Bert quoted the Morgan Stanley analyst who said that Nutanix was the most innovative company she had seen in almost 20 years of experience
Dreamer, I’m just curious what you think about that because it sounds so weird to me. I don’t doubt that they are innovative, but…MDB, ZS, SHOP, etc…there are so many innovative companies, seemingly doing a lot more interesting things.
Saying anyone is the best is always subjective and I dislike absolute statements, but they seems to be more innovative than most I watch.
Think of HCI as the iPhone to Apple. Not meant to be a dig on Apple or start an Apple thread, but since their lack of innovation just brought down the whole market today, it seems a timely comparison. HCI could also be thought of as Blackberry’s email capabilities, which is the example the Nutanix CEO has used a couple times (I heard him say this specifically at a sales rally event in early August). What their CEO was saying was basically “blackberry was great, but they didn’t innovate, and they were disrupted, and we can’t allow ourselves to be disrupted in a similar fashion, no matter how great we think our HCI solution is.” That was his reasoning as he then began to rattle off all the new “tools in their sales toolkit” in the form of the new products that Nutanix has been rolling out for the past 12 months or so, such as Beam, Xi, and Frame was actually announced while I was at the event.
Amazon is probably the most diverse and innovative company I can think of offhand…they have their hands seemingly in everything. Most companies are hesitant to go outside their comfort zone, and for good reason. Sales teams can stall under the weight of too big a product portfolio, as they lose their ability to be really proficient at selling any one product. I think the key here is leverage and synergy. In Amazon’s case, they disrupted the book world via online sales and kindles, and then used that to build a mammoth ecommerce biz, and then realized they had huge DCs that could be leveraged for cloud computing (I am generalizing to make a point) and once they started crushing brick and mortar stores everywhere, they then opened/bought brick and mortar via Whole Foods. There is a flow to that, you can sense. Every thing they sell and do seems to have a natural transition to another product line. In much the same way, Nutanix (if you believe the CEO) basically came up with HCI as a way to sell their software…they weren’t trying to be in the hardware business, but needed a disruptive niche. Their HCI combines with their hypervisor to give folks fed up with high VMware hypervisor licensing fees an alternative. “hey…like using HCI to solve this particular IT problem, great! Try our hypervisor, too.” They build up a customer base of 10,000+, and then roll out new products that have a good flow from their core HCI offering. “Using HCI for your on-prem needs, but still looking to crack the code on how to best leverage Public Cloud and live in a Hybrid Cloud future world? Ok, we can help via Beam to analyze the best location for your workloads (on-prem or public cloud) and we can provide you with Xi for cloud-based Disaster Recovery, we can leverage Frame for cloud-based notebook/desktop management, and we can leverage Calm to help manage that multi-cloud world you now find yourself in.”
Other companies tend to innovate more vertically…NetApp is a storage company…they started to grow stale a bit but did a great job of reinventing themselves in last 1-2 years by adding an HCI solution (where did they get that idea, I wonder?) and becoming very cloud-friendly with Azure and AWS. But they didn’t get into notebook/desktop management or hypervisors nor are they nearly as broad or horizontal as Nutanix is trying to be.
This optionality or broad/horizontal innovation (whatever term you want to use) is something I like in Nutanix, because if they pull it off, they greatly increase their TAM. I tend to like companies that are executing and have largest TAM possible or at least the ability to increase their TAM.
I think ZS is in a good spot here. Being cloud-based, once they have a wide enough customer base they can add more and more features (I hope) over time that have good synergy with the security solutions their clients are already using. I think SHOP had these qualities…we see it in SQ a bit too.
AYX may be “only” about data analytics, but the good news there is that everyone produces data…I guess they could try to become an MDB (or vice versa) but you would be shocked to see AYX announce a new docusign-type feature, right? If Nutanix did that, you wouldn’t be nearly surprised, at that seems to be their DNA to broaden their scope.
On NPI board, Denny brought up the concept of Founder-led vs Pro-led companies…basically a dig at Apple since Jobs passed away and Tim Cook took over. I think there is a lot to that, and Founders remain the most invested and passionate and concerned about the future of their company, vs polishing their resume for the next gig. None of the big IT titans, outside of maybe Oracle seem to be founder-led anymore…Cisco, HPE, NetApp. I just realized Michael Dell is still around, and who is biggest competitor touted for Nutanix usually? VMware, which Dell bought via the EMC acquisition. Michael Dell is still rapidly trying to change things up and expand, probably because he has that Founder mentality. HPE and Cisco are certainly adapting and changing with the times, but due to their big size they just aren’t as innovative or nimble as Nutanix right now.
A bit of a ramble, but hope that adds some color.