 Live from Washington D.C., it's theCUBE, covering .next conference brought to you by Nutanix. Good morning, everybody. In 2009, infrastructure professionals and the vendors who supplied products to them started to realize that the cloud was real and that they began to try to replicate that cloud on site and the first instantiation was what we called converged infrastructure. Converged infrastructure was essentially a combination of storage, server, and networking, kind of bolted on together, but pre-packaged, pre-tested, and engineered to be installed and delivered in a more seamless fashion to minimize the amount of labor that had to go into the management of infrastructure. That was around 2009 and that same year, Nutanix was born with a slightly different vision to actually develop a solution that was truly cloud-like on-prem. Welcome everybody to Nutanix.next 2017. This is theCUBE, the leader in live tech coverage. My name is Dave Vellante and I'm here with Stu Miniman from SiliconANGLE Wikibon, who is an expert on Nutanix on hyper-converged infrastructure, which was the next instantiation of converged infrastructure. And now, Stu, we see this going into the cloud era. This Nutanix is a company that's probably going to do close to a billion dollars this year, if not a billion. They got a two and a half billion dollar market cap. They got a gross margin model in the high 50s. They're growing at 65, 66% per year. The stock, when they did their IPO, was a meteoric rise, sort of flattened out since. It's up today on some news that was broken by CNBC that they're doing a deal with Google. This is our, let's see, fourth, third of fourth. Third year of the U.S. show, the fourth Nutanix Conference overall. Stu, great to be working with you. We've been together a lot this month at a number of shows. This is sort of the capstone of what we call true private cloud and a great instantiation, an example of it. What are your thoughts, early thoughts? And what to hear. So Dave, great to be with you as always. And yeah, excited to be here at this show. One of the things I love in our role as analysts is when you see something in some of the early stages. So I first got introduced to Nutanix when they were about 20 people. Little bit smaller than, say, when I first met VMware, when they were about 100 people. And to watch this company and this wave grow, I remember John Furrier and I interviewed Diraj, CEO of Nutanix, back at VMworld 2012. And right, infrastructure and converged infrastructure. I mean, I worked on some of the original, you know, VBlock architectures when I worked at EMC. And we're saying, take my storage, take my network, take my compute, put them together, package them, integrate them, try to make it simpler. But when we talked to Diraj, it wasn't about the infrastructure. He really posited that the challenge of our day is building distributed systems. And it's really a software challenge. And that is at the core of what Nutanix is IP, what their engineering mentality is. And they've kept that going forward. So, you know, we always talk about, you know, oh, okay, you know, in our infrastructure silos, Nutanix's vision from day one was to go beyond that. We talk about hybrid cloud or multi-cloud today. That's what Nutanix is starting to deliver in their vision when they first launched themselves as an enterprise cloud as their marketing. Everybody was like, what are you talking about? They're an HCI player. What's their cloud mission? Making an announcement with Google shows that they are going to have some partnerships there to live in that hybrid or multi-cloud world. And Dave, I want to clarify, when I, you know, we throw around these terms hybrid and multi, for me these days, I look at it as hybrid is a lot of what I know you used to call federated. So, how do I have a model that really looks the same, whether that's just the application layer or, you know, even going down to the infrastructure layer spreading between environments, typically my private cloud and my public cloud, service riders can be in the mix there. Multi-cloud means I've got data and I've got applications that are going to live in multiple public clouds in multiple data centers. Of course we've got SaaS. So that differentiates a little differently. Things like Kubernetes are really helping with that explosion and that discussion of multi-cloud, kind of replacing what we used to talk with PaaS, the platform as a service, where I could really be independent of the cloud. So, you know, there's a lot of nuance and detail which I'm looking forward to digging into over the next two days. It's nuance, but it's important nuance, because basically you're saying it's not just a bunch of hybrid, it's not just a bunch of clouds. It's some kind of, you know, federated. It's a data plane and a control plane that spans multiple physical locations. I worry about things like identity. I worry about things as to, you know, how does security span these environments? You know, governance of course plays in a lot, but you know, I'm sure we will hear things about consumption model, because one of the things cloud consumption model, you know, it used to be like, oh, well some business guy just swipes a credit card and goes and does it. Well, shouldn't all infrastructure be as easy to buy as we did? I mean, Dave, you remember a decade ago we always talked about the consumerization of IT. Now it's really that cloudification of IT with companies like Amazon really driving forth the model that everyone wants to copy. So since we've started researching Nutanix and talking to some of its customers, two years ago at the initial dot next conference at the Fontainebleau in Miami, really talked to a number of customers and you could see the enthusiasm for simplicity. You could see the desire to reduce their reliance on VMware and the VTACs that was hanging over their heads. And at that time, a couple of years ago, Nutanix introduced Acropolis, which is essentially a hypervisor inside of its, what they call now the cloud operating system. And so, but that is a strategic move by a company that's basically saying, hey, we're not just hyperconverged, because everybody's now pivoting to hyperconverged, we're cloud. So it's a message to the financial world, to the industry analysts and to the customers that we have a vision to the financial world, we have a large TAM. Financial guys are always worried about TAM expansion. That's their TAM expansion play. Now, bringing it back to some of their financials just briefly, Nutanix essentially loses 37 cents from an operating basis on every dollar of revenue it makes. Okay, that's, I guess, in vogue these days. But it's funny accounting, because they don't recognize the full value of their OEM deals like the Dell deal. Again, some nuance. And there are some accounting changes that are occurring, which should