 Okay, we're back live in Oracle Open World 2012. This is siliconangle.tv, siliconangle.com is the cube. Our flagship program will go out to the events. Extract the signal from the noise. And I'm John Furrier, the founder of siliconangle.com. And it's always good to have ex-Oracle executives on, especially guys who built product. And we have another one here. I'm John Furrier. I'm John Furrier with my co-host. I'm Dave Vellante of wikibon.org. And we're here with Dheeraj Pandey, who is one of the co-founders and CEO of Nutanix. Welcome. Yeah, thank you. Welcome back. We had a great chat in Oracle Open World. VMworld. I mean VMworld, I mean world. Little late in the day. We're at Oracle World. We're at Oracle World. Where are we? IBM Edge? No, no. At VMworld, you've been in the business for a while. Ex-Oracle, so you know Oracle. You know how they operate. Larry's doing his thing. What's your take on his keynote Sunday and his posturing and where has he taken this? You know, I've had healthy respect for this company maybe because I've actually worked here in the past. I tend to look at Fortune 500 as wealthy people. And the folks who actually serve them are like the private wealth manager, you know. When you have 50 plus million dollars in your bank, you don't get excited about Scott's trade or E-Trade or $7 transactions. You're looking for a UBS heavyweight or you're looking for a Credit Suisse heavyweight or a Goldman heavyweight. White gloves. Yeah, absolutely. Treated well. Massage. It's all about the trust. And Fortune 500 is that kind of a white club where I think these usual suspects, the top seven Oracle, EMC, Microsoft and IBM and VMware and all these companies play, you know. So I think he's playing it for the right audience. It's about trust. It's about the portfolio. It's like, well, we can do everything for you and we've never failed you in the past and we never will. Companies like ours, you know, I tend to look at ourselves as the up and coming hedge fund which has the best algorithms in town. Micro, not a micro VC for sure. Not a micro VC. Yeah, so, you know, our software makes it look like we have a portfolio as well. We can manage it in real time. High frequency trading this and ETFs that and emerging markets, everything, you know. But at the end of the day, a wealthy guy is not going to come to a hedge fund directly. Yeah, I mean, we're critical of Oracle. Only because it's fun to do that and, you know, because we're small time compared to Larry. We'd like to throw the punches at Larry once in a while. But, you know, as I said on Twitter, I was also, you know, giving him props because big companies can be laggards fast. Larry punches, he moves. I mean, he's not afraid to see something across the chasm and saying, you know what? This is going to affect my business. I'm going to be competitive and I'm going to compete and change. Yeah, I mean, I call him and Joe as the secular guys in this industry. They have no religion. They're kind of the atheists. You know, Larry said early on in maybe the late 90s and early 2000s, we'll never acquire our way into technology. We'll build, he was building apps for 16 years until he decided to say, you know what? Enough is enough. We're going to buy people soft and get our way into applications the other way, right? Yeah. The same person who said never acquire is the guy who's saying we'll go and acquire $35, $40 billion worth of assets in the next 10 years, right? I mean. He then said he'll never be in hardware. Now you see all hardware. Their church is survival and serving the customers. If you look at Joe and Larry in particular, very customer-centric, sales-oriented, technology-based companies. And the most important thing, no religion. EMC had no religion. If you look at any company that had religion, SGI and NetApp and, you know, Sun, they had a lot of religion. Sun was like, oh, it's all about the spark. It's all about the spark. It's about the winds of change. We've got to know exactly what's popular until the X86. SGI was like that. NetApp was all about waffle. When EMC said, you know what, let's acquire companies. Let's not try to integrate them with our dot or whatever else that we actually want. You're right, the industry's littered with companies that are not mad at religion. Larry just came up a CNBC interview and he said, I denied having any interest in large acquisitions. This is just today. Just now, rules out a NetApp acquisition. I don't know where that came up, but I came up on Twitter on Sunday night, which we were kind of going back and forth. And it kind of makes sense. You look at the size of NetApp. If they continue to, if they don't stay up, they could be a target. So we're speculating on that. Dave doesn't think so. He defended Mark Herd stood by his side and then still critiqued HP. Said it hurts interval running Oracle. Obviously it's a great operator. They've got a big machinery to run. How do you guys look at the big guys? So Larry, you guys are the classic Silicon Valley or technology startup. You know, you build some technology. You start out as, you know, not a hedge fund, but now you're kind of a hedge fund. You've got more portfolio, but you're rising up. So as a rising up, you've got to dance under the elephant's feet and