 Live from Copenhagen, Denmark. It's theCUBE. Covering Nutanix.NEXT 2019. Brought to you by Nutanix. Welcome back everyone to theCUBE's live coverage of Nutanix.NEXT. We are here in Copenhagen. I'm your host Rebecca Knight co-hosting alongside Stu Miniman. We are joined by Dheeraj Pandey. He is the CEO and founder of Nutanix. Thank you so much for returning to our program. You're a CUBE alum. It's my pleasure. Thank you. I want to talk to you about what we're here to do is celebrate 10 years of Nutanix. Ben Gibson when he was up there on the main stage he's the head of marketing. He was talking about watching you backstage saying that I saw in him a lot of pride and emotion because this is really your baby. He started 10 years ago. There's been a lot of nostalgia bringing up some of your first employees. There's even a picture of you poised with a ping pong ball ready to play a little mirror pong back in the early days. So talk a little bit about what this means to you to be here 10 years after you founded this company. Yeah, first of all, thank you so much for the opportunity to come here. And it looks like an era. 10 years is an era. We've built a family of customers and employees and partners and yet it feels like we haven't achieved a thing. So to me the more I make it look like it's 2010 back again we can go back to being like a startup again and growing from here because growth is a very relative term. It's a mindset thing. And I think the new day and age of multi-cloud and what we have to do to virtualize all these different silos that have emerged and to virtualize, simplify and integrate. Virtualize, simplify, integrate clouds is going to be a journey of a lifetime actually. Yeah, dear Rich, I think back to some of our earliest discussions. You would bring us in and talking about that the challenge of our era is building software for the distributed architecture that we need. And that was as relevant in 2010 or 2012 as it is here in 2019. HCI helped simplify that deployment of virtualization. We are definitely a point that we need to simplify cloud. Cloud is here, it's growing, the hybrid pieces are there. So maybe bring us inside, kind of what's the same about the journey and some of it is making one click upgrades in today's environment is way more complex than it would have been back when it was just an appliance. Yeah, yeah, absolutely. And I think about the whole concept of hyper-convergence initially started out as converging compute with storage, how to keep them close together because machines need locality, applications need local data because the network is a real enemy. And the same was true of human performance, like lots of teams, lots of bureaucracy, very little autonomy. So when you brought data close to applications, application people became autonomous. They could do things on their own. And that was the power of hyper-convergence. You were able to provide performance to data and machines and you were able to provide performance to people because they became autonomous. I think that is not changing even in the hyperscalar data center environment and I think the fact that you have to hop multiple switches to get to data, I think it's recreating the same problems that we started out this company with almost 10 years ago. In fact, if anything, the hyperscalar networks are worse than the networks that private clouds actually had or even on-prem data centers had. So keeping data close to applications is relevant and it's fashionable one more time. And the fact that you can provide that autonomy to application folks to go launch their apps in the public cloud through this new architecture, using the bare-metal service offerings to the public cloud where the bare-metal offerings look like an HP server or Dell server to us, I think it recreates the same. So I think I'm a big proponent of the saying that says the more things change, the more they remain the same and they actually look very much the same as 10 years ago. So how do you think that you're describing the technological changes that have taken place, but really we're sort of back to where we started from, but how would you describe the ways, the differences in the ways that people work together, talking about the human beings who are actually using this technology? Well, for one, this notion of converging teams and people is similar to the notion of converging machines, hardware to pure software. I think whatever happened in our personal lives with the iPhone and the Android OS, it's exactly what hyperconvergence did, is we had all these gadgets and they were special purpose, single purpose gadgets. And we made them as apps and they were all together in this one sort of device, and then the device connected to cloud services. I think that's what happened in enterprise computing as well. Compute storage, networking, security, everything coming together is pure software, running as apps. And I think that has created the notion of generalists in IT as well. Because as IT matures, you can't have so many specialists. And just like in healthcare, you can't have so many specialist doctors when you need a ton of primary care physicians and generalist practitioners after you. And that's what IT is going through as well. And so that's changing the skills that are in demand too from employers because you are looking for people who are sort of a mile wide and inch deep. Yeah, and in fact, the inch deep is actually not a pejorative. I would say that it's a good thing because with automation and a lot of layering of software, you don't need to get deeper into the details, the weeds, especially if infrastructure