 Live from Nice, France, it's theCUBE. Covering Dotnex Conference 2017 Europe, brought to you by Nutanix. Welcome back, I'm Stu Miniman, and this is SiliconANGLE Media's production of theCUBE. Happy to welcome back to the program CEO and founder of Nutanix, D'Rodge Pandey. The keynote this morning talking about how Nutanix really going from what a traditional bit, an enterprise infrastructure company really becoming its goal of being an iconic software company. So, D'Rodge, bring us up to speed as to how Nutanix positioned itself for this future. Yeah, I think it's been a ride of passage because you can start from AWS on day one. You have to sell books and sell e-commerce, be in e-commerce space, and it was a 20 year journey for them before they could get into computing and people took them seriously. So, I mean, little Apple with iPod and then iPhone and the iPad and then iTunes and App Store and all that stuff was a journey of 15 years before they could really say that they were right. I think for us, we had to build the form factor of an iPhone first so that people realized what this hyper convergence thing was before we could go and ship an Android as an operating system. Because if you had an Android operating system come first, just like Windows mobile operating system was around for a while and nobody really understood how to really go make money on it, I think we had to build the form factor first. And now that people grok it, we're like now we can really go and make software out of this and distribute software and make the Android version of the iOS itself. And that's the thing, I think, as a company we are challenged to balance these paradoxes. Oh, I thought you were an appliance company and you believe in this Apple-like finesse and polish and attention to detail. How do you apply that to an Android-like distribution model where you leave it to others to go and build handsets and so on? I think that's the challenge that we've taken upon ourselves. Now in XI, with the cloud service, we'll have a lot of control. With appliances, we had somewhat control because we at least knew what hardware it was running on. With software, we'd open it up. And opening it up and yet not giving up and the attention to detail is the challenge that this company has to actually really go and undertake. We are looking at a lot of our tools that we've built for certifications and passing the test, the litmus test for hardware. And we're trying to figure out how to automate the heck out of it, make them into cloud services so that customers can now go and crowdsource certifications. So there'll be some new paradigms that will emerge. And the reason why we are well placed for those kind of things is because our heritage is appliance. So now when we think of doing software, a lot of the tooling, a lot of the automation, the certifications, the attention and detail we had, we'll need to go and make them into cloud services. We have some of them, like Cizer is a cloud service, X-Ray is a cloud service, Foundation is a cloud service. So a lot of these services will then go and make the job of certifying an unknown piece of hardware easier actually. I mean, in fact, even day two and beyond, we have what we call NCC, which is a service that runs from within Prism to do health checks. And every two hours you can do health checks. So if there's a new piece of hardware that we thought we just certified, we need to keep paranoid about it, stay paranoid about it, to say, look, is the hardware really the hardware that we want it to be? So there's lots of really innovative things we can do as a company that really had the heritage of appliance to go and do softwares. Absolutely, people always underestimate the interoperability required. Remember when server virtualization rolled out up, the BIOS could make everything go horribly. Even containers could give you portability and run everywhere. Oh, wait, networking and storage, there's considerations there. Do you think it's getting into a point from a maturation in the market that the software, can you in the future take Nutanix to be a fully software company where you kind of let somebody else take care of the hardware pieces and then you just become their software and then their service software services? That seemed like a likely future? Yeah, I think with the right tools, right level of automation, right level of machine learning, right level of talk back. You know, I say talk back, I mean, the fact that the hard beats are coming to us, we understand what the customers are doing and with the right level of paranoia day two and beyond, which is NCC, for example, we call it Nutanix cluster check and it does like 350 odd health checks on a periodic basis and it raises alerts and things like that. So with the right level of paranoia, I think we can really go and make this work and by the way, that's where design comes in. Like, how do you think of X-Razor service and Foundation and Sizer and NCC and so on? I think that's where the real design of a software company that is also not being callous about hardware comes in actually. So I'm really looking forward to it. I think it's not just about tech and products, it's also about go-to-market because go-to-market has a change too. I mean, the kind of packaging and the kind of pricing, the kind of ELA's, sales compensation, channel programs, a lot of those things have to be revisited as well. So, I mean, there's upstream engineering and talk about, there's a lot of downstream go-to-market engineering as well that needs to be done for us. When it comes to go-to-market partnerships are key. Of course, there's the channel, you want to grow your sales channel and grow peace, but also from a technology standpoint, there's a comment I heard you make earlier