Nutanix strategy pitches itself as the preferred enterprise cloud infrastructure platform

For over a year, Nutanix has made clear that it intends to be the preferred provider of enterprise cloud infrastructure, seizing an opening against the big name incumbents as organizations retool for an era of cloud services and containerized applications. As we discussed last year, Nutanix used its annual customer conference to make a series of strategic and product announcements, which we detailed here, that significantly expanded its scope and relevance. Hyperconverged storage was act one, while full stack cloud infrastructure is the sequel. As I put it then,

Nutanix is evolving its product into what it hopes will become the premier hardware and management infrastructure for all enterprise applications, whether next-generation designs using cloud services, containers and micro-VMs or legacy software needing a traditional server, OS and storage.

One of the questions I posed as critical to successfully executing this strategy was "how effectively does Nutanix fill the integration and support gaps between its infrastructure platform and higher level IaaS/PaaS software like Azure Stack, OpenStack, Cloud Foundry and others?" At this year's edition of the Nutanix .NEXT confab, the company showed meaningful progress towards addressing those concerns.

Enabling cloud diversity

Nutanix execs aren't ignorant of the surveys, market estimates and financial filings that document the explosive growth of public cloud services, which as Gartner's latest IaaS magic quadrant illustrates, has come down to a three-horse race, with AWS and Azure vying for supremacy and Google Cloud fast making up ground.

However, the same market intelligence shows that few organizations are willing or even able to go all-in on public cloud and expect to have a mix of private and public infrastructure for the foreseeable future. For example, a Microsoft survey (see below) finds that 81% of respondents either have or plan to use hybrid cloud deployments. An annual RightScale survey shows similar results, with two-thirds of respondents using a mix of public and private clouds.

Against this background of hybrid cloud ambitions, Nutanix sees opportunities as organizations struggle with the implementation. According to Greg Smith, Senior Director of Product Marketing at Nutanix, not having the same technology stack across clouds is a significant roadblock to hybrid adoption.

He says that the "hybrid stack needs a reboot" that can enable a multi-cloud environment with a single OS and management platform that spans clouds, hardware platforms and deployment environments, whether the data center, remote office, edge devices or remote service provider.

Nutanix unveils three components supporting its multi-cloud strategy

Nutanix made three major announcements at .NEXT that buttress its cloud-agnostic strategy and span core infrastructure, cloud services and multi-cloud application management.

• Infrastructure: Nutanix reiterated that its previously announced Enterprise Cloud Platform, which is now called Cloud OS and is comprised of the Acropolis hypervisor and Prism management software , now supports both Nutanix and OEM hardware from Cisco UCS, Dell EMC, HPE ProLiant, IBM and Lenovo.
• Services: The company is building a managed cloud service called Xi Cloud Services to support the Nutanix stack as shared cloud infrastructure. While Xi is conceptually the same VMware's forlorn vCloud Air or Microsoft Azure with Azure Stack, Smith countered that Nutanix is different by being open to enabling its Cloud Platform to run on other public services.
• Google Cloud partnership?: Indeed, the head of Google's Cloud business, Diane Greene gave a .NEXT keynote in which she announced a strategic partnership between Nutanix and Google to work on the technologies required to build and operate hybrid cloud environments. Part of this work includes supporting Nutanix Cloud OS on GCP.
• Management automation: Building on the Calm.io acquisition, which we covered last fall, it announced Nutanix Calm, automation software that allows full application deployments to be described as resource blueprints that are abstracted from the underlying infrastructure. These workload descriptions can then be deployed, managed and scaled across multiple cloud environments, both private and public. Calm will initially support native Nutanix platforms (and Xi), and AWS, with Azure and Google Cloud Platform under development.

Each of these announcements put Nutanix at the center of an organization's cloud strategy and position Nutanix software is the glue binding multiple cloud deployments into a single managed entity.

Faithful to a disturbing trend among large tech vendors, Nutanix is making a big splash about things that won't be released for some time. Although the Cloud OS is available now, Calm won't be out until the fourth calendar quarter.

Worse still, but understandable given the significant infrastructure build out required, Xi Cloud Services are further off. Smith says the "services for disaster recovery are planned for early access by calendar Q1 of 2018" with four datacenters cum availability zones spanning two regions: two on the west coast, two out east.

That's right, Nutanix confirms that the services will initially be targeted only to DR deployments, not cloud-only production workloads or active-active, public-private load balancing. Smith also said that other geographies and specialized regions, such as one with FedRAMP certification are planned, but the company doesn't have any details to share.

My take

I critiqued the announcement of Calm.io and Pernix Data, as "long on vision and short on substance," and in the intervening 10 months Nutanix has made significant progress in adding substance, particularly in the Calm-based multi-cloud management features.

Using a keynote by SAP CEO Bill McDermott to showcase a partnership that has led to support for running the SAP Business Suite on Nutanix, shows a company that's laid the foundation for achieving its strategy to power next-generation enterprise data centers.

As CEO Dheeraj Pandey put it on the company's last earnings call (emphasis added),

While many of our me-too competitors read the form-factor of hyperconvergence as a destination, we are focusing on an operating system which will holistically replatform the enterprise datacenter.

In the same call, Panday noted that half of its new deployments are for

...tier-1 business-critical applications including Microsoft’s SQL Server, Oracle, SAP, Microsoft Exchange, Hadoop and Splunk.

Nevertheless, the explosive growth of AWS and the other mega clouds shows that enterprises are accelerating the move from self-managed data centers to rentable infrastructure and Nutanix couldn't be seen as merely a landlocked platform. Hence, extending its management umbrella (via Calm) to include cloud workloads is a necessary and significant development.

Furthermore, as Pandey indicates in response to an analyst question about back-migration from AWS, tighter cloud integration facilitates moving workloads that aren't written for a distributed cloud architecture back in-house to Nutanix infrastructure.

There is no shortage of multi-cloud management software from both specialist firms like RightScale and Scalr and vertically integrated providers like BMC and IBM meaning that Nutanix must differentiate.

Its strategy of evolving into the preferred on-premise private cloud platform that's also well integrated with the most-used public services is sound. Success won't just hinge on strategic execution, but on the company's success marrying public-cloud flexibility and convenience with customized enterprise security and controls in a less expensive package. While organizations say they want hybrid cloud, the balance between public and private will pivot on which environment delivers the best ROI.

It's a huge challenge given the size and resources of its competition, but I wouldn't count Nutanix out since it has a sound strategy and a demonstrated ability to anticipate, not just react to customer needs.