be a tailwind for this company from just from the optics of the income statement. So you're going to see, and I think the streets finally starting to understand this. Again, stocks up today on the Google news that no press release yet, but CNBC broke that news. What do we know about that? Yeah, so first of all, right, the accounting change is coming this summer. If I remember right, I believe it's August. So that means that rather than taking the three year subscription and only taking a small piece of that today and pushing most of it out into the future, there will be a restatement of all of Nutanix's number, which right, will be a tailwind, as you said, and push all that in. Google, number one is you look at, one of the most interesting dynamics of Nutanix is it's been in a relationship with VMware. I did an interview with Thiraj right after the IPO. I was at the headquarters sitting with him in this beautiful library that they have there. And he turns to me and he's like, I'm Cameron, he says, Stu, if VMware hadn't been so negative on us and not allowing us to OEM or ship their product, I don't know if we would have launched our own hypervisor. It was not an initial plan. It was something that he's talked to the analyst community and talked and said, this is something that was not simple. It was not something that was done lightly. It was something that their hand was really forced because customers say, I want this simplicity. I want to be able to just stand it up. I need that to come pre-installed. And there was additional value that Nutanix felt they could bring. The DNA that they had, as they said, from companies like Facebook, from Google, and the like, where they understand the underlying code that they need to build to be able to build this distributed architecture. So building off of KVM, they built the Acropolis hypervisor. One of the next big shifts coming is containerization. And this is where Google fits in. They should be able to accelerate that move, which is the thing I worried about with hyperconverge is we took our virtualized sand environments and we just put them in a slightly different form factor. It's simpler, yes. It's great. It's going to be, you know, hopefully a better economic environment, but how do we move the company forward faster? Two years ago, the customers were really excited because they said, I got my weekends back. What you want from an IT department is not to say, I'm no longer just overworked, but I'm driving the business forward. Dave, you've always said the role of the CIO is not just to maintain the business, but to transform and grow the business. So that's where we need things like containerization to help companies be more agile and move faster and have IT turn into a force that can help code, create new business lines, leverage our data more. The thing that we've heard at every storage show we've been at recently, Dave, is, you know, NetApp actually says, storing is boring and that is something that we hear is I need to leverage our data, we need to get it out there and that's what I'm looking for this week is to hear more of that cloud native piece. I was at the Cloud Foundry Summit a couple of weeks ago. I could sit that on top of Nutanix. So how does partnerships like Google and some of these environments help with, you know, application modernization, you know, analytics where I can get new, you know, take my data and create new business value because that's where we're going to really transform and grow companies into new revenue streams and Nutanix is a platform to help deliver on that. So Stu, since the spring when we released our latest True Private Cloud report, the Wikibon team, there's been a lot of talk about that report, its implications. We had, there was a blog post today from your own Haviv at Iguazio saying you guys need to rethink your definition of True Private Cloud because the on-prem guys have no chance against the cloud guys, we don't agree with that by the way. But the notion of True Private Cloud is this on-prem infrastructure that substantially mimics the public cloud and as I said before, has a control plane that spans multiple physical locations. That's a concept that we've got to put forth and started to quantify because there was so much cloudwashing going on and it really is frankly the savior of the existing infrastructure guys or could be because their legacy business is not growing, in fact it's declining and this is a very high growth market opportunity for these folks. So my question to you is can Nutanix participate in that high growth market? You know there seems to be an aspiration, maybe I'm overstating this, but to be the next VMware of sorts. Can they do it? Exactly and Dave you're not overstating it, I've heard people from Nutanix say that was their target, their target wasn't to replace a flex pod. Their overall vision was right to be the next VMware, they want to be a platform to be able to grow on that and the thing I've been looking at at every show when we go to infrastructures, how do you live in that multi-cloud world because you can't put blinders on and say, right well, Amazon's in a corner. No, we know Amazon, customers are using them. So, you know, right as you said Dave, I want that operational model in my own environment to build what we called a true private cloud. Absolutely Nutanix is a player there. There's still work to be done for all of these infrastructure players, but what are they doing? How does their control plane span beyond that and why should Nutanix be more than just a piece of the infrastructure? Because there are lots and lots of players, not only the infrastructure players, lots of software companies and the cloud companies themselves that are going to say, I'm going to own that piece. I mean, Microsoft identity is one of their greatest strengths. Google and Amazon have been going after that. I mean, Amazon's eating everything, Dave. So why should Nutanix not just eat some of the old guys but be a player that lasts into the new world is, you know, looking forward to the announcements later tonight. We've got a lot of their partners and customers on here to be able to deliver proof points and Nutanix is still growing, still doing real well and, you know, to be excited. Yeah, so we're going to be covering this wall-to-wall coverage of two days. We've got some great outside guests coming in. We've got Diane Greens, you know, speaking at this event. Bill McDermott speaking at the event. The word is Peter McKay from Veeam who's going to make another appearance. He's like theCUBE, he's everywhere. And then some really interesting outside speakers. Melotra is here again. So really excellent lineup that we have for you guys this week. Two days, wall-to-wall coverage. This is theCUBE. We'll be back from the district, live in Washington, D.C. This is Nutanix.next, right back.