Nutanix amps the cloud data center noise levels with PernixData and Calm.io acquisitions.

SUMMARY:

Nutanix carefully timed announcement of acquisitions ramps up the company’s software stack, making it look more like a mature full stack cloud infrastructure player. But are these acquisitions strategic or acqui-hires? Kurt Marko digs in.

Dheeraj Pandey - nutting
Dheeraj Pandey, CEO Nutanix

If it wasn’t already clear, Nutanix is signaling that it will be a formidable competitor in the battle for upgrade dollars as enterprises retool IT and build internal cloud platforms. By announcing its widely telegraphed proposed acquisition of PernixData, a storage acceleration specialist, and Calm.io, a startup building automated application delivery software, Nutanix is expanding on multiple fronts.

With plenty of cash via a recent $75 million loan from Goldman Sachs, a healthy unicorn status and a likely IPO road show starting next month, Nutanix is looking like a company focused on building a technology war chest while attempting to accelerate growth.

As I discussed after the company’s .NEXT event in June, Nutanix intends “to become the premier platform for enterprise infrastructure,” backing up the mission by ouling a host of new features that evolve its core scale-out storage platform into a general-purpose, distributed host for applications. However there’s only so much a company with a couple thousand employees can do; it must prioritize.

So far, the focus has been on the hyperconverged systems and software stack that Nutanix arguably pioneered. More recently, the company has moved up the infrastructure software stack by offering its own hypervisor, support for bare metal applications and other cloud platforms like Microsoft and OpenStack, more management and intelligent VM scheduling and placement.

However the company has bigger dreams of bringing AWS-like features and usability to private enterprise data centers. Like others with tech industry grand ambitions, Nutanix looked outside for key technology. Acquiring Pernix Data and Calm.io, Nutanix bolsters its platform across several dimensions including improved storage performance, storage capacity planning, multi-cloud workload migration and automated application deployment.

Nutanix is weaning itself from its dependence on VMware. That journey started when Nutanix eliminated the requirement to use VMware’s market-leading, but expensive ESXi hypervisor as the virtualization engine for its hyperconverged platform. Last year’s release of the KVM-based Acropolis hypervisor, which is now used by more than 15% of Nutanix customers, was the vehicle by which that dependency was broken. The next phase entails adding management features, such as automated application provisioning and workload migration, along with improved performance for both virtualized and bare metal applications. Today’s acquisitions target both areas: storage performance, with server-side caching technology from Pernix Data, and workload management and application provisioning via Calm.io.

Pernix Data has two main products: one designed to accelerate storage performance (FVP) using server-side flash and RAM caching, the other to analyze storage performance across a cluster of VMs, servers and storage arrays (Architect) to find performance bottlenecks. Both technologies are useful to Nutanix. Intelligent caching on each of its hyperconverged nodes  can significantly improve performance, while detailed analysis of storage performance can improve workload placement and ensure that high IOPs workloads aren’t running on the same nodes.

With Calm.io, a small and largely unknown startup building DevOps automation software, Nutanix gains application orchestration technology for its App Mobility Fabric (AMF) designed to enable cross-cloud application deployments.

This is a crowded space. There are a multitude of automation and optimization engines for multi-cloud infrastructure including  ElasticBox (recently acquired by CenturyLink), Cirba, Apcera, Puppet, Docker, TurboNomics (aka VMTurbo); along with products from old line companies like IBM, CA and VMware itself.

While the relative merits of Calm.io are unclear, it fills an important gap in the Nutanix portfolio. In order to become a full-line cloud management platform, Nutanix needs to expand beyond infrastructure management to applications. With Calm.io, it appears to gain the technology to do intelligent workload placement and resource optimization for complex, multi-tier applications.

My take

The timing of Nutanix’s announcement is notable. Coming on the opening morning of VMworld, it is obviously designed to steal some thunder from VMware and create buzz among the thousands of enterprise customers at the show.

However, the announcement is long on vision and short on substance. At a press conference, Nutanix CEO Dheeraj Pandey stressed the cultural fit with each acquired company possessing “visionary leaders with a ‘Founder’s Mentality'” not afraid of ambitious dreams, however fundamental financial details like the respective purchase prices and terms were not disclosed, although some sleuthing into the Nutanix S-1 hints that the Pernix Data deal probably came in at about $10M.

It’s unclear the degree to which Nutanix can (or intends to) exploit each company’s existing products versus acqui-hirng talent useful to future strategies. I believe it’s a mix.

Pernix Data provides technology that is immediately useful to accelerating the performance of distributed storage, however its core caching technology will be increasingly valuable as faster storage tiers based on Intel-Micron 3DXpoint become available. Calm.io looks more like a talent acquisition whose technology will be used to turn Nutanix’s management software into a DevOps-friendly application configuration and deployment system tailored for its scale-out, hyperconverged systems.

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