering enterprise hybrid cloud for the enterprises that enables the IT team to focus more on apps and services that power their business. And our technology helps achieve companies leverage power of hybrid with One OS, One Click.
VMware remains your nearest enemy (or frenemy) even a year after Dell acquired it. What’s the game plan to beat your biggest competition?
Enterprise computing is mimicking personal computing. Apple builds iPhones and competes with Samsung but the phone maker sources the touchscreens from Samsung. Google and Apple compete on OS but apps like Google Map work on Apple. Apple uses Amazon Cloud but they compete on home device Echo from Amazon. The idea of competing and cooperating are hand-in-hand. Netflix’s biggest competition is Amazon videos and its biggest partner is AWS is another example.
Gone are the days of a zero-sum game in the tech world. As companies grow, they need to act like a community of nations. There is no such thing as permanent enemies or friends.
We do have VMware and Nutanix work side-by-side at some customer infra environments. We are not trying to boil the ocean by going after competition in accounts. We are not here to change much but we ask the customers to try Nutanix for one workload or one App, then second and then we gain the trust of each other. Why still pay for Hyper V when it is the means to an end?
Let’s talk about Nutanix’s two-pronged GTM. How have the scales tilted with go solo and piggyback (joint GTM) with tech companies like DELL, Lenovo to name a few?
We are living in the world of a multi-channel commerce. At the end of the day, there is a channel with Arista, there is a channel with Lenovo, and so on with other leading technology companies. And the best companies who want to become ubiquitous they cannot be a single channel commerce company. That’s why even our public cloud will be yet another channel with a different consumption model. You can use a credit card with no humans needed to be part of the transaction. Nutanix continues to drive this scope further and we have to become even more multi-channel commerce company.
What the update on the company’s indirect route through channel partners? What makes this ecosystem – most of them are existing partners with HPE, Cisco, and others - tick with Nutanix?
There is mix of ‘born in the cloud’ channels and traditional partners (systems integrators and service providers) under our fold. It is a cycle of creative destruction where 20 percent lead the pack and 80 percent follow and adapt to the new tech trends. At an average of 20 percent of enterprise channels are innovative to explore new age technologies like cloud, HCI. A majority of them (about sixty percent) need to be taught, pushed, forced and coursed and the remaining 20 percent that seldom changes to new trends eventually die.
Main Street leads, Wall Street lags : Nutanix CEO
· Half way in two year phase of listed companies to gain market trust.
· Current price is 30% higher on average (of listed price) in past four quarters.
· We internally know the company’s thesis better than anyone else.
· Wall Street does not understand the place of real action i.e Main Street.
The early adopter (20 percent) channels leading with Nutanix realize the importance of product quality, customer service and all that matters to the modern organizations. These new-age entrepreneur channels are both optimistic and paranoid at the same time. Optimistic because they can build the business on the next wave of innovation and paranoid because they anticipate the current (traditional hardware box) business to die soon.
Many ‘me too’ channels are just followers and not true entrepreneurs. Order taking in channels will die fast with the digitization of channels. The direct relation of end user with service provider will lessen the human mediation as the distribution of three layers of people will be up for grabs in the coming years. The best channel partners know what it means to disrupt themselves and understand the nuances of delivery one more time. Those who don’t innovate will eventually die and channels who explore hybrid cloud will have happy customers.
How would Dheeraj demystify the HCI jargon for CIOs and IT decision makers? Any pitfalls they should avoid?
Take baby steps. Disrupt status quo. Think about what it means for the cloud to come to you.
HCI by itself is like the words phone and smartphone. HCI will vanish as every infra will be hyper-converged in the next three years, then what? Every smartphone is called a phone today.
CIOs and IT leaders need to worry about Opex in a big way, leverage automation more, understand the value of machine learning (to have machines do more with machines rather than have humans do more with machines) and finally make the entire IT infra secure.
What are your ‘top-of-the-notch’ priorities at Nutanix for the next couple of years? What silver linings do you see on the horizon of enterprise computing?
Continue to delight Main Street is the big priority. And second, continue to focus on the ways to delight Wall Street. These two words - which I care for - are very powerful yet extremely simple. They are easy to democratize and have everyone understand Main Street and Wall Street.
The idea of the cloud will become more decentralized what we thought will be central. Modern cloud will be distributed and decentralized. The second trend is the fact that proprietary hardware is almost dead. Organizations will use proprietary hardware except that it will be in their own clouds. There is value of a big cloud provider building some hardware assists but it’s hidden behind a service. It won’t ship and sell as a single purpose thing. That reminds me of the massive innovation with DSLR camera. But the companies who could not foresee the trend of camera is an app and photos are digital were betting against the curve. Software-defined everything concept is real. Everything is an app like it was in the personal life.
And we expect some breakthrough in next-gen silicon like nano technology that will carry us to the next two decades of innovation which is the core of industry’s quantum leap in tech world.
Dheeraj Pandey’s 7 Tech Trends
· Cloud is distributed and decentralized
· Proprietary hardware is almost dead
· Software defined everything is real
· Artificial Intelligence is like oxygen
· Everything is an App in digital world
· Every Infra will be hyper converged
· Hybrid Cloud is not something facile
Your take on the digital era’s biggest tech trend - Artificial intelligence. Is AI for real in the enterprise space?
Artificial Intelligence is like oxygen which everyone will breathe or not. It’s like automation of IT wherein building a strategy around automation has been beneficial to most companies. AI is not the end but it is the means to an end. Infusing AI in a culture of developers, architects and reducing human intervention by usage of machines is now becoming popular. The man-machine interface will be more frictionless as the idea of simple decision escalated to humans will become arcane in the next five to ten years.
Humans will be needed but for higher level judgments and by the way, the definitions of the judgments will keep changing. The cognitive processes in the human brain are million times more complex and evolved than a machine can simulate and hence most of the rote stuff will be executed by machines. And again that routine work will be redefined regularly.