Nutanix Partners ‘In Shock’ After Dheeraj Pandey’s Sudden Exit

‘He’s been the driving force, the face, and really the spirit behind Nutanix since it started. This is huge news for partners. I’m in shock,’ says RoundTower Technologies’ Craig Manahan.

Nutanix partners are shocked Nutanix co-founder and CEO Dheeraj Pandey is leaving the company that he built into a $1.6 billion hyperconverged and hybrid cloud software star.

“I’m really surprised. This is his company,” said Craig Manahan, senior practice manager for RoundTower Technologies, Cincinnati, Ohio-based Nutanix partner. “He’s been the driving force, the face, and really the spirit behind Nutanix since it started. This is huge news for partners. I’m in shock.”

Pandey unveiled his plan to retire Thursday evening during Nutanix’s fourth fiscal quarter financial earnings with the company reporting $328 million in revenue, up 9 percent year over year. Additionally, Pandey announced his upcoming retirement the same time Nutanix unveiled a massive $750 million investment from Bain Capital Private Equity.

“Co-founding and leading Nutanix for the last 11 years has been the single most rewarding experience of my professional career,” said Pandey in a statement. “While I will miss being in the trenches with our team every day, working from home alongside my family over the last several months has been a fulfilling experience. I look forward to spending more time with our children and allowing myself the space and flexibility to read and write, and learn new domains, which simply hasn’t been possible as a full-time CEO.”

[Related: Dell Hires Cisco Canada President As New Global Channel Chief]

A CEO search committee of the Nutanix board of directors is underway to find a replacement for Pandey, while also hiring help of a leading global executive search firm. Dheeraj will remain chairman and CEO while a formal search is conducted. He will retire as CEO of Nutanix when a new leader is appointed by the board.

Partners said the new CEO must be as dedicated and hungry at driving innovation and growth as Pandey was.

“My hope is they keep the spirit of the company, as much as they can, the same. I’m sure there’s some things a new CEO will bring that are different than Dheeraj brings to the table, but the company culture and the sprit are really important for Nutanix as a company. They pretty much founded the hyperconverged market,” said RoundTower’s Manahan. “It’s sad to see him stepping away. Hopefully, they pick someone that can pick up that torch and carry it forward.”

Worth Davis, president of Computex Technology Solutions’ Solution Provider business, Houston, No. 182 on the 2020 CRN SP500, said he was sorry to hear about Pandey’s eventual exit from the company.

“Dheeraj did a great job competing in a tough market against VMware and Red Hat in the virtualization market,” Davis said. “Nutanix is one of our great partners. I am sure the board will find an incredible replacement for him.”

Pandey came to the U.S. from India in 1997 with $900 in his pocket, Pandey told CRN last year. In 2009, he founded Nutanix which quickly became an innovator and leader in the emerging hyperconverged infrastructure market at the time.

Over the years, Nutanix consistently grew annual revenues by double digits thanks to a slew of innovation and top-notch products. Over the past three years, Nutanix was able to successfully exit the hardware market and become a software-only company. Nutanix now has an annual software and subscription sales of well over $1.2 billion with annual billings of $1.6 billion, along with more than 6,000 employees.

Pandey’s pending departure is yet another tale of a founding father exiting in the midst of competitive pressures and treacherous market conditions, said Michael Goldstein, CEO of LAN Infotech, a Fort Lauderdale, Fla., solution provider.

“At some point no matter how good you are at pioneering a hot technology like hyperconverged infrastructure you need to get cash and capital to run the business,” said Goldstein. “This is a very difficult environment for anyone. Hyperconverged is an extremely competitive market. In the end Dheeraj did a great job building the company but the time has come for a new leader to take it to the next level.”

In 2016, CRN reported that Cisco offered to buy Nutanix for $4 billion, but the offer was declined. Goldstein pointed out that SimpliVity, once Nutanix’s chief competitor in the hyperconverged infrastructure market, was sold to Hewlett Packard Enterprise three years ago for $650 million in cash. “It’s tough for a company – even one as big as Nutanix- with $1.6 billion in sales- to compete against bigger companies,” he said. “I am sure Bain will look at restructuring the company and position it for a sale.”

Pandey’s departure does not change the robust Nutanix product line, said Davis. “It’s a solution that has great functionality, ease of use and price performance against competitors,” he said.

Partners said their Nutanix business has been booming over the last several years. “They’re a very good channel partner to work with. We’ve had a lot of success with them, especially over the past five years,” said RoundTower’s Manahan. “We’ve seen exciting things come out of Nutanix.”

Pandey said his company is “well positioned” for future growth thanks to its innovation engine.

“I would like to express my deepest gratitude to my wife and my fellow co-founders for giving me the courage to imagine and help create something out of nothing,” said Pandey. “I am confident there is no better time for me to make this transition to a new leader who can guide Nutanix through its next decade of growth and success. … With our strong fourth quarter financial results, 29 percent growth in year-over-year run-rate ACV, a delightful software stack, and our recent launch of Nutanix Clusters on AWS bare metal, Nutanix is well positioned for the future,” he said.”