It’s up 3-4 days in a row now. Is the market starting to realize how undervalued NTNX is?
I think you will find on the other side of this a rumor that NTNX will be acquired.
Tinker
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I think you will find on the other side of this a rumor that NTNX will be acquired.
Tinker,
Have you seen a rumor or are you speculating that there might be a rumor?
Chris
I am speculating because I have seen this before. Does not mean there is an actual acquisition, but shares will rise like this on the rumor. I have not seen any large revisions of numbers or the like. It is perhaps something we convinced some hedge fund to buy into (and that is not that far fetched, believe me, they do read forums such as this). But multiple days in a row of high volume share price increases almost always points to someone thinking an acquisition is in the works (they are not always correct though).
I have no personal knowledge of it, it is simply inference from past experience.
Tinker
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I have seen a couple posts on stocktwits talking about takeover rumor by ORCL or other but no article backing it up.
Nutanix is worth more acquired by the correct company. How profitable would Nutanix be if it already had in place a large sales force that is already selling other software or storage to the same customers and large installed base?
Quite a bit more as many of the sales costs are sunk costs anyways.
Not something lost on people I don’t think.
Tinker
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Nutanix is worth more acquired by the correct company. How profitable would Nutanix be if it already had in place a large sales force that is already selling other software or storage to the same customers and large installed base?
So adding NTNX should be highly accretive to such a company that also has a complementary product/services line. And who wouldn’t want to add something with a Net Promoter Score of 90…this would Lilly add sales synergies to boot.
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Have you seen a rumor or are you speculating that there might be a rumor?
HPE HP Enterprise purchased NTNX rival SimpliVity sometime back. At that time NTNX was trading around $30 and the expectation is any takeout price would be at least $30.
But if you look at the multiples HPE paid, I doubt NTNX can get that kind of price. There are only 2 pureplay hardware vendors left. HPE has Simplivity and Dell is still digesting EMC and cannot take on anymore debt.
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Oracle has a strong engineered system offering and their entire focus is on cloud. NTNX is not strategically aligned with Oracle’s roadmap and gaols.
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Nutanix is worth more acquired by the correct company
And who will that be?
<<<And who will that be?>>>
Any company with a strong sales force already in place, large established customer base with many fortune 2000 companies, and that wants to be in on the hyper scale technology trend. The latest rumor I heard is that Cisco would almost certainly be acquiring Network Appliance to fill its product gap.
As passive investors we do not know intimately the value that Nutanix brings to a data center vs. how the data center users perceive things. Nutanix clearly will be an appliance company for years to come, even if it pushes software. Thus, we know data centers want their hardware, with software as part of the package, and not the other way around.
But at the same time we also know that once they choose hardware, they do care about what software goes on it.
Dell would be the best option it would seem, but yes, they have to digest their current acquisition, and there may be quite the issue supporting two competing products and road maps, although it appears the sales force is not having a problem selling both products (VMWare and Nutanix).
Cisco, who is the acquisition king, I think would greatly benefit from improving their software offering.
But what we don’t know, if HOW MONETIZABLE is Nutanix software, when so much of the industry seems to want to focus on software/hardware solutions and not just software?
We really do not know. Nutanix will not tell us what they get from OEMs for pure software sales.
And frankly, it seems odd to me that Nutanix is talking about foregoing hardware sales if their gross margins fall too low, and instead find some software to sell. Would it not be better, lower gross margins or not, to sell as much software and hardware/software sales as they could and not forego sales just to dress up the gross margins?
There are questions. I don’t know all the answers to these questions. But clearly in the right hands, with a largely sunk cost sales force, Nutanix would be more valuable. It is whether or not there are other companies out there that see Nutanix as the route to follow for their future or not.
Tinker
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There have been talks of NTNX getting bought out for past couple years. I doubt this is driving the recent stock price which was more based on technicals as I posted at the NPI.
Sure hope there is no buy-out…it is really a two horse race between NTNX and VMWare…and NTNX is best to remain Switzerland.
As they have rightly stated, their Market is large and growing and if the independent market projections are correct of around $12 Billion TAM by 2022, this company, with only $1 Billion revenue run rate at this time, should still do very well.
They are young, they are hungry, they are well respected, they are growing very fast…let’s not spoil it with a buy-out.
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As passive investors we do not know intimately the value that Nutanix brings to a data center
I guess I understand NTNX value prop, at least I want to believe that. 
The pureplay HW vendors like HPE and DELL are not going to buy them for reasons stated and CISCO is not interested because their appliance strategy is not focused on general computing.
AWS, Azure, Oracle all have established cloud presence and they are not going to buy NTNX and restructure or retrofit their cloud.
There is an existing partnership with Google and beyond GOOGL I don’t see anyone interested in NTNX. Even GOOGL, after Motorola purchase, I don’t think they want to do anything with HW and NTNX has to become VMWare of converged/ appliance systems. The value may be there but if it is not a fit they are not going to buy it.
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The pureplay HW vendors like HPE and DELL are not going to buy them for reasons stated and CISCO is not interested because their appliance strategy is not focused on general computing.
AWS, Azure, Oracle all have established cloud presence and they are not going to buy NTNX and restructure or retrofit their cloud.
King:
I sure you know that NTNX already has agreements with AWS, MSFT and GOOG…these companies are not competing…they want NTNX to help them get customers to use their cloud.
The potential suitors would be CSCO, DELL, NTAP and perhaps some more obscure players:
https://www.theregister.co.uk/2017/02/17/hyperconverged_mark…
But all this talk about buy-out is way way premature and I would hope that this would not be a reason to be invested in this or any stock.
I sure you know that NTNX already has agreements with AWS, MSFT and GOOG
Yes. But there is nothing much going on with AWS and Azure. It seems NTNX is only working actively with Google. I could be wrong but that’s my understanding.
I agree CSCO can still be interested but doubt DELL has any interest, they have VMware and a huge debt load to service and not a publicly listed equity to issue. NTAP will not be going get into hardware market and most likely will be bought out by HPE if they can agree on a price.
One potential player, I have not mentioned is Lenovo, but will Trump administration allow a Chinese company to buy is a question need to be answered.
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