Five Partnerships Driving Nutanix’ Growth In An Altered Virtualization Market

One year after Broadcom’s blockbuster acquisition of virtualization giant VMware, CEO Rajiv Ramaswami told investors that Nutanix partnerships with the likes of AWS, Cisco, Dell, and Nvidia are filling a niche as the market looks for the best platform to host data and workloads.

In a post-VMware acquisition virtualization landscape, the biggest vendors in the data infrastructure space are going to market with Nutanix as customers hunt for the most cost effective and modern IT estate for their work, according to company CEO Rajiv Ramaswami.

“We see these partnerships as both expanding our addressable market and providing us with meaningful go-to-market leverage,” Ramaswami said on the company’s most recent earnings call on Nov. 26.

Ramaswami (pictured) said that Nutanix partnerships with AWS, Cisco, Dell and Nvidia are filling a niche as the market looks for the best platform to host its data and workloads. He cited an expanded partnership with AWS, a soon-to-be-launched Dell PowerFlex offer with Nutanix, and the multi-quarter customer wins that Cisco’s partnership is delivering as Nutanix carves share from its virtualization rival.

“I think having Cisco and Dell selling our products is, of course, positive for us,” Ramaswami said. “And, Cisco has been a good contributor to our new logos this quarter, as well as last quarter.”

While the seasonality and refresh cycles of server and storage devices do come into play, as the software company Nutanix expands into the hardware realm, Ramswami said that overall Nutanix has benefited from its partnerships.

“Last quarter, we expanded our partnership with AWS, the first Dell offering is now in the market, in addition to Cisco and Nvidia as well,” he said.

For its fiscal 2025 first quarter (ended Oct. 31, 2024) Nutanix beat all of its quarterly guidance in its most recent quarter. Revenue for the quarter was up 16 percent year over year to $590 million while annual recurring revenue was up 18 percent to $1.96 billion.

Ramaswami said lumpy, elongated sales cycles are par for the course, but the company’s partnerships are making it easier for customers to swap workloads and find virtualization alternatives at a competitive price.

“We still continue to validate the proposition of 40 percent to 50 percent lower TCO, if you replace a three tier with the HCI, and it also provides you the platform to really expand into becoming a hybrid cloud, which is what companies want,” Ramaswami said.

Nutanix has multiplied its market cap several times since Broadcom first announced its intention to buy VMware in May 2022. Yesterday Nutanix shares closed at $66.15 for a market cap of $16.4 billion.

Nutanix And Dell Partnership

There are two parts to the relationship between Nutanix and Dell, Ramaswami said. Dell XC Plus is a hyper-converged infrastructure system that uses Nutanix Cloud Platform to simplify IT deployments whether they are on premises or in the cloud. The other offer is a storage product that has not yet come to market.

“One is the existing hyper-converged solution that we have, which will be an appliance sale by combining our software on their service that's been in the market now this quarter and it's still early days for that,” Ramaswami said on the earnings call.

The other is Nutanix Cloud Platform for Dell PowerFlex, slated to arrive to market in the first part of 2025, which is expected to address a key challenge to estate-swapping virtualization customers moving to HCI when it arrives to market in the first part of 2025.

“The whole idea of doing that is, now we can find an easier insertion into three-tier deployments without having to change out the hardware,” Ramaswami told investors during an earnings call in August.

The device will be powered by an AHV hypervisor for compute combined with Dell PowerFlex for storage. Nutanix said enterprise customers with a need to scale compute and storage independently will be able to extend Dell’s linearly scalable storage to Nutanix software.

“We expect to see some revenue contribution from it in FY 2026,” Ramaswami said.

Working With Cisco

Ramaswami said the momentum Nutanix gained after it announced its partnership with Cisco last year has not waned and Nutanix has picked up new customers as a result.

“Cisco has been a good contributor to our new logos this quarter as well as last quarter,” Ramaswami told investors last week.

The two companies made headlines and delighted investors in August 2023 when they announced a partnership to deliver the most complete hybrid cloud solutions to simplify customer operations, gain resiliency and speed up IT transformation projects.

Cisco Compute Hyperconverged with Nutanix accelerates infrastructure and application dispatch time through best-in-class cloud operations, flexibility and customer support, according to the companies.

The joint solution takes Cisco’s SaaS-managed compute and networking products – Cisco Unified Computing System with Cisco Intersight – and combines them with the Nutanix Cloud Platform and offers it to customers as a fully integrated, validated system.

