More so the issue w Dell came back to hurt them. Dell began aggressively pushing VMware and no longer pushing Nutanix. Long considered a risk, but most figured over blown. Well, like w Nvidia crypto currency, it was not overblown. Nutanix’s issues began as Dell became aggressive for VMware.
I think this may be a big part of what we have seen happen with Nutanix. I’d actually welcome it from a long term perspective and here is why.
My assumption relies on the fact Nutanix provides a far better value than VMW/Dell. So first off, if that is not correct, the rest to follow fails. Nutanix is not a start up looking to break into the space. They’ve broken in. If Nutanix were just a burgeoning enterprise in the space, my view would be completely different. They are not.
We have seen it repeatedly in the companies we invest in - disrupting the incumbent. In this instance, the incumbent may have made moves to make it more difficult for Nutanix. Good for them. I’d do the same if I ran VMW. I understand the best product doesn’t always win and the market decides who to go with. However, I’m not sure that principle applies here. Nutanix has too much of the market currently and some optionality to boot. The valuation is low though rising recently. It is one which I will also continue to hold.
I reserve the right to change my mind at any moment, but those are my feelings now.
A.J.