watch that. So as the co-founder and CEO, how do you, how do you do that? One, and what are some of the things that you're using to help you grow your business? Sure. I mean, if you look at it, we're also building an engineered system, like Exadata, like Exologic, like Vblock, except that it's an engineered system for the masses. You're saying engineered systems don't need to be big iron and they don't need to start at half a million bucks. They could start at sub-100K and it can keep going and adding to this stuff. So if in a similar space, except that our customer base is the global 10,000, right? And I think that's where we'll go in global 10,000, right? Okay, got it. So it's going to be the mid-market and then eventually we'll rise up to Fortune 500 in the next two years. It takes a brand, it takes a partner report with two to come out, but these are real laggers, you know what I mean? In the product adoption curve, you know, the early majority, the late majority laggers. You can't just jump to eating the lunch of Oracle. You got to kind of nibble away at breakfast, you know, and then move your way into the market, right? Start low. Absolutely. And I've said, you know, as a hedge fund, you know, we might have the best algorithms in town, but you never are competing with the UBS wealth managers, you know, they have a portfolio, they've had this thing going for the last 200 years. There's something in it for them. And as long as they're agile, just like Oracle is, and EMC is, they're agile companies, they'll actually survive the winds of change that actually. So you guys just had a fresh round of funding. So let's talk about your company. So you got some fresh funding. How does that change the company and the mission that you're on right now? Any changes? Any acceleration in your plans? Any new stuff happening? It's interesting to say that, you know, we had a board meeting a month ago and the board said, keep doing more of the same, which means spend more, you know. And at the end of the day, they're like, well, you guys have been so good at taking risks because we've done some, something's impossible. Three years of being in business, we incorporated it exactly three years ago. And we've done more business in three quarters of selling, more like eight to nine quarters of Palo Alto, Data Domain, Riverbed, done more business than that. So now the feedback has been tremendous and we have to go and put a lot of feet in the ground. So the next 12 months, you'll see this company really bloat in size, become really big for the right reasons, all for the right reasons. We have to cover a lot of ground, a lot of, and we have large swaths of territory that are completely unmanned today. So light speed was your main VC? Light speed, COSLA, Goldman Sachs, and Battery. Who did the A-Series A-Round? Light speed? They also did data stacks, they had them on as well. Yeah, absolutely. I mean, light speed portfolio's looking really good right now because they were not swayed by the Pretty Girl, which was a consumer tech for the last two, three years. They stayed with the religion, which is infrastructure for them. And they have some really good companies in the portfolio today, including us and Nimble Storage and data stacks and even in a company like Nest. Who would think of Nest as being infrastructure company? So you're talking about the Fortune 1000, you've serviced the global 10,000. At the same time, these customers, they don't buy from you because they want to, they buy from you because they have to. So why do they have to buy from you? What is it about Nutanix that makes it so compelling? I think there are a few things that we go and talk about. One is, look, engineered systems is all about simplicity. And simplicity means usability and supportability and affordability. The fact that you can start small, you don't have to make a mega decision of a million dollars before you can really go and do something. And you can grow the same system over time. So I think that's actually a big killer. The way people got in dear to Salesforce because they said, well, I can pay by the month by the user and I can shrink by the user by the month is exactly what's gonna happen in infrastructure as well. People will say, why can't I grow a month at a time? Why can't I grow a $20,000 at a time? As opposed to having to grow half a million dollars at a time and then making the systems be unused for half the time or more before it really fills up. So I think that key message around what the infrastructure of the next generation will look like is resonating really, really well. And now while we focus on the global 10,000, we will uplift ourselves to global 500. You'll see that in the next 12 months because as we go over the hump of the bell curve of adoption, we'll go to late majority and laggards, our architecture is beautifully built for that because we can scale to very large number of machines which is exactly what big companies are looking for. They want to start with 100 nodes and go to 1,000 nodes and nobody can touch us with that, nobody. So, Gary, take us through the perspective of who you're disrupting as a startup because you got to do a little bit of disruption, you know, to keep on pushing and spending and growing and creating