 Live from Miami Beach, Florida, extracting the signal from the noise, it's theCUBE, covering .NEXT conference, brought to you by Nutanix. Now your host, Dave Vellante and Stu Miniman. Welcome back to .NEXT everybody, Dave Vellante and Stu Miniman. Howard Ting is here as the Senior Vice President of Marketing at Nutanix and one of the people, one of the very influential people behind this event, Howard, first of all, welcome to theCUBE and congratulations on a successful and all-year-old event. Thank you for having me here. Yeah, and thank you for having us. I mean, you must be thrilled with the turnout, the response, the action, the activity, the buzz at the conference. Take us back to sort of the thinking behind this event. Yeah, a couple things. When we started talking about this event a little over a year ago, I thought just from my past history that it was a little bit early to do a first-ever conference, especially with the number of customers we have. My last company, I was at a company named Palo Alto Networks and we did our first conference at about 12, 14,000 customers. Nutanix at the time had probably a little less than 1,000 customers when we first started talking about doing our first conference, so I thought, wow, with one-tenth of customers, could we draw a significant enough audience to make an event like this worthwhile? So we said, as we do at Nutanix, we do things aggressively and ambitiously, so we said, let's just go for it and good things will happen if we just believe in it and have conviction in our ideas. So we pushed forward, we picked a beautiful venue here at Miami Beach, at the Fountain Blue, a historic venue, and then we set a modest goal, about 400 people, which I thought at the time was ambitious, but achievable, and I thought that, hey, if we get 450, 500 people there, it'll be a blazing success. And as with all first-year conferences, things start off a little slow, so the registration numbers were kind of like flat-ish for quite a while, and then in the last six weeks, things just exploded with interest, and we ended up with over 950 registrants, and we had to reconfigure the room, create more space in the keynote room, added more screens just so people could get a good experience, and lo and behold, almost everyone showed up. You had a very low follow, right? Yeah, less than 20 people no showed, which is just unbelievable for a attrition rate for a conference of this size, so we're just blown away with the interest, and then the feedback that we received from the general session yesterday was just astronomical, on Twitter, and face-to-face conversations, it's just so positive. People really love the direction that the company's taken, and all the early believers, all the early customers who believed in us and invested in us were a proven hot commodity. They really have just enjoyed seeing the company grow. Yeah, Howard, I mean, this is a user conference, and what I think impressed all of us is, first of all, you had users in the keynote, when I talked to everybody that's going to the session, because we've been here on theCUBE, so I haven't gotten into the sessions, but lots of users participating, leading, paneling sessions here, and we've really enjoyed the users that we've gotten here on theCUBE, too, so how do you pull so many users in? I mean, that's really tough. We work to go to a lot of these shows, and it takes years for the customer reference team. We know two believers come to the event, but how do you get them to just be part of that whole effort? Well, I think the first thing I have to say is our advocates, our customers, they're our biggest champions, our biggest fans, and they have just enjoyed the Nutanix experience so much from using the products to working with the company, from the support experience. So they're the ones that just believe, and they want to make this thing successful. In a lot of ways, they believe they're part of this company. They're part of what has made this company what it is today, and so it starts with that. And then secondly, obviously, we put a lot of effort and time into recruiting these folks. We set a goal of having two thirds of the sessions being presented by customers, and we achieved that goal, so almost every session has a customer element to it, and some sessions have multiple customers, and even leading up to the conference after we set the agenda, we had customers asking to be part of the content. And then beyond just the sessions, we also really tried to provide an experience that we thought was unique. So we did things like we added a session and negotiation. Our only rule, by the way, it was a session delivered by a professor at Harvard Business School about the art of negotiation. Our only rule was that attendees could not use those tactics on us, and their negotiations with us, but they could use it with their bosses for higher salaries and with their other vendors. Giving something that experience, and then we had Dr. Connalisa Rice this morning giving a great talk about the balance of power and how that also is relevant in the world of IT. And so we just tried to do things a little differently, provide a different conference experience aside from what a lot of the IT community is used to. So we really had the interest of the users in mind, and like you just mentioned, starting the conference off, our first service user conference with our first customer, Intrepid, two IT managers from Intrepid. I thought that was a fantastic way to just demonstrate our