Nutanix Takes Aim at VMware, Gen AI at Next Conference

NUTANIX NEXT — At its Nutanix Next user conference in Barcelona this week, Nutanix will move to strengthen its position as a VMware alternative and an innovator in generative artificial intelligence (AI).

Nutanix and VMware’s vSAN are the major hyperconverged infrastructure (HCI) platforms that combine servers, storage and virtualization. Nutanix works with VMware’s virtualization stack, but also includes a free AHV hypervisor that can replace VMware. Nutanix uses this technology to tempt VMware customers and partners who are unhappy with Broadcom’s stewardship of the virtualization giant to switch.

“Nutanix is very aggressively going after that VMware market,” said Steve McDowell, founder and chief analyst at NAND Research. “The challenge is, every VMware customer by and large is locked into three- and five-year licensing agreements. There is not going to be a rush to the door. It’s going to roll out over time as renewals come up.”

NAND Research's Steve McDowell

Dave Gwyn, Nutanix SVP of worldwide channels and customer success, agrees it will take time to convert a large number of VMware customers.

“Customers are asking their partners, ‘What should I do?’ And partners are looking at Nutanix to answer that question,” he said. “We’re seeing a shift there. But this isn’t an overnight thing.”

Thirty-five percent of Nutanix customers use VMware virtualization instead of, or along with, AHV. The Nutanix platform allows customers to migrate for free from VMware hypervisors to AHV. Gwyn said that gives Nutanix a good chance to pick up new customers and also increase revenue among current Nutanix customers running VMware.

“There’s been enough uncertainty in the market that I think a lot of partners had to think about their future and assess what their prior business has been with VMware and how safe is,” Gwyn said. “That's a question that partners ask themselves about any vendor that they're working with.

Nutanix's Dave Gwyn

“We've had partners reaching out to us — partners who have been selling both are suddenly showing signs of life," Gwyn said. "They're not necessarily new [Nutanix] partners but they're more active. We’re also seeing more interest and meetings from partners with whom we've been doing a lot of business over the years."

Thomas Cornely, Nutanix SVP of product management, said Broadcom’s track record with previous acquisitions worries VMware customers.

“You could see this coming a year-and-a-half ago,” he said. “Enterprises that have experience with the whole [Broadcom] CA and Symantec acquisitions, thought this could go down the same path. They wanted to have a Plan B. People know what they’re dealing with.”

Nutanix Next Will Shine Light on GPT-in-a-Box

Nutanix also is focusing on generative AI. It launched a gen AI-ready GPT-in-a-Box system last August. The AI bundle includes the Nutanix Cloud Infrastructure platform, Nutanix File Storage and Object Storage, AHV, Nvidia GPUs, and tools to run machine learning with Kubernetes.

Expect to see that product get an update at Nutanix NEXT. Cornerly said GPT-in-a-Box has gained a lot of interest but has fewer than 100 customers.

"The pipeline is going very fast, so there is something there for sure,” he said. “It’s early days, but I think the vision of what we’re doing has been quite well received.”

Gwyn said AI is the second “inflection point” for Nutanix now.

“Let’s say the Broadcom M&A never happened. We would still have AI. And AI is crazy in and of itself,” he said. “Every CIO out there is assessing what they need to be doing with AI, and being asked by their CEO and the board, ‘What are we doing to leverage AI?’ So that's another thing that's having a big influence with our channel. Our channel partners need proper expertise in AI and platforms that allow for their customers to build incrementally.”

NAND Research’s McDowell said Nutanix also needs to push deeper into Kubernetes and containers to challenge VMware and become an AI player.

“There’s going to be a blend of traditional workloads and cloud native workloads,” McDowell said. “Nobody's going to retrofit existing systems, so anything new will be natively container driven. And all the AI stuff needs to be container driven and work with Nvidia. They have to support Kubernetes. I don’t think they look at Kubernetes as the only answer, but that you can run your Kubernetes workloads on the Nutanix management plane.”

Nutanix is coming off a strong quarter. Its last earnings report in February included $565 million in revenue – up 16.2% from last year and $15 million above financial analysts’ expectations. Nutanix also beat expectations with a forecast of between $510 million and $520 million for the quarter that ended April 30 (results have not been announced), and guidance of $2.12 billion and $2.15 billion for the full fiscal year.

 “All doors are open,” Cornely said. “But we still have to go win the customers. We have to show how we can help customers and make it more cost effective. At the end of the day, we still have to go show our value to the customers.”