more business. And then how does that relate to Oracle Open World here? Your role and your relationship with Oracle, you know a little bit what's going on there and how does that all tie together? So everybody's heard of NetEaser and Teradata and now Exadata. These are like engineered systems for analytics and databases. Then came Vblock, which was an engineered system for virtualization. What's common among all of these, they're all big iron systems, they're all engineered big iron systems. We're saying engineered systems don't need to be big iron. They can start small and grow as they go, right? So today in the field, we see a lot of EMC, a lot of NetApp, a lot of Cisco because you're not just a storage appliance, we are a data center in some sense, right? It starts at a $80,000 street price and then goes in from there. So we block and tackle a lot of server guys and storage guys together. Now, why are we winning? I think part of it is because we're going and selling to the cloud guys, the virtualization guys, the application guys. Basically, you want a shadow IT. They're like, you know what? I don't want to deal with my storage guy and my networking guy and so on. If I have a problem, I pick up the phone and I call Nutanix, right? In fact, the next step from Nutanix is Amazon. So if you are aspirational about owning your hardware, you'll buy a system like Nutanix, which is engineered, it's factory stitched. It is extremely- You don't have to over-build. Pardon? There's not a lot of over-building and provisioning. Absolutely. That's the key advantage. That's why the cloud guys like it, right? And it's also usability, like, you know, BlackBerry was a smartphone and so was iPhone. At the end of the day, you know, you can have various kinds of engineered systems. One of them, some of them are very clunky to use. Some of them are very easy to use. And I think we've spent a lot of time on those things as well, which perhaps becomes an afterthought for a lot of infrastructure companies. So for the CIOs out there and the innovative IT guys who are looking at their infrastructure saying, hey, you know what? We've got some blue sky ahead of us. You know, the dark ages of our past. We've got some, you know, growth. We've done some consolidation at the center. We've taken our medicine. Now we want to kind of regrow. We don't want to screw with the existing systems. So we got that there, but I got some playground to work with. That was classical eating Amazon or something else. What do you share with them about the dynamics of that and with just your product and other things? What's your advice to those groups? How should they look at that? What's their personnel package look like? And what strategy they should take. So the first thing we actually go and even figure out is if ED's guys are too small, then I think it's not worth it for us. If they're like S in the SMB with about 50 hundred employees, there's no CIO there. They might not even be director of IT, right? But if it's an interesting company, the M in the SMB or even global 500. Like 5,000 employees. Yeah, I mean, not even 5,000. It can be 200 actually. It's interesting enough because they have a director of IT who has to go and own some hardware on-premise. Okay, got it. They can't have virtual desktops lie in Amazon or they can't have, you know, things like exchange cluster lie in Amazon just yet because it's not prime time ready for SLAs and performance and reliability just yet, right? So anybody who wants to own on-premise hardware will have to think whether they want to build it the old way with blade chassis, diskless blades, Cisco networking gear and a storage appliance or they want to look in a new way which is engineered from the factory and all the complications of IT are taken care of by Nutanix. So you have one phone call away from, hey, the infrastructure has problems. In fact, we go on to say we'll take care of a VMWare problem. We'll take care of your VMWare problem. It's like on-premise cloud. Absolutely, absolutely. Dropping on-premise for security reasons. Security compliance. But you guys are tied directly for cost of ownership. Yeah, and security compliance, SLAs and performance and one of the very subtle points is tax depreciation. So capital depreciation over three years is for a lot of people still is very meaningful because they're saying, you know, if I like the OPEX part of it but if I could own the hardware then three years later I can actually get capital depreciation very tax-friendly for me. It's not the same with Amazon actually. Yeah, it's a nice nuance to have there. It's a nuance that they can really place into your sales. Absolutely, and I think a lot of people just believe that they can do it better if it's a smaller cloud as opposed to being lost in a million servers and not knowing where you're running, you know, why it's slow and stuff like that because Amazon is still a developer-friendly cloud. It is not built for IT guys just yet. I think it'll happen over time as you see more maturation in this market, you know, but I think in the next three years people want to believe in the tenets of disability data infrastructure on the things that you actually brought about last time. So one area we're doing a lot of research