CEO Dheeraj Pandey: VMware Is 'Worried About Nutanix'

Pandey On VMware, Innovation And Channel Changes In 2019

The innovation engine is roaring loudly at hyper-converged pioneer Nutanix which is getting VMware worried, according to Nutanix CEO and co-founder Dheeraj Pandey.

"VMware's worried about Nutanix more than they're worried about any other company," said Pandey, in an interview with CRN. "They're obsessed with competition, while we are obsessed with customers."

Pandey was responding to VMware's criticism that his company's innovation strategy was a "copycat" of VMware following Nutanix's acquisition of cloud-based desktop and application delivery specialist Frame this year. Last week, San Jose, Calif.-based Nutanix reported fiscal first quarter revenue earnings of $313 million, up 14 percent year over year, as well as an increase in its customer base to now 11,500 clients. Pandey spoke to CRN about competition with VMware, new products and partner programs ahead around Xi Leap, Xi Frame and Nutanix Files.

What are your thoughts on VMware calling Nutanix a copycat?

We don't really respond to things of that nature, but all I can tell you is that VMware is worried. They're worried about Nutanix. VMware's worried about Nutanix more than they're worried about any other company. They're obsessed with competition, while we are obsessed with customers. I've said this before, but they are probably focusing a lot of their energy trying to beat Nutanix, while we are focusing a lot of our energy to really earn the love that customers actually provide us. In that strategy, I think you know who will win in the long term itself.

What is Nutanix's differentiation from VMware?

A lot of what our architecture is, by the way, is very different from VMware. It might look similar on paper, but in reality, a lot of VMware's core base is 15-years or 10-years old. It was probably built for the era of Microsoft desktops and Microsoft servers and Microsoft-based virtualization. The world of cloud is very different. The world of commodity servers and software-defined infrastructure has changed the game on VMware in the last five years and that's because the market has moved away from proprietary hardware, three-tier architecture, storage boxes and filers, and fiber channels and things of that nature. We've completely changed the turf for VMware and I think they are basically trying to respond in emotional ways that actually don't really relate to what the strength of our two companies are.

Talk about the competition against VMware?

You look at software-defined infrastructure and we see VMware, but we don't see enough of VMware. In about 70 percent of the [proof of concepts] transactions, we're not seeing VMware. And we are going after very high-end workloads. And the other accounts where we do see VMware, I think we're going for head-to-head fights. We really want to go after POCs with VMware. We’ve built some highly automated testing tools and we really believe that customers are looking for the same high quality that they were expecting from these three-tier hardware deployments to come from a software-defined infrastructure. … We will support mix mode customers where the on-premise that they're running is VMware and the off-premise could be [Nutanix] AHV [virtualization]. That's what customers really like about us, is that we don't shove AHV down their throat.

You just launched Xi Cloud Services. What's one new opportunity a channel partner should now go after?

For many of these partners who are infrastructure partners, we'd like for them to start thinking about disaster recovery as a pure service. We made DR practically invisible where you don’t need to have a box for backup and recovery because it sits in the cloud. It's the first step in the direction of hybrid cloud because now you can really use software to automate migration from on-premise to off-premise. So I really want the channel to start thinking about disaster recovery as-a-service, which is something extremely natural for them and extremely adjacent to them. They can really relate to it because they've always gone and inserted backup products, disaster recovery products and migration tools.

What other new opportunities should Nutanix partners be attacking in 2019?

We would love for them to start thinking about desktop in the cloud and how Frame can go and deliver value both off-premise and on-premise. We're working on Frame to deliver desktops on-premise as well. Nutanix Files [software-defined scale-out file storage] is another big one. How do you think about software-defined infrastructure where files is not a proprietary hardware, like the way people have bought filers in the past, with a scale-out grid that happens from pure software on the same grid that's running your other applications. So Files becomes an application. There's a lot of migration from hardware to pure software and going from on-premise to off-premise because Files over the course of next 12-18 months will also run off-premise. The same catalog can be delivered on-premise and off-premise.

We also have the new Xi IoT. That IoT is for a set of partners that actually do specialization and implementation work around artificial intelligence and machine learning. The IoT use case that we've gone after is machine vision at the edge. Basically one of the killer apps of IoT is: what are humans use to doing visionally as inspectors [and how] can machines do that. That's the piece that we are really focusing hard on. That's going to deliver a lot of computer vision/machine vision and algorisms at the edge that really helps with an enterprise and industry transformation.

What should partners expect in 2019 on the partner program front? Will Nutanix launch anything new?

A company that is fast evolving also needs to have fast evolution of enablement. You'll see a lot of enablement in the channel around Nutanix Core, Nutanix Essentials and Nutanix Enterprise. As these new products need to generate demand, we will be introducing new partner programs around Xi Leap, Xi Frame and Nutanix Files. You'll see us talk about Nutanix Era, which is our database product. There's four or five of these products that we'll introduce some new incentives for the channel that partners should look out for.

The journey in this is around simplify, simplify, simplify. It takes energy to simplify – not just the products and the journey of the customer -- but also the journey of the channel seller and channel system engineer. We're thinking hard about simplifying very important things like deal registration and pricing and quoting. We've put a lot of effort thinking hard about the day in the life of a channel sales person and the day in the life of a channel SE – how do you enable them and get out of the way, and how to use business process automation to reduce friction in transitions. Those are the kind of things that will bring us dollars and really make us delightful to our channel partners. It's easier said than done. We've come a long way in that journey, but we have to go and simplify even more the life of a channel rep.

As a longtime leader in hyper-converged infrastructure, how do you keep the innovation engine roaring in 2019 and beyond?

One of the things we do a good job of is balancing ambition with attention to detail. As a paradox, to be ambitious and to have an attention of detail at the same time is quoting Andrew Grove in the book, 'Only the Paranoid Survive.’ We are a very paranoid company. We really understand what it means to innovate because innovation at the core is about paranoia and disruption of the future. Just like how we disrupted companies five years ago, we'll get disrupted if we fail to innovate. At the same time, you have to bring it all together through the appropriate customer experience and customer service and thinking hard about net promoter scores and things of that nature. So how do you balance this paranoia with this ambition -- that's at the core of this company. If we do a good job of this over the coming years, we'll continue to be innovative and at the same time we'll be a company that listens to its channel partners and customers.