Nutanix has announced that it has closed its $101m series D funding that was co-led by Riverwood Capital and SAP Ventures. The company has now raised a total of $172.2m in four rounds of funding and will use the new financing to accelerate its global expansion, enhance its service delivery capabilities and grow its sales, marketing and support teams.
CBR spoke to Dheeraj Pandey, CEO of Nutanix and its VP of marketing, Howard Ting, about the company’s latest funding and the future of data centre innovation.
So what will the new funding mean for the business?
Howard Ting: There are three big areas of additional investment with this funding. The first area is building more products and developing additional technology and solutions that our customers want. There are a lot of big ideas that we have about the hybrid cloud, even delivering more analytics capabilities so we could help our customers run even leaner and meaner in their data centres. The second area of investment is customer acquisition. We want to have a presence in all major economies and countries around the world. We want to sign up channel partners and distributers; we want to aggressively grow our field teams. The third area of investment is ensuring that our customers are successful with Nutanix, so that includes building our support organisation, building out our service capabilities so we can help customers deploy more quickly, and architect our environments properly. So those are our three big investments: more R&D, more field teams to accelerate customer acquisition and more investment in services to help our customers be successful.
Nutanix has experienced a massive growth in a short amount of time. How was that achieved?
Howard Ting: There are two main reasons why we’ve grown so fast. One is there has been pent up demand, there is pain with enterprise customers around their data centre infrastructure. It’s either not performing, or its too expensive or complex, so there’s demand. We came into the market environment and timing when there was demand for a solution like ours. The second part of the equation is that we built a good product, and a highly differentiated one. There’s a lot of noise in the market, but what differentiates Nutanix is that we directly address all that pain that customers are feeling and we do it in the best package. We’ve built, I think, the best product that has enabled us to grow very fast.
Dheeraj Pandey: If you take a step back, there was an article that came 4 or 5 weeks ago about the Unicorn Club, that talked about how only 0.07% of companies ever funded in the valley have made it to the billion dollar club. On average it took 7 years to get there. We’ve done that in 4 years.
Philosophically, there are two things that we’ve done differently than many others. One of them is what I call attention to detail. Saying is one thing and doing is another. Talk is cheap. Many vendors will say that ‘we also have a converged infrastructure’ but to be able to do it in a way that is seamless and provides a good end user experience is a very hard problem.
The other piece that we believe we’ve done very differently is transparency. As a company we’ve been extremely transparent about who we are, how we do things, what our architecture is like. Even the smallest details about how we move and manage data, all that stuff has been blogged about numerous times by bloggers and industry analysts. That has created an unprecedented advocacy within the channel and end users. A lot of that transparency has resulted in creating massive champions within the field, which has led to repeat sales and word of mouth when people talk about it on social media.
Can you tell me a bit about the appeal of web scale data centres?
Dheeraj Pandey: I’ve been thinking about this and perhaps I’ll blog about this soon. A very good way of putting it is: web scale infrastructure at any scale. It’s a very interesting statement because even in a remote office environment, where you only have a four machine data centre, web scale is important. The virtues of web scale include an elastic fabric, you can pay as you grow. You can start small, maybe three machines, then add a fourth then a fifth, but nothing changes because everything is seamless and it’s online. So that idea of elastic, fractional consumption of infrastructure is at the heart of web scale. It doesn’t have to be at the scale of 5,000 machines, it could be at five.
How does Nutanix approach data centre security, both physical and virtual security?
Dheeraj Pandey: It’s around the notion of identity, do you know who is doing what? Encryption is a big part of the overall story. Security is a big part of our overall push because more than 30% of our revenue is federal government and governments around the world, and they are very paranoid about data centre infrastructure security.
There are a lot of challenges around data centres, including skills shortages in prospective employees. What challenges are Nutanix facing?
Dheeraj Pandey: The big one we’re trying to solve is how do you really bring the notion of convergence to the masses. I think the world is only beginning to put it’s arms around the idea of convergence. We try and consolidate and homogenise IT environments, teams and organisations. That is not an easy ask for people to come together. It does have efficiencies so we do know that it’s the right thing to do.
What do you predict will be next in terms of innovation for data centres?
Dheeraj Pandey: I think the idea of a hybrid cloud is extremely relevant in the next 2-3 years. Public cloud is here to stay, the idea of on-demand consumption of infrastructure, using APIs which doesn’t involve a human to rent out a virtual machine in the cloud for an hour or two. I think that whole concept of elastic consumption of infrastructure is just as relevant in the public cloud.
These two clouds have to come to co-exist and live happily. There’s going to be a lot of innovation that will be triggered by marrying the two environments and moving data around, automating the whole orchestration piece. I think the idea of hybrid is very important. One of the other paradigm shifts that is happening is around flash. flash really belongs in the server, the whole idea of convergence of flash in the server will take a more concrete shape in the coming three years.