Nutanix CEO sees options as VMware sells

Rajiv Ramaswami joined Nutanix from rival VMware and now is keenly observing the sale of his ex-employer.

Headshot of Rajiv Ramaswami, CEO at Nutanix

Like most of us, Nutanix CEO Rajiv Ramaswami is just getting used to international travel. He took the hotseat of the datacentre disruptor in December 2020 but, when we meet recently in central London, he tells me this is his first trip out here. A soft spoken and courteous man, he still has plenty to share and for me to catch up on, so we jump straight in…

First is the fairly recent news that Broadcom agreed to buy virtualisation behemoth VMware, Ramaswami’s former employer and now his competitor. Was this a surprise and might this open up new opportunities, especially given public statements and the template example of Symantec, where Broadcom doubled-down on its largest customers?

“I hadn’t necessarily anticipated [the sale],” he says, “but VMware is a great company with great products and a great customer base. I do think that over time there will be more customers looking at alternatives. When a company goes through an acquisition, customers ask ‘what does that mean for me?’ Broadcom has indicated it is going to be more focused on profitability. It’s a different model [to VMware’s previous direction].”

Ramaswami’s exit from VMware led to a legal spat but adds that he is optimistic that the pair can work together sensibly, given the crossover in their respective customer bases and need to integrate and interact.

Dealing with the Great Resignation

Another opportunity could be to recruit from VMware’s numbers at a time when many in the tech sector (and outside it) are weighing their career options. Nutanix recently cited issues with retaining sales staff as having a disruptive effect on its performance as some saw greener pastures among pre-IPO companies.

“Talent movement has increased across the industry,” Ramaswami notes. “It’s super-competitive. There’s been a massive increase in the number of software ‘unicorn’ companies [valued at $1bn-plus] and they have been aggressively hiring. I do think that the market is changing now as IPO plans are on hold though.”

Nutanix itself has a new-look senior team and Ramaswami says he has been focused on executives with experience in scaling companies of similar size. But like all Valley leaders he is also dependent on building an environment people find attractive to foster the next wave of leaders and execs.

“The most enduring thing is culture,” he says. “Of course, people want to grow and make good money, but they want to be with people they like. During Covid that was a little harder…”

Keeping it simple (and shortages)

Another area of focus since he took the job has been dealing with what was a bafflingly complex and headache-inducing long list of SKUs that challenged even seasoned Nutanix watchers. Customers can now more easily buy related products in themed groups under self-explanatory names such as Cloud Management. This has been quite well received, he says, and has made it easier for customers to try and buy portfolio suites.

But global hardware shortages recently put a spanner in the works, leading to a product availability crunch. “You buy a Netflix subscription but you still need a TV to see it,” he says. He also rejects my suggestion that the company’s shift to focus on software and ditch box-selling several years ago could have exacerbated the issue. In fact, it’s “probably the reverse”, given the many ingredient parts and complex multivendor value chains that make up modern servers, networks and other datacentre gear, Ramaswami claims.

Despite fears of recession he remains optimistic in outlook. (“We haven’t seen a change in demand yet. We’re not seeing ‘we’re going to hold off…’”) As an upside example he cites the Middle East, where new infrastructure is rapidly being built. A “big bet” opportunity lies in database-as-a-service offerings, thanks in part to the rise of microservices. “Every microservice will have a database so there are going to be more databases: perhaps small databases but more databases,” he predicts.

A further fillip could come from building in data governance and security to products. Nutanix gave a hint of this last year with its Data Lens cloud service that folds in ransomware protection and the CEO suggests we will see more automation of complex tasks such as ensuring appropriate data is stored in the right location to avoid sovereignty snafus.

Hybrid hopes

Hybrid working is of course changing the nature of IT and network traffic patterns and Ramaswami is an enthusiastic advocate of the model. Nutanix asks only that most staff only need attend offices four or five days per month.

“We encourage individual teams to meet at a cadence that works for them and we don’t see a reason to mandate that people be in the office all the time,” he says.” That in turn means the company can consolidate buildings and access new hiring opportunities or, as Ramaswami puts it, “We can go to where the talent is.”

M&A “blockbuster” activity is unlikely but “there are opportunities [to acquire] because there’s a lot [of companies] that will struggle to raise their next round of financing”. But a bigger target, seven years on from its IPO, is different. “We’re focused on organic growth and profitability,” he says.

And with that he is off into a car whisking him to another meeting… and a chance to catch up after a couple of years working virtually.