Nutanix Partners Finding Wins Amid Broadcom-VMware Upheaval

‘I’m more encouraged about Nutanix than I have been in some time. Nutanix shot the puck where the skater was going. It’s benefiting them,’ says Tim Joyce, CEO of Nutanix partner Roundstone Solutions.

The uncertainty around VMware—now cut four ways under Broadcom—has been feeding a steady pipeline of customers to Nutanix partner Roundstone Solutions.

“I’d say the last three months,” said CEO Tim Joyce of when the momentum started to pick up. “I was starting to talk to customers. And they were questioning their investment in VMware, whereas before it was still too far away from the acquisition.”

Since the end of October, as Broadcom missed its self-set deadline to close on the VMware deal and China appeared to hold up approval, Joyce said more of those customers are beginning conversations about switching.

“Several have come to me and said, ‘We want to look at getting off of VMware because it’s too expensive. It’s a feature, not a chargeable one, and we just don’t see the need to pay for it anymore,’” Joyce said. “Customers are recognizing that there isn’t going to be much investment. Prices are going up. The amount of talent that left VMware leaves a huge hole, so why pay a premium for a product when they don’t have to?”

Broadcom closed its 18-month, $61 billion pursuit of VMware on Nov. 22.

Another Nutanix partner who asked not to be named due to the partner’s relationship with VMware, said under the Nutanix channel leadership of Senior Vice President, Worldwide Channels, Customer Success David Gwyn and Vice President, Amercias Channel Christian Goffi, the hyperconverged infrastructure all-star has revamped its go-to-market to allow channel partners to pursue deals on their own and built momentum by “leaning in on the channel.”

Now, as more VMware customers explore alternatives, Nutanix gives them strategic reasons to look in its direction, according to the partner.

“In the context of the Broadcom-VMware [deal], customers are looking for expert guidance, flexible choice and compelling value. Our partnership with Nutanix enables us to deliver on all three,” the partner said. “It’s a great time to be a Nutanix partner.”

Nutanix’s most recent earnings beat expectations as first-quarter revenue was up 18 percent year over year to $511.1 million, while annual contract value was up 24 percent year over year to $287.2 million. The company also spent $17 million in free cash as part of a promised share-buyback at the end of last fiscal year.

Among the company’s financial highlights was a deal for its generative AI infrastructure, GPT-in-a-box, with a customer in the U.S. federal government.

Nutanix CEO Rajiv Ramaswami said the company’s recently unveiled partnerships with Cisco Systems and Red Hat are a critical part of giving Nutanix customers leverage in a market dominated by VMware.

“I think collectively we bring together an ecosystem that ultimately helps customers be successful,” Ramaswami said in response to a question from CRN following the earnings report. “That’s what it’s all about. So, and in this case with Red Hat plus Nutanix, there’s a complete stack offering that includes a full-stack, modern apps platform, along with leading infrastructure platform with us that customers know work together very well.”

Roundstone Solutions’ Joyce said whether it’s finding a new stack for a VMware customers looking for another price or meeting the moment with infrastructure solutions built around hybrid cloud and AI, Nutanix has positioned itself well.

“I’m more encouraged about Nutanix than I have been in some time,” Joyce said. “Nutanix shot the puck where the skater was going. It’s benefiting them. People recognize that cloud-first is a flawed strategy. Being smart about where you put your workloads is more important. That bodes well for Nutanix because they have a solution that covers the gamut.”

Ramaswami Addresses Broadcom-VMware Impact

Following the recent earnings call Ramaswami (pictured above) fielded questions from industry journalists about Nutanix and the opportunity that Broadcom’s acquisition of VMware presents to its partners. Here is what he had to say in that interview.

We’re hearing a lot about the confusion that is happening in the sales trenches following this deal. This seems like a good environment to recruit VMware partners. What are you telling them about Nutanix?

From a cultural and value perspective, Nutanix is here for the long term, and we obsess about our customers. We’re telling those partners that we are here for them.

Many of those partners are also our partners and we tell them this is a great opportunity for you to do the right thing for your customer. We’re helping you in terms of giving you incentive, making it worthwhile for you in terms of their profitability to get us new logos.

New logos for Nutanix means partners get paid more. At the same time [with Nutanix], the customers are going to be looking at an option that’s more long term and there for them.

Congrats on the GPT in a Box win this quarter, is there a timeline for when partners can hope to see a services or installation opportunity around this?

The offering is here in the market today and I would like to invite our partners to start coming to us. We’re happy to train them. It is still early days for sure, but there’s going to be a lot of opportunities here for partners to make money on top of this.

Putting together AI applications is not simple. We’ve tried to make it as easy as possible from a GPT-in-a-box perspective. But even on top of that to get an average customer up and running with GPT in an environment is going to require services.

Yes, we can help. What we’d really like to see over time is for partners to be able to go out and drive those services and get AI to be adopted.

You mentioned during the earnings call how Nutanix plus Red Hat offered customers this full-stack competitor to VMware. With that, in addition to your partnership with Cisco, it seems like a feeding frenzy now in attacking VMware’s market share. How are you looking at that?

One of my top strategic objectives even three years ago when I joined the company was to get leverage through both our channel partners and the team as well as strategic partners. And that’s what we’ve been doing independent of anything happening on the outside.

Cisco, RedHat—I think collectively we bring together an ecosystem that helps customers be successful. Ultimately, that’s what all this is about.

With Red Hat plus Nutanix, there’s a complete stack offering that includes a full-stack modern-apps platform along with a leading infrastructure platform with us that customers know work together very well. They can go take that to market.

Cisco, of course, has a best in class, go-to-market engine and is very strong in terms of driving the partner channel as well, and we love the fact that they’re reselling our product in the market and compensating their sellers and their channel partners.

What are customer concerns you are hearing following the Broadcom-VMware deal?

This acquisition is changing the relationship that customers are going to have with the company as they go forward. Broadcom’s business model has been really to maximize the assets that they acquired. They’ve said very publicly that’s what they’re going to do with VMware as well.

And so VMware customers are going to feel this when that happens. And whether it be concerns around pricing, whether it be consensus around support, whether it be concerns around potential innovation road map or what’s going to happen with some of the business units, etc.

For customers who are looking to reduce their risk, we are a good alternative. We are, in fact, probably the easiest alternative and even before all of this transpired, we’ve been doing a lot of work both interoperating with customers deploying VMware as well as converting VMware deployments.

Has this upheaval at VMware created a recruitment opportunity for Nutanix? I know some of that has happened already, but how significant is that?

We have been recruiting. This deal has been on the table for a year and a half now already. We have recruited talent, including good talent from VMware.

Frankly, I would say the hiring environment for us is probably the most favorable it has been compared to the last three years that I’ve been here. It was actually quite tough [during] COVID with a lot of people job-hopping, and that’s completely changed.