computing, because what's our mission is to really elevate IT to go figure out things that really matter to the business. Which is applications and services, as opposed to going and stitching together stuff that really can be done with pure software. And standardization, you know, the level of standardization that operating models can bring with commodity servers and pure software. So let people go and do things that really are more relevant in this age actually. Yeah, I was wondering, the close of the keynote, there was discussion of the tech preview of Xi clusters. You and I have spoken a little bit off-camera about this, but there is a lot of interest out there, everything when Azure first announced Azure Stack, it got everyone excited. To be honest, Rebecca and I were at the Microsoft, one of the Microsoft shows last year, and most of the attendees weren't really talking about it. So it's that kind of the buzz versus the reality of what customers are actually using. Where do you see, where are we with kind of that hybrid discussion? And why is Nutanix taking a slightly different approach than some of the others out there? Yeah, I mean, you know, this hybrid cloud is another word for hyper-converged clouds. And whatever HCI was in 2010 is what hybrid is today. So imagine 10 years from 2010, we are still talking about HCI, especially in the large enterprises, they won't barely begun to say, look, private cloud equals HCI. I think that's been a sort of an epiphany moment for most of the CIOs of the global 2000 companies. Just in the last three years, we've been talking about it for 10 years now. So there's a bell curve of technology adoption. We are in the very early stages of what hyper-converged clouds will mean or what hybrid clouds should mean. I think doing it right is important because the market is large, the ability to really move applications and infrastructure. I call them apps now. The hypervisor is now an app because it can run in the Amazon platform. It can run in the Azure platform. And that platform that they provided, billing, identity, recommendations and things of that nature. So on top of that platform, how do you go and put your app in the catalog? I think that's the overall sort of metaphor that I use. So in that sense, I don't look at the platform as a zero-sum game for us. We just have to look at it as a platform where our apps can actually go and run. Yeah, Teerich, how does a company, you've grown quite a bit, but if you look at the overall market, you're still a small player compared to a Microsoft, a Cisco, or a Google out there. So we definitely think you have that opportunity to help simplify that cloud, hyper-converged cloud experience, as you've said. But how does the Nutanix get there? Yeah, I think, and I say this to people who followed virtualization, the history of virtualization. When VMR was building virtualization, server market was $55 billion. Storage was $30 billion. Networking was $25 billion. Another $110 billion market. When they meant to $4 billion, they just had to think about what does it mean to put a layer of software on top of all this stuff so people can drag and drop experience from one server to another, from one storage array to another, and so on. So there's enough value to add on top of that $110 billion with their own $4 billion. In 2012, they were a $4 billion company, actually. Right now, we are thinking about, okay, these things are the new platform, where is the value in going and virtualizing, simplifying, and integrating them all with a layer of software that becomes the new integration software for all things multi-cloud? Yeah, so it's interesting. I want to connect the dots with that to, Nutanix has been going through its own transformation, and you've talked publicly a lot about, you sit on the board of Adobe that move from software to subscription is challenging. What I want to understand is, what does that end result of being a subscription model? What does that mean for your customers, and how they can change that relationship? Yeah, I talked about this in my keynote as well, the why of subscription. I think the very fact that we have decoupled the entitlement from hardware was the first change for us, the fact that software can live anywhere. And on top of that, what subscription delivers is this notion of residual value, where you can say, look, if I have unused products and unused terms on some of these products, can I use them for other things, actually? So it provides a very agile procurement framework that is very new to the world of infrastructure, actually. We've had a ton of shelf-wear infrastructure in general, and on-prem software in general, even in the public cloud, there's a lot of shelf-wear. I think the ability to really go and repurpose stuff for new things that you want to buy provides a lot of optionality to our customers. Subscription also is about bite-sizing things, so you don't have to buy big things and delivering it in real time. So I think you will see more and more of consumption model change towards subscription in the coming years. In talking about the value of Nutanix in this multi-cloud world, and you're talking about how customers really want that optionality, we're here in Copenhagen, how would you say the US customers are different from the European customers in terms of what they're looking for? Or are they different? You know, they're very similar, because there's a ton of global companies out there who have local offices and such, and so the global 2000 has tentacles everywhere. I think in some ways where they do differ is when it comes to the partner community and the channel and