The elephant in the room is large, even for the species. It feels as if the very air has been sucked out of the space, leaving only enough left for a shocked, raw feeling and a queer, disjointed sense of things having changed. I’m in Vienna, Austria at the .NEXT conference held by the hot datacentre infrastructure supplier Nutanix but everybody is talking about the news of an hour or so earlier: at 70 years old, Donald John Trump is the President-elect of the United States of America.
Near-term at least, that news hasn’t in truth got a lot to do with the way companies process, store and relay information but it seems remiss not to at least ask for a reaction when I sit down for half an hour with the company’s CEO Dheeraj Pandey. He is after all an embodiment of the American Dream, an entrepreneur raised in India who has taken the Californian company he founded all the way from idea to stock market hit with a valuation of over $4bn. So, how does it feel?
“First of all, I’m a fatalist at the core,” he says with admirable calmness. “I believe things happen for a reason. In the moment we don’t know why it happened but … he’ll rule from the centre, he won’t rule from the right. I’m not concerned at all by the election process. Life must go on and business must still survive.”
It’s certainly to be hoped that sense will prevail, the world will keep on turning and the river keep rolling so, with a clunking change of gear, we talk shop...
About six weeks ago Pandey took his company to a long-mooted IPO that saw shares spike 131 percent on the day of issue. Even if things have since calmed down since this was the sort of debut to inspire other tech firms to take the plunge. Pandey had been talking up his company’s prospects of making a share offering for at least the near-on four years since we first met. It must have been an emotional moment when he was joined by a large group of colleagues and partners for the moment the NTNX ticker went live, I suggest.
“Even the IPO was less about an IPO than building an independent company and not worrying about the [datacentre] incumbents,” he says. “My eyes welled up a couple of times; I could see the exuberance of people. The reason why it was so poignant was because it was a great unifier for the company. It was quite contrarian: IPOs are relatively elitist events where 20 executives show up. [We wanted] that family feeling. It was an important checkpoint for the grassroots.”
Contrarian is a useful word when discussing Nutanix and Pandey is a pretty contrarian person. In a tech world more characterised by bluster he uses his words carefully and with elegance. He has a strong sense of narrative and a firm command of simile and metaphor. Nutanix’s success is based on its taking on the old guard of the immensely lucrative datacentre sector and providing a sleek alternative to the server, storage and networking giants, most of which are now on the back foot. On the way it has had to fight off the usual FUD from rivals and serial criticisms that it was too small, too narrowly focused and so on. But Pandey says Nutanix is just the latest in a long line of disruptors that built a better mousetrap and found another way to crack a nut.
“We’ve seen this movie in the past,” he says. “When Apple came out [with the iPhone] people were incredulous: how can this consumer item succeed in the enterprise?”
It’s not an easy path though. In Vienna, Nutanix lists a roll call of new features, functions and badges, from network virtualisation capabilities to Oracle certification to support for Cisco blade servers and Docker containers. It’s the sort of epic sweep that once led some to suggest the company was overreaching in its ambitions.
“When you’re building an operating system you have the curse of the platform,” he laments. “You have to do everything. We’re not acting like a typical ‘box’ IT company.”
One advantage of being a public company is that Pandey and company have the chance to make acquisitions that will help to fulfil that vision. On the eve of the IPO it bought two complementary companies in PernixData and Calm.io, and Pandey says there is no Not Invented Here syndrome:
“Money itself doesn’t buy you much, otherwise Yahoo would have been an awesome company [from its Alibaba stake]. A diverging gene pool is very helpful for staying power. You bring in two DNAs and build muscle memory.”
A keen student of tech business history he says he’s keen to avoid the “Icarus effect” of the likes of DEC, SGI and (aptly enough) Sun Microsystems – engineering companies that flew too close to the sun and saw their waxed wings melt. Pandey is currently fascinated by the notion of Founder’s Mentality – what to do to avoid the situation where growth creates complexity that in turn hinders innovation and growth. The challenge is to behave like a small company and cleave to the customer, he argues and Amazon and Google are useful templates, he believes.
Business risks? There are plenty. His rivals are some of the tech world’s biggest marques and partnering and other relationships with companies like Dell and VMware can make for a scene as fiendishly complex and political as the race to the White House.
“The risk is not on the outside,” he insists. “Mistakes will be from the inside. The biggest risk is attention to detail, or lack thereof.”
He says he has only met VMware CEO Pat Gelsinger once but notes that the former Intel executive tweeted congratulations to Nutanix on its float. “He has healthy respect for us I’m pretty sure,” Pandey says.
“With Michael [Dell] I have a pretty intimate and close relationship. We talk a lot and we talk about the elephant in the room [not Mr. Trump this time but the vagaries of Dell reselling Nutanix while owning VMware and EMC.]”
Besides, what other companies do is beyond his control and his plan with Nutanix is to build a company for the long run, one that goes beyond even achieving resilience to survive and prosper in the face of the inevitable rise of new companies and new thinking.
“I’m just more stoical,” Pandey says. “Entrepreneurship never ends and shocks create stronger systems.” He cites Nassim Nicholas Taleb’s book Antifragile: “[Strong companies] become better with shocks. It’s such a contrarian view of life but it’s true.”
Partnerships, despite their implicit challenges, could still work well for Nutanix and help the company go further, faster. Lenovo has been selling Nutanix for two quarters now, mostly focusing on the latter’s xpress SMB offering. There is “really good traction” in China and Europe is “looking quite good”.
Finally, I put to him the fact that some at the conference say that Nutanix should focus on selling software rather than appliance servers but Pandey says that customers prefer a “black box” with one throat to choke. And with that our time is up. The elephant is still there but, as Pandey says, life and business will go on.
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