this week. Google has the opportunity to be that next partner as like Dell was a partner to give you pre-IPO, credibility, Dell's trusted you. Dell, you have Lenovo, you had IBM up on stage there. As a software company, who are the partners that help Nutanix kind of through this next phase? I think you mentioned some of them already. You know, the cloud vendors will obviously open up, and there'll be new ones that'll open up over time as well, where we're thinking about ways to blur the lines between public and private. Because I think the world and including the public cloud vendors have come to realize that you can't have silos, you can't have a public cloud that's separate from the private and so on. So being able to blur the lines, there'll be a lot of cloud partners for us as well. I think on the hardware side, we already talked about all of them actually. Now HP and Cisco are right now partners in double quotes because we go and make our software work on it. But at some level, they'll probably also have to open up, and there's networking partners that have been working with, you know, Arista is a good case in point, Plexi is another one, and security partners. Like Palo Alto could be a very large one over time because we think about what firewalls need to look like in the next five years and so on. So I think in every way, I look at even Apache Foundation, which is not really a company, but the fact that we can really co-opt a lot of open source and build calm marketplace apps where the apps could be spun up in an on-prem environment in a single tenant on-prem environment. And we can drag and drop them into a Xi multi-tenant environment. I think being able to go and do more with Apache, to me it's the, I would say, the biggest game changer for the company would be, what else can we do with Apache? Because we did a lot in the first eight years. I mean, obviously Linux is a big piece of our overall story, you know, not just the hypervisor, but our controller and things like that is all Linux-based, which grows the pace of innovation for this company actually. But beyond Linux, we've used Cassandra and ZooKeeper and our RocksDB and things like that, what else can we do with Apache Spark and Kafka and MariaDB and things like that? I think we need to go and elevate the definition of infrastructure, to include databases and no SQL systems and a batch processing Hadoop and things like that. All those things become a part of the overall marketplace story for us. That's where the real interesting stuff really comes in. How do you look at open source from a strategic standpoint from Nutanix? I think it's been phenomenal because we have then operated as a company that's bigger than we are. Because otherwise, I mean, look at VMware, they don't have that goodness, nor does Microsoft actually. I mean, Amazon is the only one that really goes and makes the best out of open source. Explain that, we say, so Microsoft had a huge push into open source, especially kind of publicly the last two or three years, but they've been working on it. They heavily embraced containers, big on Kubernetes, heavily. I'm going to give you examples. I think there's a lot of architecture in what Microsoft is doing with open source. Of course, Linux has to work on Hyper-V. So that's a given. They cannot make a relevant stack without really making Linux work on Hyper-V. But they tried Hadoop on Windows, and Hortonworks actually even ported Hadoop on Windows, but they were not too many takers actually, you know? Containers will probably continue to make a lot of progress on Linux because of the LXC and LXD engines and things like that. And there's a lot more momentum on the Linux side of containers than they'll ever be on the Windows side of containers. And even Azure is running more Linux than they are Windows these days, so. Absolutely, now that being said, Azure Stack is still Azure Stack. It's still Hyper-V, it's still System Center and Azure Center and things like that. I think Microsoft will have to really redefine itself and change a lot of its thinking to really go and say we truly embrace open source like the way Amazon does, and like the way Facebook does, like the way Nutanix does. I think it's a very different way we look at open source very much like Facebook and Amazon than someone else. I mean VMware is way further away from open source in that sense, I mean vSphere overall. You know, I would say that it probably is Linux based. ESX is Linux based from 17, 18 years ago that I'm sure that CodePath has been forked forever. And it's very hard for them to go and uptake from open source from the overall upstream stuff, actually, that we've been able to do. I mean, our stuff runs on a palm-sized server. A palm-sized server, imagine, that's what we put in a drone and that's the foundation of an edge cloud for us in some sense, you know. Our stuff runs in an IBM power system because IBM was doing a lot of work with open source KVM that made it easy for us to port it to HV and so on. So I think HV has a lot more momentum because it shares that overall code base with open source as well. And I think over time we'll do many more things with open source, including in the platform space, or the PaaS space than ever before actually. Okay, how's Nutanix doing globally? You know, what more do you want to be doing? How would you rate yourself on kind of, Nutanix is a global company? I think it's a great question and it's one of those that's a double-edged sword actually and I'll tell you what I mean by that. So when you stop growing, non-US business becomes 50% because that's pretty much the reflection of IT spend. Half the spend is outside the US, half the spend is within the US. Right now we are 65, 35, which is a very healthy place to be in