commitment to our users and kick the conference off in the right way. Yeah, and I think that the idea that you have two thirds of the content coming or two thirds of the sessions have users providing content. There's a huge differentiator. Of course it's not so easy necessarily for a smaller company to do that, so you've achieved that. And I also like yesterday in the keynote sessions, you were sort of teasing the audience. There was a lot of foreplay with content, which I thought really, really good. And the engineers in the audience were dying on Twitter. They were like, come on, get us to the cool announcements. And then you got a crescendo of applause. It sort of started off with golf claps, and then really it was created a lot of hoot hoots toward the end, so which is exactly what you wanted. So I think you nailed it really. So congratulations on that. Thank you, Dave. And now of course you've set the bar, right? So you're in marketing, so you know that next year is bigger and better things. We'll talk about that, but I want to talk about some of the announcements that you guys made. You really put forth, you sort of, this was to me a next coming out party, no pun intended, where you laid out your strategy to, and G. Raj is very careful about saying, well, you know, we're not quite there in terms of being a platform company, but you're sowing the seeds to be a platform, not just a product. I wonder if you could talk about that. Yeah, you know, I think the company is really an ambitious company. We think we have a very unique opportunity to build one of this generation's iconic companies. Obviously that is a lofty goal. It's words that probably many companies use, but we deep down really have conviction behind this opportunity. So we really think that the company is right now kind of categorized as a hyper-converged infrastructure company. And as I laid out in the keynote yesterday, that's really just a means to an end. Hyper-convergence is a step in the journey, and our journey has a much loftier goal in mind, which is to make infrastructure invisible so that we can elevate IT. And what we mean by that is when you can make infrastructure invisible and take it for granted, it doesn't mean that it's not important or it's not necessary. It just means that you can take it for granted so you could focus your energies, your people, your resources on other things. And those other things that really matter in IT are apps and services, because that's ultimately what drives business outcomes. And so if we can allow our customers to focus their IT energies on apps, development of apps and services, and getting those to market faster, take the infrastructure for granted, we think we can elevate IT, elevate business. So that's our vision, that's our mission, and the series of announcements that we laid out obviously are furthering our journey along in that mission, but it is not the complete mission. There's a lot more to do. Yeah, Howard, I think that you get a great point there. We really want to simplify IT, but it's so that we can get back to running the business and allowing IT to deliver for the business too often. It says, hey, I need this to do this new initiative. Oh, well infrastructure was that boat anchor. It just didn't allow me to do this. We want to unshackle that. We've talked a little bit about how my virtualized workloads are kind of in some ways stuck in the past and how do I move to that modern environment? And if you can provide a platform that supports both the legacy environments and the modern environments and give me back even a little bit more time to go work on things like security and modernizing my apps and everything, I can help move us forward, almost a bridge to the future, if you will. Yeah, and I got to say, I think in the series of announcements that have come out and the press articles that have been written about the announcements, I believe that there's been too much focus on the hypervisor. Yes, we are building our own hypervisor, but we are starting with KVM, we're enhancing and making more enterprise ready. But to us, that is not really the exciting part of the announcements yesterday. I think the most exciting part, and also the demo I believe that got the most applause, was when we converted and migrated a workload from one environment, one hypervisor to another. And that is just the beginning of what we believe will be the foundation of the pride, which is the application mobility fabric. That is the most exciting part of the announcements yesterday. I'm sorry, yeah, you know, I actually said, I said, you know, the hypervisor stuff, I think is interesting, but game changing when I can say, hypervisor container cloud and give me flexibility on that. I mean, that just totally frees me up from everything we have. Absolutely, and it also helps us bridge the old with the new. You know, Gartner talked a little bit yesterday about BiMoto IT and how you need a platform that can support the traditional apps, as well as these newer applications. And today, they're in different silos, different management, different technologies underneath. We think that we can be a bridge between these two worlds. Yes, we need to run exchange, SQL Server databases, Oracle SAP, but we also need to experiment with these newer systems, these newer applications, and allow that innovation to occur. We think that we can provide a common platform across both of these modes of IT. And we believe that this is going to be a journey. We're not going to be able