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Storage & Data Center Solutions

Nutanix Gains from Demand for Google-like Datacentres

Tech firm marketers like nothing more than a bit of pop sci-fi movie action so it’s no surprise that enterprise server/storage startup Nutanix is inviting customers, prospects and influencers to Star Trek Into the Darkness. However, the film’s name is entirely inappropriate for the company’s mission to deliver corporate datacentres into the light, delivering a platform that lets the ordinary, dull enterprise play by the same rules as cloud stars like Facebook, Google and Amazon.com.

From startups to Cisco, a tranche of companies are also attempting to reinvent the datacentre, of course, by delivering on the promise of convergence between compute and storage and banishing latency along the way. Nutanix and the latest players like Pure Storage, Nimble Storage and Tintri are also taking their cues from the B2C internet, mimicking approaches by the big search, e-commerce and social networks to offer very fast, highly virtualised and scalable environments based on commodity parts and at lower cost than giants in the enterprise server and storage space have offered.

When we meet at a lunch for press in London at the upscale Cinnamon Club restaurant, Indian-born CEO Dheeraj Pandey is not short on confidence when it comes to the San Jose-based company he founded three and a half years ago. He says he wants to “block and tackle” the big boys in the enterprise and “will never walk away on price” as he attempts to get a Size 10 boot in the doors of blue-chips, because 20 per cent of customers will represent 80 per cent of business revenue at mature rivals. He believes his company has the tools to “crack the Fortune 500 puzzle” and snipes at rivals that have a maximum market cap of $1bn or $2bn. Nutanix can go “a little bigger”, says Pandey, with a mixture of swagger and understatement.

The company already has $72m in funding and expects to add substantially to that treasure chest with a forthcoming Series D round that is likely to value the company at about $1bn. The meat behind the Silicon Valley bravado is a revenue stream growing about 80 per cent per quarter, after just 18 months selling in; Nutanix received over $20m in revenues for its most recent quarter. Cue more chutzpah from Pandey: “Nutanix is the fastest-growing network/storage firm in 10 years.”

Is Nutanix for real? Simon Robinson, an analyst at 451 Research, believes so.

“CIOs have previously been happy to accept the costs of integrating multiple IT components in order to have freedom of choice and avoid lock-in,” he says.

“What we're seeing now is the tide shifting: integrating components is now massively complex, time-consuming, expensive, and adds zero value to the business, and so IT is now at the point where it is now evaluating how to reduce the integration burden. Convergence is obviously the answer, but it's not a straight-forward choice; there are degrees of convergence, from 'soft', loosely-coupled reference architectures (for example, EMC VSPEX) to hard-wired appliances (for example, Oracle Exadata). The question is how much lock-in are you willing to accept for a given level of integration?

“Part of the answer is: 'What are the total benefits of integration - what else are you giving me?' This is where Nutanix comes in. It's not simply stitching existing components together to make 1 + 1 + 1 = 3; Nutanix has taken a ground-up approach that is optimised for virtual environments, offering things like scale-out, simplified installation and management, data tiering and space-saving efficiencies.”

Robinson says he is impressed by Nutanix’s concept and market traction but warns that sustaining that success will come under challenge “in the face of an onslaught from the giants who are now getting their acts together. But so far Nutanix is looking good.”

Andrew Feldman, VP of AMD's Server Business Unit, sees Nutanix as emblematic of a broader change.

"The changes in the datacentre impact all types of infrastructure including compute, networking and storage," he says.

"In this transformation servers play a larger and larger role. Software Defined Networking moves networking software to servers as opposed to in specialised switched and routers and leading examples are Big Switch Networks and Versa Networks. And key innovations in storage software convert servers with lots of disk into storage appliances. Nutanix for example  a leader in this space, is a server that runs with a file system like the one Google invented and the result is a storage appliance. Many of these innovations start in the mega datacentres of Google Facebook and others: think Hadoop, Casandra, GFS , SDN, to name a few and then companies drive these innovations back into the enterprise. The mega datacentres do not accept the status quo and with its expensive, high margin equipment from enterprise infrastructure companies, and seek to invent and then open-source technology to bypass this costly infrastructure. This is true for servers for networking and for storage." 

There’s no planned date for a Nutanix IPO. Pandey says that some rivals have taken their eyes off the ball in their obsession to float and says he doesn’t want to build a company based on “mercenaries and not missionaries”. Instead, the strategy is about taking advantage of low-cost industry-standard hardware to create a new architecture that is fast and effective, and not just for hyper-scale cloud service providers. And so far that strategy appears to be working very nicely.

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Martin Veitch

Martin Veitch is Contributing Editor for IDG Connect

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