 from the Wynn Resort in Las Vegas. It's theCUBE, covering .NEXT Conference 2016. Brought to you by Nutanix. Now, here are your hosts, Dave Vellante and Stu Miniman. Welcome back to the Wynn Hotel, everybody. This is theCUBE. This is our coverage of .NEXT. Nutanix's next conference. It's the hashtag is nextconf, hashtag nextconf. And we'll be here for two days. The wall-to-wall coverage. This is our second year at .NEXT. The first year, last year was at the Fontainebleau Hotel. Howard Tinges here is the CMO of Nutanix. Just coming off the key notes, Howard, congratulations. Thank you, great to be here with you guys. Awesome performance today. Last year, 900 people, over 2,500 people this year. You're going to outgrow the Wynn next year. Unfortunately, it was a great venue, so you must be feeling good. Couldn't be more excited. You know, we set a pretty ambitious goal, we thought of doubling the attendance from last year, go from 900 to say 2,000, and to have 2,500 people want to be part of this is just very humbling, you know, and couldn't be more excited. I love what you did at the beginning of the event. It's kind of rare that you have practitioners come out, your champions, leading, you know, the kickoff of the key notes. Introducing themselves, talking about, you know, basically evangelists within your customer base. You had a couple of Nutanix folks up there, but that was fantastic. Coming out to, we are the champions, and of course you were very engaging, made a little joke about the Warriors. Okay, don't do your slides two days before the presentation, but what was your thinking about having the customers out on stage like that? You know, we always just want to celebrate the people who help us get here, and with the typical trade show or conference, it's always kicked off by the vendors' executives, and we started this new trend last year. We said, you know what, maybe it's better to kick it off with our customers opening the show, because you never see that. And so we just took that idea from last year. Our first two customers opened the show first last year, and they had a very funny little banter thing going on, very impromptu humor, and we said, well, what could we do this year? And we had a hell of a time trying to figure out which customers do we bring on this year. So we just, late in the game, we came up with this idea, let's bring our NTCs, you know, it's a first year program. It's our technical champions, all the folks in our partner and user community who are real technology evangelists, and we said, let's get them on stage, and then we did the funny t-shirt thing and the song, and it all came together, and it worked well. A lot of pride, and then the other thing is, because I love when a company can be self-deprecating. So you guys made fun of yourselves, you held up a sign, you walked around Las Vegas, you had the Phil Donahue mic going, and we heard, you know, you held up this Nutanix sign, people are pronouncing it, Nutnix, you know, a little kid did it right. That was a blend, and then F5, making fun of F5, the clothing company, again, a lot of fun. Thank you, yeah. We just wanted to get the conference kicked off on the right level of energy and get it started on the right. Yeah, so Howard, maybe talk a little bit about kind of the brand of Nutanix today. I see one of the ad campaigns you have is, you know, you needed VMware, you know, you wanted AWS, you're going to love Nutanix. Where do you want the brand of Nutanix? When do we think of you, how do we think of you? I mean, most people don't think about most infrastructure companies, so, you know, where does Nutanix fit? Yeah, that's a great question, you know, and it's something that we think about a lot, especially in the last couple years, is we've grown and started to get more into larger accounts and go, you know, take our business throughout, all over the world. And it's really important for us to not only increase awareness of the brand, but also shape the perception of the brand. And you know, we want people obviously think of us as a premium brand, because there is a lot of commoditization, we would say, in hyper-conversion infrastructure now, where we started the company. There are more and more products in the space, but we believe, and I think many of the folks here at this conference would say, we're not anything like them. So we want to project a premium brand, and we also want to tell our story that it's not a box company, it's not a storage company, it's not a company that just does your compute and your storage. It's a company that does your whole private cloud. It does the cloud in a very public cloud kind of manner. We bring all the virtues of public cloud, but we give it to you with the control and long-term economics that enterprises want. So we think that that's the enterprise cloud, and that story has been resonating extremely well throughout our community. And that enterprise cloud is a multi-cloud world, and that's fundamentally to your strategy you heard and were talking about in the open, that your decision not to OEM and become a VMware reseller, which created I'm sure a little tension with your relationship with VMware, but it was a bold move at the time, but your strategy is to really put the right workload on the right cloud. Talk about that a little bit. We believe that in the future, they're not going to be this notion of public or private. We think there'll be one cloud, it'll be an enterprise cloud which connects the two. And within the private, we believe that there has to be openness and choice, because there are going to be times when we want to run our apps on VMware, there are going to be times when we want to run our apps on something else. And right now, it's extremely difficult to move between these different computing environments. And in fact, if you had to move, it's a major forklift upgrade very costly, and most people would not want to do it because the cost doesn't justify the return. So we want to bring seamless mobility, application mobility as we say, between these different computing environments so that customers have that flexibility and choice. That mobility we have delivered already inside the data