to do everything overnight. We showed a very interesting demo that I thought just ran perfectly and very, very smoothly, where we migrated an app from one hypervisor to another. We need to expand the number of hypervisors we can do, move it into the public cloud, as we also showed yesterday. Those are capabilities that once we deliver those, I think it provides a next-generation V-motion as some people in the audience have termed it. And I think it's a game-changing future for the industry. Yeah, John Furrier calls it inter-clouding. You are going after that business. So we're big fans of Simon Sinek, I don't know if you know Simon Sinek. People don't buy what you do, they buy why you do it. So when I look at your messaging, the why is making infrastructure invisible. That's why you're here. So you start with the why. And in Simon's little framework, that's what successful companies do. You've clearly thought through that, either studying things like Simon Sinek, or that's just the DNA of the company. The how is kind of interesting, because as Stu, you were just talking with JR and Allen, it used to be, I'm going to build a full stack, and I'm going to sell that stack, and I'm essentially going to lock people into that stack. What if the future stack is not a hierarchical stack? What if it's a distributed stack with distributed functions, and you're enabling innovation on top of infrastructure? That's essentially what you're doing, isn't it? Yeah, absolutely. You know, I think the reason why full integrated stacks have been successful is that because there are fewer things that can go wrong, less fewer integration points. And we believe that convergence is the ultimate form of simplicity so that we can, and convergence isn't just about compute and networking and storage, as we've seen in the past. And hyperconvergence is just a play on that term, but we think everything should converge. We think the network should converge in with the storage fabric. We think that virtualization should converge in, backup should converge, cloud should converge. So we need to make all of these layers invisible, and the way we're going to do that is by converging. So we think that the how is very important. The how for us is web-scale technologies. We think that we can bring some very, very unique IP to the table, marrying web-scale technologies with consumer grade design so that we make the experience simple. Because at the end of the day, once you go from a vertically integrated stack to decoupling and having looser abstractions, you need a simple way to manage all that. You need a lot more automation, a lot more intelligence in the fabric to be able to do things. And you saw yesterday in the demo, we started to place those VMs when we spun up the new VMs, and we just decided where to place them. You know, we balance between the two nodes if you recall. And that is a level of automation and intelligence that the infrastructure can enable so that we can take some of the administrative, manual administration out of the process. That is another goal for us, is make things simpler through automation. And that is another part of the demos yesterday. I think that it can be missed. So I just wanted to highlight that. That's great. So the why, make infrastructure invisible, how everything you do is based on web scale infrastructure and the what is, we happen to be in the infrastructure hardware and software business and we make really easy to deploy and manage infrastructure. So very compelling messaging. So again, I think you nailed it. Now, on Monday, you had industry analysts in house and we're doing some NDA stuff and sharing what was coming today, which was awesome. And then you also had a session with financial analysts that you essentially moderated. The questions were very interesting. A lot of VMware analysts there, mostly sell side analysts and a lot of infrastructure folks. Were you surprised by the level of interest, the detail of the questions? I mean, what was your reaction to all that? Yeah, I've spent a lot of time with this community in the last probably 18 months, not just the sell side analysts, but also the investors themselves. The mutual funds, hedge funds, the public market investors, because I think since our last fundraising, there's been a heightened degree of interest in the company. Once we've reached that double unicorn status, as they call it in history, with the $2 billion valuation and public market investors coming in our last round, Fidelity and Wellington, two of the largest money managers in the world and two of the largest tech investors in the world. I think everyone has basically seen that the next logical step for the company is to take it public. And obviously that will happen in due course. And so I think all of the industry analysts or sorry, financial analysts have started to do a lot of work on the company, right? Spend time with the management team, get to know the industry. And also they need to understand what we're doing because it impacts the coverage universe that they currently have. What is it doing to EMC? What is it doing to NetApp? What is it doing to Cisco? What is it doing to Nimble? Some of the companies that they cover, what is it doing to VMware? And so they've spent a lot of time with this in the 18 months. So I think the level of interest, it was probably slightly surprising, probably a few more people than we expected. But the depth of the questions, I was not surprised by it because these guys have done a lot