Nutanix CEO Happy For ‘Friend’ Becoming VMware’s New CEO

‘Look, Raghu [Raghuram] has been a personal friend of mine long before I joined him at VMware,” says Nutanix CEO Rajiv Ramaswami (pictured) in an interview with CRN.

In 2020, Rajiv Ramaswami and Raghu Raghuram were friends and colleagues working together at VMware in top executive positions. Fast forward to this week: Raghuram is now officially the new CEO of VMware, while Ramaswami is the new CEO of software competitor Nutanix.

“Look, Raghu has been a personal friend of mine long before I joined him at VMware,” said Nutanix CEO Ramaswami in an interview with CRN. “So I’ve known him for more than 20-plus years at this point. He’s a friend. And over the past five years, I’ve worked very closely with him as a colleague.”

VMware and Nutanix have a very similar sales and customer focus, go-to-market strategy and vision to become the world’s market leader in hybrid and multi-cloud computing. Nutanix and VMware are the two dominant worldwide market-share leaders in hyperconverged infrastructure software. Nutanix has completely transformed itself into a Software-as-a-Service (SaaS) and subscription company, while VMware is on the path to also becoming a SaaS and subscription company. Both companies depend greatly on leveraging channel partners to boost sales and their global footprint. Over the past few years, both have also formed tight strategic partnerships with cloud providers including Amazon Web Services and Microsoft Azure.

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“That list of similarities between them, that could go on and on,” said one CTO of a large solution provider who has partnered with VMware and Nutanix for years and asked not to be named. “You could say Nutanix’s hope is to become a VMware-like company, just because VMware has been around a lot longer so it has a bigger portfolio, more customers, etc. … If you step back and think about what they’re both trying to do in the world of hybrid cloud, multi-cloud, digital transformation—whatever you want to call it— it’s like the start of this big battle for customer share between two new CEOs trying to make their mark. … For a channel partner, that’s good because it leads to more innovation when competition is so hot.”

Nutanix’s Ramaswami told CRN that although the two companies compete against each other, he is happy his personal friend and former colleague was selected to lead VMware.

“I’m truly delighted for him on a personal level in terms of him being the CEO for VMware. He’s been there for 17 years. He knows the company,” said Ramaswami.

However, Ramaswami said his vision for Nutanix, along with its more than 6,000 employees and 19,000 customers, is to grow as fast as possible and win more market share.

“I have a lot of respect for him,” Ramaswami said. “I also look forward to doing what we need to do here at Nutanix in doing the right thing for our customers to innovate and win in the market. That’s what I’m focused on.”

Ramaswami and Raghuram both worked in top executive positions at VMware for four years together from 2016 to late 2020. Ramaswami left VMware in December to become Nutanix CEO following the departure of Dheeraj Pandey, while Raghuram became VMware’s new CEO on June 1, replacing former CEO Pat Gelsinger, who left to head Intel.

Ramaswami was VMware’s global chief operating officer for products and cloud services during his four-year tenure at the company before leaving. When Ramaswami left, Raghuram took over VMware’s products and cloud services team while also continuing in his role as executive vice president at the time.

In an interview with CRN last month, VMware’s Raghuram said Nutanix only “overlaps with a tiny part” of VMware’s broader product portfolio.

“So we compete with them on HCI [hyperconverged infrastructure]. We are the market leader in HCI and we will continue to vigorously compete with them in the HCI market,” said Raghuram. “But you step back and say, ‘How are we accelerating our customers’ most important business initiatives?’ The most important business initiative for customers is to become a digital business, move to the cloud, secure their digital assets—and we do that in unparalleled fashion compared to everybody else.”

Nutanix and VMware reported their financial quarterly results last week with both company’s fiscal quarters ending April 30.

VMware generated $3 billion in revenue for its first fiscal quarter, representing an increase of 9 percent year over year. Nutanix generated $345 million in revenue, representing an increase of 8 percent year over year.

VMware reported net income of $425 million for its fiscal quarter, while Nutanix reported a net income loss of $123 million for its fiscal quarter. However, in a huge move to potentially flip Nutanix’s net income from red to black, Bain Capital recently agreed to inject $750 million in funding into Nutanix.

“In the core of where Nutanix started in the hyperconverged infrastructure market, Nutanix is essentially a 50 percent share player together with VMware and has really created that market, which we think is still underpenetrated and has the opportunity to grow for quite some time,” said David Humphrey, managing director and co-head of Bain Capital’s North American private equity business ,in an interview with CRN this year. “[Nutanix] solves a really valuable and important problem for its customers and we think Nutanix does so in a way that’s differential relative to VMware, who is of course a formidable competitor, but even relative to them.”