in, Dave and I and our team is software-led infrastructure. So we're trying to take this convergence notion of server storage and compute. I mean, no, server and compute, storage and networking collapse together. Yeah, it's classic convergence. But now at the Nacera we talked about at VMworld is now software-defined networkings the rage. Now the marketing of that is software-defined data center. So that's going to be a hot trend. It's going to change some things and be some nice things under the covers. How does that affect your business? Does it affect your business? How much software is involved in what you guys are doing in the build-outs? And how relevant as to the customer base right now? I think it's a great question. In 2010 when we were actually converging compute and storage, everybody was a naysayer. They said, you guys are smoking because storage belongs to a separate group, service belongs to a separate group. And they had the Fortune 500 prism in their mind. They were looking from the point of view of Fortune 500. Territories, boundaries. They didn't see Hadoop coming. They didn't see X-ray data coming. They didn't see a lot of that stuff coming. 2011, a lot of those naysayers became fencers because they started to see Fusion IO on the server side and they said, hey, storage is a serious business on the server side of the world. But now how do you make it enterprise-grade? The same guys in 2012 are now flocking together and mobs and saying, this is the next generation. Yeah, big data analytics is the hottest thing you can do. Absolutely. And not just that. The fact that what you could do for big data is true for virtualization as well, for private cloud as well, is actually the eye-opener for these guys. So I think before Paul left EMC, you know, the nice guy, sorry, VMware, there was a Wall Street interview. He said, you know what? Data centers are going to look all homogeneous. They're all going to look like commodity x86 servers and everything is going to run inside of them and it's going to be all software. So they were doing it for compute and memory. With NYSERA, they want to do it for networking. And storage is the last frontier. So in the last three years, my co-founding partner, Mohit, who has the DNA of Google File System, he's actually built a system that is all software. So we are not tied to anything hardware at all. Now that doesn't mean that we have to ship software. It's one thing to say that you're not beholden to a super micro, hardware box, or a quantity. You've got some portability. Absolutely. And if the price changes in the hardware. So everything, you know, raid and fault tolerance and clustering and snapshots, cloning, the DR, all that stuff, journaling, all that stuff is in pure software. Now it's more painful to actually build such systems or is the right way for the future, you know? So you've got this hybrid from a storage standpoint, you've got flash, you've got spinning disk, you're saying essentially, we don't really care whatever the customer wants, wherever the industry trend goes, we can manage that. But talk about, so one of the things John mentioned was the software-led infrastructure. And we've put forth this vision where all active data is going to be on flash and you've got the bit bucket. We're not the only ones talking about the bit bucket, but I think the thing that we've really focused on is the metadata management. So can you talk about how you manage that metadata and where the right place to do that is and you know, is it you? Is it VMware or is it who? Great point, I think, you know, it's a good thing you asked this question because one of the biggest cornerstones of what we build, the big component is the metadata because you're going to manage a lot of data. And in even the early Hadoop systems or Google file systems, they were constrained by one metadata server, one big machine, one big iron. And it became a single point of failure, single point of bottleneck. Hadoop started till about two months ago until Hadoop 2.0, where the name node was the single point of failure, the single point of bottleneck. Use that, and you're starting over. Mohit, our CTO from day one, was very clear because he had seen Google file system. He's like, well, you don't want to go through the pains one more time. Metadata has to scale at the same rate as data. You add a node, should balance your metadata as well as balance the data. So if you have a hundred nodes, your metadata runs on a hundred nodes. If you have a thousand nodes, your metadata runs on a thousand nodes. And with some very clever techniques, you can actually scale it to a point where even at 5,000 nodes, you don't have a problem. Because one of the key things about metadata scaling is when you add a node, does everybody have to change to redistribute some of the parts of the metadata to this new node? So you eliminate any kind of coherence you use by spreading the metadata on all the clusters? Yeah, and I think there's a step further than that, that we are completely lockless. So you don't have to take locks or do any kind of distributed transaction like the SQL database had to do in the last 15 years of two phase commit and locks and things like that. And these are key elements to scaling the metadata. And