actually. I don't want this thing to change to like 50, 50, and because that's a proxy for how we stop growing actually. At the same time, I'd love to be shipping everywhere because, again, as I said, the definition of enterprise cloud is even more relevant in parts of the world that is not US actually. And in that sense, I think just being able to go and maintain that customer base outside the US, I mean, being able to do it, and I mean, like, we recently sold a system in Myanmar actually and I was telling my friends that look, now I can die in peace because we have a system in Myanmar and so on. But the very fact that they are partners and there's a channel community and there's technology champions and there are experts, there are certified people in these remote parts of the world. And the fact that we can support these customers successfully says a lot about the overall reach of the technology. The fact that it's reliable, the fact that it's easy to use and spin up and the fact that it's easy to get certified on. I think it is the core of Nutanix, so I feel good about those things actually. All right, you've reached a certain maturity of product market adoption and we've seen Nutanix starting to spread out into certain things, sometimes we call adjacencies. You talked about some of the different software pieces. How do you manage the growth, the spread and make sure that simplicity, we were talking to Sunil this morning about you absolutely want simplicity but you also want to, where does Nutanix play and where don't they play? You got a question actually? So there's a really good book that I was introduced to about two years ago and it's also, there's some videos on YouTube about this book, it's called The Founder's Mentality and the YouTube video is called The Founder's Mentality as well and it talks about this very phenomenon that as companies grow, they become complex so they introduce a problem, it's called the paradox of growth. The thing that you wanted to really do was grow and that thing that you covered kills you because growth creates complexity and complexity is a silent killer of growth so the thing that you coveted is the thing that kills you and that's the paradox of growth actually in very simple terms and then it goes on to talk about what are the things that you need to do because you start as an insurgent company and over time you start acting like you've arrived and you're an incumbent now all of a sudden and the moment you start thinking like an incumbent you're done in some sense, you know so what are the headwinds and what are tailwinds that you can actually produce to actually stay an insurgent? I think there's some great lessons there about an insurgent mindset and owner's mentality and then finally this obsession for the front line how do you think about customers of the first class thing? So I think that's kind of one of the guiding principles of the company is how can we continue to imbibe the founder's mentality in there as well where every employee can be a founder actually without really having the founder's tag and so on and then internally there's a lot of things we could do differently in the way we do engineering the way we do collaboration. I mean these are all good things to revisit design not just the product design piece but organizational design. What does it mean to have two pizza teams and microservices and product managers and prism developers and calm developers assigned to two pizza teams and so on QA developers and so on. So there's a lot of structure that we can put at scale that continues to make us look small continues to have accountability at a product manager level so that they act like GMs as opposed to as PMs where each of these two pizza teams are like a quasi-PNL. You can look at them very objectively and you can fund them and if they start to become too big you need to split them and if they're not doing too well you need to go and kill them actually. All right. Derish, last question I have for you enterprise cloud. I think when it first came out as a term we said it was a little bit inspirational. What should we be looking at for the next year to really benchmark and show as proof points that it's becoming reality from Nutanix? It's a great point. You know obviously when Gartner starts to use the term a very close term, they've used the term enterprise cloud operating system and in one of the recent discourses I saw enterprise cloud operating model. That's very similar to system versus model but the operating model of the enterprise cloud is based on the tenets of a web skill engineering the fact that things are on commodity servers and everything is pure software and you have zero differentiation in hardware and all this differentiation comes in pure software, infrastructure is code. All those things were not going away. Now how it becomes easy to use so that you don't need PhDs to manage it is where consumer grade design comes in where you have this notion of prism and calm that actually come to really help make it easy to use. I think it's the core of enterprise cloud itself. I think obviously every layer in this overall cake needs more features, more capabilities and so on but foundationally it's about web skill engineering consumer grade design and if you're doing these two things getting more workloads, getting more geographies, getting more platforms, getting more features all those things are basically a rite of passage and you need to continue to do them over time. All right, well, dear Raj, I had a customer on and said the reason he bought Nutanix was for that fullness of vision so always appreciate catching up with you and we'll be back with lots more coverage here from Nutanix.next here in Nice, France. I'm Stu Miniman and you're watching theCUBE.