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Nutanix grows subscription revenue

It made its name in hyper-converged hardware, but Nutanix is now growing its SaaS-based software infrastructure business

Nutanix has posted revenue of $313m for the first quarter, growing 14% from a year ago as the company shifts to subscription-based pricing.

Pandey Dheeraj, co-founder, CEO and chairman of the company, said: “Some 51% of our billings in our first quarter were derived from subscriptions, up from 31% in the same quarter last year, and our subscription revenue grew by 104% year on year. As we look ahead, we expect to continue this shift towards subscription, driving a cloud-like, pay-as-you-grow business model.

In a transcript of the earnings call posted on the Seeking Alpha financial blogging site, Dheeraj described why IT infrastructure is fundamental for business. “People say infrastructure is a commodity as it becomes good enough, and all the value will move higher up,” he said. “They are so mistaken. They don’t know how hard infrastructure is to execute and make a reliable business out of.

“There is a reason why hardware incumbents struggled to monetise OpenStack in response to Amazon. Ask Oracle, and they’ll tell you about all the pains of building an infrastructure stack.”

Nutanix feels its biggest opportunity is in moving legacy architectures over to hyper-converged infrastructure. Dheeraj said most hardware companies are still selling on-premise three-tier hardware based on a blade chassis and fibre channel switches and storage arrays. Businesses are migrating this to software-defined infrastructure using virtualisation.

Discussing weaknesses in Azure Stack and VMware, Dheeraj said: “Humans can work around weaknesses in good enough business software, but applications cannot work around good enough infrastructure that they run on. Good enough infrastructure is an oxymoron – period.”

Read more about hyper-converged infrastructure

  • In this essential guide, we include articles looking at best practice and key technologies in server, storage, networks, DevOps and hyper-converged systems to make the most of your hybrid IT.
  • Nutanix used its ‘Next’ 2018 conference and exhibition series this week in Europe to detail the scope of its Xi Cloud Services offering. This is a suite of cloud computing functions.

Nutanix has shifted its focus from primarily offering hyper-converged hardware to positioning its AoS hypervisor as part of a core operating system for cloud computing. To coincide with its results, the company announced the general availability of Xi Cloud Services, a suite designed to create a more unified fabric across different multi-cloud environments.

The idea is to make infrastructure invisible, said Dheeraj. “It has been our mission since we were founded to make infrastructure invisible to our customers so they can focus on their applications, not where the applications reside,” he said.

Nutanix also announced Xi IoT platform, which it said delivers local compute, machine inference and data services to perform real-time processing at the edge of the network.

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