so where should it belong? I think, can it belong in VMware? I think VMware has been managing some form of metadata for the last 10 years with its VMFS, but they're very limited. For them, a metadata unit is a megabyte or more in terms of the block size. The interesting stuff has to be at four kilobytes, eight kilobytes, can you do deduplication, encryption, compression at such fine boundaries? When you do such fine boundary metadata kind of expression, then you have to scale it to hundreds of terabytes, even terabytes of metadata. Say it outside the channel. Sorry? Outside the channel. Yeah, absolutely. So I mean, we in fact would look at VMFS and it cringed it like wow, what have they built in the last 10 years? It doesn't scale, it's built for block, it's not. So finally, NFS was actually one of the saviors of VMware. NetApp worked with VMware very closely and in fact it enabled virtualization to become simple again. Right, because they were very block based bias. Absolutely, and it was a study reservations, a lot of arcane technologies of block. It was good for EMC for a while though. It was, I think it drove a lot of business, but in fact it's better for EMC now because VMware at the stock price has done even better because it's simpler to use and simpler to manage and stuff like that. So we're big fans of you guys, but when we like the content you have as an executive, you're awesome, you've got a world class company, you're building, so that's fantastic. But for the folks out there who haven't been following Nutanix or aren't inside the ropes or inside baseballs, they say, why are you guys doing so well? Explain to the folks out there why you're such a hot company. One thing is obviously the product market fit. From day one, we made a bold call. Sometimes bold calls can basically go down like there's no tomorrow. And for us, it was the other way around where every year there was more validation. It started out with our conviction of collapsing computing storage. 2011, it was about Fusion I.O. 2012 is about software-defined storage. So everything is actually falling into place from the point of view of the demand from the market. And you couldn't have asked for better. We never had to pivot. If anything, the story has only sounded better and better every day. Like, wow, you guys are doing this. 10 gigabit networks is in vogue and it's about software-defined 10 gigabit networks. All that stuff is actually pointing towards what we actually do. So really the product and the team solid, right? But the other thing is about the culture. And I think I want to say something. It sounds very cliched, talk about culture. But Mohit and I, my CTO co-founding partner and I are extremely grounded. We are paranoid. We understand the value of the big seven guys and know that they're private wealth managers and there's no point actually really competing with them. But we can roll up our sleeves and do everything and anything. I think in the first year, I wrote a lot of code to actually get this company off the ground now. A lot of that code is not perhaps used because they have gone and made it better. But I... That's good though, in a way. Pies up on the back but then you just say, hey, that's a good thing. Yeah, but you know, the two of us widely spend the money. We have come this far in a little over $20 million in three years as opposed to spending six years and $50 million. So everybody is fresh. They all believe that we can build a very large company from here. Most employees are less than a year old. The investors are less than a year old except for light speed. So there's a lot of belief. How many employees you have now? A hundred, 12, a hundred, 13. It's going to go to about 200 in the next six to nine months. So you're expanding your hiring. Okay, get that plug in there. We're getting the break sign. But I wanted you to just end out on the following, answer the following question. Every company has a unique culture DNA. It's Moore's Law for Intel. It could be sales for another company, customer service for another. What's the one thing about your culture that you and your co-founder can point to and say, hey, you know, at Nutanix, we're fanatic about blank, fill in the blank. What is that culture feature? I would say two things. If you were to give me luxury of saying two things. Yes, sure. One is quick decisions. So Moet and I are tied at the hip and we don't let things faster for too long. And secondly, respect for every individual in the company. Like, you know, the support guys are just as important as the sales guys are close deals. And, you know, we reached a very big milestone just about a week ago in terms of bookings. You know, our support guys cut the cake because had it not been for them, it would not have actually gone that far. So it's the respect for every individual that actually comes. All right, cool. Dheeraj Pundey from Nutanix, CEO, co-founder, great culture, great entrepreneur. We'd love having you on the queue because, you know, you're one of us. You've been around the block and seen a few cycles and have great commentary. So when you sell the company or you go public or retire, you're the opening on the cube anytime. Thank you. Okay, we'll be right back with SiliconANGLE TV, our next guest.