Nutanix CEO On ‘Executing’ Better Vs. VMware And HPE’s Importance

‘VMware had vCloud Air and vSAN and Horizon View for over ten years, we just believe we’re executing better on product and services than most of the competition out there,’ says Pandey.

Dheeraj Pandey On HPE, VMware And 2020 Channel Strategy

Nutanix CEO Dheeraj Pandey believes his company and VMware will lead the multi-cloud world of the future on the software battlefront. However, Nutanix will be the “faster shark” in this huge market that he describes as a “bloody” and “red ocean.”

“VMware had vCloud Air and vSAN and Horizon View for over ten years, we just believe we’re executing better on product and services than most of the competition out there,” said Pandey in an interview with CRN. “It goes back to vision versus execution.”

The San Jose, Calif.-based hyperconvergence pioneer and hybrid cloud specialist recently reported a successful first fiscal quarter, which resulted in Nutanix’s stock surging 21 percent. Pandey talks to CRN about competition, Nutanix’s channel strategy in 2020 and just how important its new partnership with Hewlett Packard Enterprise is moving forward.

“The channel is extremely excited about this [HPE partnership] because we’re helping them go and sell a real competitive stack to VMware,” said Pandey. “A cloud can be anywhere. It’s not just off-premise. You can actually have a cloud on-premise as well. So HPE becomes a big part of our overall journey going forward.”

Where is Nutanix’s competitive pressure coming from right now in the market?

I would say three, four years ago the competitive pressure was from converged infrastructure and big incumbents in the space of storage and virtualization and networking. Now, it just happens to be two of us -- VMware and us -- and we are talking about how will we navigate this multi-cloud environment over the next five years and we think they have different approaches. I think hyperconvergence … is really driven by software now as opposed to hardware. It was a battle that we had to win over the last three, four years and the dust has finally settled, in that, it's really an operating system play. I would say that multi-product portfolio is probably the next big battleground for both companies in, ‘How to really do this well?’ I mean we're doing this organically with small teams that we come in together with and acquire. And we believe that, over the long haul, this is a much better approach than going in and acquiring revenue.

So we believe that there is obviously going to be competition, it's a very large market and large markets are red oceans. Red oceans have whales and red oceans are bloody. So we got to be the faster shark that knows how to really navigate change. Just in the last 18 months, this notion of running our software in the hyperscaler public cloud environment was something that we probably didn't conceive of three years ago. So as we go and really expand the surface area for software, we get into other battlegrounds that we hadn't thought about before.

How is Nutanix going to be the “faster shark” than VMware over the next few years?

It goes back to vision versus execution. If you go back in time, you realize how there was so much of a hype with converged infrastructure. Converged infrastructure was a real hack. It was a bandage of large technology players coming together and saying, ‘This is what convergence should mean.’ We kept arguing that it has to be an empty canvas of x86 servers, commodity networks and a true consumer-grade design. We have to do the exact same thing with this hyperconverged cloud world -- which is we call the multi-cloud world -- where it cannot just be about coalitions. It’s about really going and making it work in the customer environment, so taking our software and infusing it as if its hyperconverged in their virtual private clouds off the public cloud environments. There’s a lot of hype around multi-cloud. The dust will settle once the reality of the operating model comes out in the open. I believe that we are in the very early innings of hybrid cloud. VMware had vCloud Air and vSAN and Horizon View for over 10 years, we just believe we’re executing better on product and services than most of the competition out there.

How important is your new partnership with HPE?

HPE definitely has ramped-up faster than any other OEM of the past. More than half the DX – that’s the new joint product line – more than half of the DX customers were new to Nutanix. We have over 100 platinum HPE partners signed up for this new program called DX Spotlight. I think the channel is extremely excited about this because we’re helping them go and sell a real competitive stack to VMware. Having them actually go and talk hybrid cloud is a big part of this as well. So all-in-all, our customers have a true freedom of choice. They can take our software and put it on HPE and HPE’s [pay-per-use hybrid cloud offering] GreenLake is another example of freedom of choice. So a cloud can be anywhere. It’s not just off-premise. You can actually have a cloud on-premise as well. So HPE becomes a big part of our overall journey going forward.

You say HPE has “ramped-up faster than any other OEM” in the past. Where does the Nutanix-Dell Technologies relationship stand right now?

It’s remained consistent. People sort of think of this as a zero-sum game, but it’s not really been a zero-sum game for us. One of the reasons for our success in the last several years is really having this infinite mindset, which is a growth mindset – ‘Can we make one-plus-one equal three?’ That’s what we’ve done for both HPE and Dell. Even though Dell might think it’s about VMware versus Nutanix, our customers really want to make both products work, sometimes on top of each other. I talk about this whole platform versus app metaphor where: many of times we’re on the platform with the app running on top of VMware. In the public cloud, we’ll be an app running on top of AWS the platform. And at other times, we are the platform and the app, and we have our own virtualization software running there. All-in-all, with this kind of infinite mindset, we’ve been able to do the right things for our customers.

What should your channel partners look forward to in 2020?

At the core of our vision, we have made computing invisible but with that, we need to make our partners visible. That’s really important thing to differentiate. So make computing invisible but make partners visible. What does that really mean? Making them visible is all about taking the trusted relationships they’ve built with their customers and to make them profitable as well. At the core of profitable for partners is not just front-end margins, but also back-end rebates and services. The big piece is around services. Over the last 10 years when we only had one core product, they thought it was too simple to make money off services. But now that we have a multi-cloud portfolio, how do we enable our partners to build services around multi-product portfolio so that we can virtualize and simplify and integrate the customers multi-cloud experience? It will be a big part of our journey over the next three to five years with our channel partners.

Why did Nutanix have such a successful first fiscal quarter?

It’s about people and process. We’ve had some great traction in the Americas. We just had the largest quarter in the Americas, so a record quarter in Americas. Our process being, how do we really work with this with our channel partners and our global system integrator partners as they’re also beginning to really wrap their arms around subscription? Finally, it’s the fact that we’ve created a new baseline. Because sometimes when you make these transformational transitions you’ve got to really create and establish a new baseline and that’s what we did over the course of the last nine to 12 months. A big part of our success is also our large deals. Large enterprises are buying quite a bit from us. This was our second-best quarter in terms of large deals -- $1 million dollar deals – we had 66 of the this quarter and 14 of these customers also spent at least $1 million in the prior quarter. So a lot of good repeat business from our enterprise customers. What they really value is our reliability. When I say reliability, I mean reliable products, reliable customer support and reliable customer success. So we’re getting paid for building an honest company. All-in-all, our multi-cloud portfolio is also resonating very well. … As we understand things better now, the simplified messaging of solutions is helping our channel partners and our global system integrators.

With your stock resurging, what is your message to Nutanix naysayers?

Theodore Roosevelt has one of my favorite quotes. ‘It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.’

It says a lot about how we think about company building and what we think about naysayers. … I want to thank all our channel partners and global SI partners for really being on this journey with us as we’ve transformed ourselves going from hardware to software, and now from software to subscription. There’s a lot of hard work ahead, we need to do an even better job to bring delight to our customers through this multi-product portfolio.