of research on us in the last 18 months. So what have you said publicly that you've shared with that crowd that you can share with our audience? Yeah, so the last time that we announced our financial performance was after our January quarter. And for a private company, we've actually been very transparent. Unlike many private companies who don't reveal their actual numbers, they reveal growth rates, percentage growth rates, 300% growth rates and things like that, including folks that claim to be our competitors that you've had on theCUBE. We give our real numbers. Just like yesterday I revealed that we had 963 registrants. I didn't round up to a thousand. And I round up significantly like some other folks would. I just gave you the real number. And just like we did with our financial metrics. So in that January quarter, after the close of that quarter, we announced we're on a $300 million plus bookings run rate. So that's sales bookings. So essentially that meant in that quarter, in that three month quarter, we did over $75 million in bookings. We also announced that we had 1200 customers at that time. And both of those numbers grew significantly over the prior six months when we last announced numbers. So just tremendous growth in the company. And I think one of the more interesting observations of the business in the last year has been the shift in workload mix. I think hyperconvergence as a category and also Nutanix as a company has been more known to be deployed for newer workloads like VDI or like some big data Hadoop type workload where it was a Greenfield project. What's happened in the last year and a half to two years is the workload mix has shifted dramatically. We're doing mostly server workloads now. And the VDI business while still growing and we believe we're the best platform for VDI. We're such a compelling platform to run all workloads. And I think you saw in some of the announcements yesterday, there is no reason not to use Nutanix for any enterprise workload now. So the workload mix has really changed. And so we think we're building a pretty unique platform here. A couple of assumptions you're making. One I think is dead on. The other one I think remains to be seen. It's that the world is going to be multi hypervisor, multi cloud, multi workload diverse. I think there's no question about that. And you're trying to advance that where I've said in the cube many times this week, we feel like VMware is trying to slow that down. I mean, I think it's clear. It's not in their best interest to have multi cloud, but that's the reality. And you guys see that and you're going hard after that accelerating it. The other is that predictable workloads are going to be less expensive on premises. And the public cloud is going to be best for unpredictable variable workloads. That's an interesting assumption that you guys are making, which has to be proven out. You can control a part of that, not the entire component there. I wonder if you could talk about those two assumptions a little bit in terms of your strategic plan. Yeah, we believe that there is a role for the public cloud. So one thing that we've been very careful to message and I hope this is getting across is that we're not anti-cloud. I think a lot of companies that sell infrastructure would argue against the public cloud. We think that the public cloud is a wonderful thing. And we're very pleased with some of the innovation coming out of AWS and Azure and other public cloud providers. I think our belief, however, is that there is a big percentage of workloads that will remain on-prem. For a variety of reasons, aside from the cost reasons, there are other reasons why they will remain on-prem, including data governance and privacy and some of those issues, security. So we think that our opportunity is to connect the public with the private and make it really seamless for applications to migrate. The problem today with public cloud is that when you go put a workload up there, it's really hard to get it out. Bring it back on-prem or put it in another public cloud provider. We think that the AMF that we're building once it's fully developed will enable us to really bring a higher level of fluidity to workloads between public and private clouds. And that will really, really drive cloud adoption, we think, for some of these workloads. We could see a scenario where maybe when an app starts in the early stages of its life cycle, like in test dev, it starts on the cloud. And as it's scaling up and the usage and the demands are unpredictable, it stays in the cloud because it's more elastic and you pay for what you use. But when it gets to a steady state, like in the fat part of the life cycle, if you will, and the usage and capacity are fairly well-determined, maybe then it gets brought back on-prem. Today, there are no great mechanisms to do that. We think we can provide that mechanism and then that will encourage even more use of the public cloud. So we think that there's a very interesting opportunity there. Howard, I wonder if you could talk about just building ecosystems. We look at companies to take a VMware, take even an Apple, there's always that tension between growing and help all grow together versus what do I kind of take and eat my ecosystem. You've got a new technical, I think it's an alliance partner program that you launched today. There's a lot of your channel partners that are here. There's an event happening this afternoon. Talk a little bit about how Nutanix views those. Yeah, you