center, but we think in the future we want to deliver that back between public and private cloud, and between different public clouds. That's the only way I think we're going to really get to unleash the full value of cloud, because today clouds are too closed and restrictive and not open enough. And we think that an open enterprise cloud is really the way that enterprise is going to want to build their data centers of the future. I thought the Gartner data that you showed was pretty interesting because we're a little biased because we commit with this true private cloud thing, but essentially that's what you were showing. Gartner survey, 1,000 people, who's doing private cloud? A lot of hands went up and then they filtered it down. Well, you know, who's doing automation? Who's doing self-service? And it really turned out, I think the number was 7% of the people were actually doing something that would emulate what we would expect in an AWS like public cloud. Your true north is to achieve that on-prem and connect those disparate clouds. Is that correct? Yeah, that's right. And I think part of the reason why we see this kind of unconstrained growth of AWS and the general industry perception is that it's public cloud and there's no going back and it's an AWS world and why would you want to try and build something like that on-prem? I think the reason for that is because there's such a disparity right now between the public cloud experience and the private cloud experience because when you kind of take the 7% and you take that out of the equation, the majority of the enterprises are running what they might call a public cloud but they're really running cloud inspired infrastructure or old infrastructure that they just have been rebranded by vendors to be a cloud offering. There's such a big disparity between the agility, the fractional consumption, the automation that's available. So we believe that we can close that gap. If we can close the gap between the private and public cloud in terms of those dimensions, we think that there would be much more balance between these two. Yeah, I mean, Howard, because I think customers are used to, it's easy to throw a new box in and do things the same way I was doing it before. It's a lot harder to change the way I'm doing things. So, you know, virtualization, adding a few pieces on top, but automating, I mean, that's a different skill set. You know, who are you guys selling to today? Who are the champions of your cause? You know, what's the relationship with the storage buyer? Can you talk about kind of that continuum that you've been pushing along? Absolutely, yeah. In the early years of selling our product, we were probably being brought in by a lot of virtualization teams. And because they were frustrated, they felt like they were being inhibited a little bit by their storage and networking teams to, you know, get the services that they wanted where they could, you know, provision a new virtual machine in their compute environment with a few clicks and a few minutes, they would have to wait days or weeks for the, you know, storage and the lines and the volumes to get managed and provision. So now we gave them that control. So the first couple of years, it was all about selling to virtualization teams, let them kind of unleash the full power of virtualization. More recently, I think we're looking, we're selling much higher up in the organization. We're selling much more to architects and CIOs and VP-level folks who are looking much more broader. They're not just looking at one specific piece of their infrastructure, they're looking at the whole stack and saying, what am I going to build here that can rival the AWS experience? So we're selling higher in the organization, we're selling to people who are thinking broader, I would say. So those tend to be architect types and CIOs. Now, we still obviously have to get to the storage folks because they obviously control some of the budget and they will be impacted by what we do. And I would say that probably the majority of the time now, they see, they embrace the movement. They're not fighting it like they were probably in the first couple of years of hyper-converged infrastructure because they're ceding some control to the server guys. But now they embrace that and they're just trying to figure out, okay, what can I do and what can my organization do to add value to this type of infrastructure? All right. So, Howard, there's a bunch of the big guys now have products and big programs in place to go after what, you know, call in the hyper-converged market. What's your thoughts on the state of the competition today? Look, the competitive environment is clearly getting much more intense. We welcome the competition. We love the fact that so many people have validated the approach that Nutanix has pioneered in the market for over seven years. And we welcome the competition because, you know, I always like to say, you know, we're in Vegas, if you're at a party and you're rocking out, but no one else is coming to the party, it's not a real good party. So I'm glad that everyone's joining the party and this is the place to be. And we started this, you know, we started on this journey to move from hyper-converged to enterprise cloud. And we feel like we've moved well beyond where the competition is. I like to tell people, you know, much of the competition, they're chasing Nutanix of 2012, 2013. Nutanix of 2016 is in a whole different place. So you feel like you have a three-year lead on the competition, is that? I mean, I'm inferring based on the numbers you just threw out, but that's a substantial lead. I feel like we have a multi-year lead on the competition. No one else does multi-hypervisor support. No one else does integrated virtualization. No one else does integrated file and block and now container services. I mean, that's just a few of the major differences. No one else does all the automation. No one does the one-click operational stuff, the mundane stuff. You know, we focus a lot on the low-level details too. How do I upgrade my clusters, right? Which is often a very manual and time-consuming task and people come in over weekends, lose their