As many have pointed out on the board, NTNX guidance and lead gen fiasco was dis-appointing.
The reason for disappointment stems from expectations. I have been impressed with their ability to roll out impressive array of products in short amount of time and real push to become “OS of the cloud”, at-least for now their journey is highly uncertain.
Big eye opening to me was Dreamer’s post about how HCI selling mechanism / cycle would be very different from selling many of the new products they have rolled out, including Xi.
I was trying to compare NTNX to SQ / SHOP to some extent thinking, NTNX will succeed with new products just like SQ / SHOP have been with many new / rapid introduction. Dreamer’s post clearly educated me on the difference of infrastructure sell vs application sell in an enterprise… and ofcourse, thinking again, one can see that SQ / SHOP are very focused on their customer segments and every new product / service they come out with, they really have some connection with existing successful product such that their sell becomes easier for them. NTNX new products direction is clearly not connected to HCI and therefore, sales challenges…
So, thats the reason for me to consider my thesis broken at-least in the short term… NTNX will likely come back, may be even strong, but that becomes speculative and I did not want to hold my 7% position (that became ~5% after earnings).
However, having seen the drop already, I didnt see need to rush to the exit and have been thinking about where to move the money to.
Here is what I did.
On Friday I sold NTNX out of my taxable account and after a few days thinking, I replaced that with MDB today. There is enough FUD and dialogue about MDB, and may on this board also reduced or exited recently. I think Amazon / Lyft were non-issues clearly identified by many… their Atlas pricing reduction on MSFT to me is a big positive… they are taking a page from very successful cloud infrastructure providers by offering database with metered pricing and showcasing reducing cost with higher usage AND with time… time will tell but to me it seems like a big game strategy and so I added a bit to MDB today.
And from my IRA account, I sold NTNX today and split the proceeds among OKTA, PS and ZS.
We saw ZS just delivered blow out quarter, OKTA has great network effect and PS is a new and still small position for me (this was 2nd little bite at PS in last month)… still watching and learning.