“We are encouraged by the partnership in terms of their reps, especially their specialist reps, because Cisco, again, has a very big sales force. But a lot of those sellers are also networking sellers, but they do have a specialist team, sales team focusing on data center sales, and those are the people who are more familiar with the Nutanix offering,” Ramaswami said in May. “So, we are overall encouraged by the contribution.”

The AWS Partnership

Nutanix entered into this strategic partnership after Broadcom’s purchase of VMware. It is designed to simplify cloud migrations for customers who want to leave VMware Cloud on AWS and move that work to Nutanix Cloud Clusters.

“As part of this collaboration, customers will gain access to promotional credits from AWS to support customer migrations and proof-of-concept trials, as well as Nutanix licensing promotions,” Ramaswami told investors last month. “Customers can also gain access to promotional credits for migrating VMware Cloud on AWS workloads to NC2 on AWS through the AWS VMware Migration Accelerator Program.”

Ramaswami said a North American food supplier in the Fortune 100 is one of the early adopters. He said the customers implemented a hybrid multi-cloud environment with the intent of running more work in the public cloud using the Nutanix partnership with AWS as their base.

“They chose the Nutanix Cloud Platform, including Nutanix Cloud Clusters or NC2 running on AWS, along with Nutanix Cloud Management. This enabled them to reduce their projected TCO by nearly 50 percent, while also consolidating their existing data center footprint,” he told investors.

“So clearly, I think that seems to be an offering that Broadcom is not focused on as much. And it created an opportunity for us, for sure,” Ramaswami said. “And customers are concerned as to what might happen with that offering. … So, this is one of the impetuses for the expanded partnership that we have with AWS that we are working together with them to provide easier migration for customers from VMC onto NC2 on AWS.

The Nvidia Alliance

Nutanix was one of the first infrastructure players to offer a turnkey generative AI solution to the enterprise that focuses the company’s core HCI capabilities towards delivering an AI inferencing solution.

Through the integration of NVIDIA NIM inference microservices with Nutanix GPT-in-a-Box 2.0, customers can now build scalable, secure, high-performance GenAI applications across the enterprise and at the edge.

“NVIDIA NIM provides a library of LLMs curated for enterprise GenAI,” Nutanix stated in June. “These models are tied to APIs that developers will leverage to connect GenAI apps to models. A model change or replacement with NVIDIA NIM is invisible to the end-user and they’ll see the results quickly.”

Ramaswami said on last week’s earnings call that a government ministry in the EMEA region that wanted to modernize its infrastructure chose a full-stack Nutanix system to support development and deployment of their cloud-native and generative AI applications.

“They chose GPT-in-a-Box 2.0 solution, including our Nutanix Kubernetes Platform and Nutanix Cloud Infrastructure, as well as our Nutanix Unified Storage Edge and Nutanix Database Service offerings,” Ramaswami said. “A key component of this offering is Nutanix Enterprise AI or NAI, which helps streamline deployment, scaling and running of inferencing endpoints for large language models.”

This can be deployed within GPT-in-a-Box on premises, at the edge, or independently on native public cloud services such as AWS EKS and Azure AKS. These new capabilities help further Nutanix’s vision of becoming the leading platform for running all apps and managing data anywhere, the CEO said.

The Red Hat Partnership

Nutanix Channel Chief Dave Gwyn has told CRN that once customers consider Nutanix as a VMware alternative the conversation can quickly turn to modernizing the entire IT estate and containerization.

Nutanix and Red Hat formed a strategic partnership in 2021 with AHV becoming a certified hypervisor for fully supporting Red Hat Enterprise Linux and OpenShift on Nutanix Cloud Platform.

Under the expanded partnership with Red Hat announced this June the two companies are hoping to deliver ease-of-use to IT environments. The new offer bundles Nutanix AOS with Red Hat Enterprise Linux for traditional operating system capabilities.

“This enables Nutanix to focus on the novel intellectual property delivered by Nutanix AOS, providing a more consistent cloud operating model for running applications and data across hybrid, multi-cloud endpoints,” the companies said in a joint announcement.

Nutanix, in collaboration with Red Hat and the larger open-source community, will also now contribute to CentOS Stream, which works on hypervisor operations as well as networking and storage performance for emerging AI workloads on Red Hat Enterprise Linux.