the system integrators, they're actually more influential here in Europe and Asia-Pacific than in the US, because most of the talent in the US goes and works for companies like us, and most of the talent in Europe and Asia-Pacific, they work for the channel and the system integrators. So how we actually work with them and learn from them and educate them on the transformation, I think, is basically the only thing that's different. All right. Deerich, one of the feedback I got from customers is something that I hear at the Amazon show. I'm inundated with so much new stuff, you know, I can't keep up with it. I want you to explain a little bit kind of the portfolio and also if you can, just organizationally how you think of this, you know, when we hear, you know, Amazon does their two pizza teams and they scale is very different from a traditional software or infrastructure company, so. Yeah, I think it's a great point and one of my favorite sort of things to think about these days is, how do you not sell things but sell an experience? It's very, very important to differentiate the two because, you know, you can build a ton of things and then the question is, if you've left the integration as an exercise to the reader or to the customer and you're basically telling them, look, you can as well buy best to breed from other companies that integrated on your own. So the job of integration and to really sell in experiences has to be left shifted to companies like us and that's what we've been doing with our products. You know, we're really bringing them together. When you say all together now, it's also about our products, actually. It's the portfolio around data, making sure that we're really bringing them all together. They can leverage each other, one sits on top of the other, one tears to the other. They can share common policy, policy engines and things like that. I mean, what we're doing with security, for example, is bringing multi-cloud with the old world of micro segmentation, actually. There's a lot of integration that's going on. Yet, we want to provide each of these GMs autonomy because, you know, at some level, they're all looking for individual use cases and workflows and they're looking for mastery, which is like, how do I master what I do well with my customers? But then the purpose has to be more than their own, actually. Like, if you think about autonomy mastery purpose, you know, one of Dan Pink's philosophies of motivation. Our general managers, they're motivated if you give them AMP, you know, autonomy mastery purpose. But at the end of the day, the purpose is customer driven. It's not driven by products, it's driven by customers. It's driven by customers' experience rather than the general managers' things they're actually building for the customers. Yeah, just one follow-up. When I think about, you know, one of the challenges I hear inside customers and I thought we'd made more progress is still a lot of silos. I talked to customers that are like, well, you know, I've deployed Nutanix and I love it, but there's this group over here and they're doing something different and they're certified or they're starting to use it or, oh my God, this developer team spun something up and didn't pay any attention. So, you know, IT was supposed to get everything back under control and manage it and work with the business, but, you know, I feel like the customers haven't made a lot of progress on that journey in the last 10 years. What's your feedback from customers? And how are we doing? Yeah, it's very true. Look, I think what you just said is also about autonomy for the developers and autonomy for that other team and such. So you can't force fit everything into single-size, you know, this one-size-fits-all kind of philosophy. That's why there's a bell curve of adoption, you know, any technology. I mean, even today, if you think of the hyperscalers, you know, you might think that they have it all, they have 2% of the market, you know, and that's how big this market really is. So I think going back to understanding that each of these groups actually has skill sets that are different, they're used to doing things a certain way and unless you go and weave it with them, you know, what I tell people is, you've got to walk to where the customer is before you walk with them to where you want them to be actually. So walking to where the customer is is about going to the private cloud. You know, we could easily have said, look, let's banish all this, let's build everything as an off-prem cloud service 10 years ago, but you said the market is not there yet. Similarly, we said, we've got to build appliances because right now the white box market is not there yet for the enterprise, you know. Then when we came out of it, we said, look, the market is already there. Let's walk with them with pure software and now subscription. We did the same with the underlying virtualization software below Nutanix. We said, let's walk over to where the customer is. Let's run on top of VMware, if that's what it takes and then walk with them to where we want them to be, which is an invisible hypervisor and such. So I think we've got to keep doing this, you know, where let's remove the hubris from innovation and Silicon Valley. There's a lot of hubris about these things that we know it all. I think when you try to go and understand and have the empathy for the customer is when magical things happen. That's a fantastic note to end on. Dearage, thank you so much for coming back on theCUBE. It's always a pleasure talking to you. Thank you. I'm Rebecca Knight for Stu Miniman. Stay tuned for more from Nutanix.next.