weekends to do things like upgrading my clusters. We do that with one click and we can do it in production without ever taking the environment down. That's why customers love Nutanix. You guys were talking about your buyer earlier. The two customers that struck me on stage this morning, one was Vonage and the other was NASDAQ. The Vonage gentleman, he was a product manager. He wasn't an IT guy, you know, per se. Of course he was, he was technical, but he was building a product. Of course they're more of a service provider. They are a service provider. And he was talking about the downstream benefits to his business in terms of basically time-to-revenue, faster, that was kind of interesting. The other one that struck me was NASDAQ. Sunil asked, what's your favorite product or feature? And he said the Acropolis Hypervisor, because it helps me avoid the VTACs. So you're hearing, you heard our open, that's a recurring theme in your base. It's the elephant in the room. I mean, it's not, you guys address it directly. VMware's changing quite dramatically. You know, they're trying to circle the wagons and hold on to that franchise, but the world around them is exploding with innovation. What do you make of that trend and your relationship with VMware right now? Yeah, I would say our relationship with VMware is obviously one that is mixed. You know, there are times when we're going to compete directly with them because they're selling a competing product, and many times where we're very complimentary. You heard Sunil say 15% of our clusters now run AHV. Well, the other 85%, the majority of that runs ESX. And we have to ensure that our customers have successful deployments running Nutanix on top of ESX. So in the majority of cases still, I think we're still very complimentary and we're partnering very well with VMware. But there are more and more instances where they want to come in, you know, into our market and try to replicate what we've built. And look, we just want to continue to compete with class and just build the features that our customers want, take care of our customers, take care of our partners, and we think we'll build a great business. So Howard, Nutanix is the leader in this space, but still if you look at the entire IT environment, a small company, that being said, you guys are growing. You've got the new Express product line going down to the SMB. You're going to have many more constituencies that you're pushing at. You know, how do you reach those new audience while continuing to build the brand and grow? There's a lot to do, Stu. I mean, the fact of the matter is we're approaching a billion-dollar sales run rate. You know, we're not quite there yet, but we're almost there. Many companies that have approached that kind of sales run rate, they're already hitting 20%, 30% of their addressable market. You know, in our S1, as you've seen, our addressable market is just massive. It's so big. We're barely scratching the surface where it's less than 1% of the addressable market. So when we look at our growth, the kind of what's been behind us, and now look forward, most of the excitement is ahead of us. You know, even though we've achieved this kind of success, we have 2,500 people here at this event, we're just getting started. And that's what keeps us hungry. You know, I was talking to Derich before I went on stage, and I said, are you proud? And he said, yes, I'm proud, but he also said, and I'm also a little nervous, because this could all go away so quickly. And we all, all of us from the executives on down in the company, we all know, we have to stay hungry and humble and honest, and we got to keep working. Yeah, you're not done yet. And so I thought, I've been in Vegas 24 hours now, so I can ask this question, the IOT question. I thought Matt Eastwood asked a very good question in the analyst meeting yesterday. Matt Eastwood from IDC, he asked about the edge. And nobody mentioned the IOT piece. And then today, on stage, we saw a drone. You know, the brilliance of this is that it was, it was basically a computer that you could make phone calls with that you could fit in your hand. And essentially, you basically showed a, you know, data center infrastructure and a drone today. And that is, to me, an edge device, a cloud device. I mean, I don't even know how to define that, but that's a whole nother opportunity that you guys haven't even talked about, at least not in your messaging. Yeah. Can you comment? Yeah, this is just the beginning of the transformation of the company from a product company to a platform company. You know, part of being a platform company is obviously working the ecosystem and making sure that partners can create value with us and deliver higher value to our customers. But the other part of being a platform company is we want to be everywhere. Running on all kinds of devices, all kinds of servers, all kinds of different, you know, smaller machines and allow apps to run on top. And that is ultimately the, you know, the true north of the company. If we could be a true platform company, run everywhere, run all kinds of different devices and run those apps efficiently, we'll have done something really special. All right, we're out of time but I want to give you the last word. Put the bumper sticker on the event here and what can we expect going forward? You have an event in Vienna in November and then how do you top this? I guess all I'll say is just stay tuned. You know, follow along, stay, you know, watch theCUBE, come to the event. You don't want to miss this. This is what's really happening in enterprise IT. This is where a lot of the action is happening, not just from us, but also from all the sponsors and vendors here. We look forward to seeing everyone down the road sometime at .next. Excellent, well congratulations on this point. I know you're not done yet. You've got a lot of work to do, but it's a great momentum, awesome customer base, great enthusiasm, so congratulations. Thank you, thank you guys. All right, Howard, thanks very much. All right, keep it right there. Stu and I will be back with our next guest right after the short break. This is theCUBE, you're watching live from Las Vegas, .next.