know, Derage as our CEO is very well known for saying is we are a company that really believes in empathy. And one of the audiences that we have a lot of empathy for are our partners. And I'll give you just a couple, very simple examples of that. When we decided to do an OEM relationship, our first OEM relationship, and this was at the time a very disruptive move on our part to our own business because we had built up a pretty vibrant channel with resellers and distributors across the world. To do an OEM and a company that at the time probably wasn't known to be friendly towards the channel, I think that's more perception than reality. But Dell is a company that hasn't been perceived to be channel friendly. You know, there was a lot of questions from the channel about, okay, how do we ensure that they, all the investments they've made in this business are protected and they still have a great opportunity with us. So we structured our deal with Dell in a way that protects our existing channel. We set up a deal registration system. And this is a little bit unusual in OEMs where, you know, like for example, one of the other companies in our space, VMware, when they do OEM partnerships like with Evil Rail, they just give the software to everyone and it's a free-for-all. And to us, what that does is it creates a huge amount of pressure on the OEM partner and it's a race to the bottom. So it leaves very little for them, right? Because the products are undifferentiated and there's no protection of opportunities. When we struck the deal with Dell, it was a deal breaker issue for us. We would have walked away from that deal if we couldn't protect our existing channel partners with deal registration. So that's one example. The second example is, you know, we think about Dell for example. They're our first OEM, likely not our last, but certainly our first OEM. We have given them a nice runway to get that business to be successful, really give them a great head start before we onboarded others. There have been a lot of companies that are interested in striking OEM partnerships with us, but we believe that our empathy for Dell means we want them to be successful with new tanks. We want them to have a great runway as our first OEM, and so we've said we will take our time and be very, very methodical and thoughtful about other OEM partnerships that we strike. And when we do the next series of OEMs, and they will happen at some point, we're also going to ensure that these OEMs go after different opportunities, whether they're geographic or use case or solutions driven, so that we can create a good environment for them so it's not just a race to the bottom on price. So these are just some of the examples about how we show empathy towards our partners, because your rights do. Any company that's been successful in large has a huge ecosystem, a very vibrant ecosystem, and we are in the journey of building that here, as you see, from all the exhibits here, but we still have a long ways to go. And you're right about the perceptions. I mean, perceptions change after results. I mean, Stu, you were at EMC. EMC was the least channel-friendly company on the planet, and they changed that. And how do you change that? You help the channel make money. Channel money, to make dollars. So we talked to Michael Dell about this a lot, and we're seeing Dell's channel. So I think clearly the imperative to have a strong channel for companies like, whether it's IBM, HP, EMC, Dell, obviously Nutanix, has never been greater. And so we expect great things from that Dell partnership. All right, we're out of time, but tell us about, you know, set up next year, the next next, what should we expect? So Dotnext 2016, our second year in the conference. Obviously expectations will go up now after having an event like this. I don't know if we can replicate the experience of the fountain blue. Frankly, we're simply going to grow too large for this venue, so we won't do it here. We're going to announce the venue and destination for year two at the closing keynote today, so I can't give it away, but it will be a very, very fun destination and something I think our conference audience will really enjoy. So we will do it next year, probably about the June timeframe, as you would expect. We'll keep doing it every year. And it'll be our, I think also what you should expect is every year at this conference, we're going to have pretty exciting and payload of announcements. I think this year really set the tone with just a series of wonderful things that we're shipping and delivering. And every year you should expect that we're going to bring not only game changing innovations and really things that expand our opportunity and the opportunity for our partners, but also continue incremental enhancements in the areas where we were already strong, like in storage. You hear, you heard just tons of stuff about erasure coding and ice guzzy and all those things that really continue to extend our lead on the market. So big announcements, bigger audience, and another fun venue. That's what 2016 promised. So Nutanix, bringing web scale to the enterprise, so you're going to have to have a very rapid cadence of innovation, really looking forward to that. Howard Tink, thanks very much for having us here. Thanks for coming on theCUBE. Dave and Stu, thanks for being here. All right, keep right there. Everybody will be back with our next guest right up to this. This is theCUBE. We're live from .NEXT, Nutanix user event. Right back.