 Live from Vienna, Austria, it's theCUBE. Covering .next Europe 2016, brought to you by Nutanix. Here's your hoes, Stu Miniman. Welcome back to theCUBE, the worldwide leader in enterprise technology coverage. Happy to welcome back to the program. Multi-time guest, the CEO of Nutanix, D. Raj Pandey. Thanks so much for joining us. And thank you for bringing us to Vienna here. Over 1,300 people here, you know, obviously from a lot of different countries, you know, general excitement in the air to tell us where your mind's at. Well, I mean, you know, we've always been a global company for the last couple of years. We've had about 35% of our business come from outside the U.S. So bringing the event to Europe was actually a big deal for us. And we said, let's just go and be a company that's global, but acting locally as well. So I'm just exhilarated just to see the response and the love that customers actually have and hopefully the hope that prospects have for this company. Okay, can you speak a little bit to kind of both your company and how you partner, how do you reach that global audience and especially in Europe? So we have employees in 40 countries, but we ship to 90 countries already. And a lot of that is happening because of the channel and the distribution strategy that we actually have. Obviously the OEMs are doing some of this as well. So Dell is doing it, Lenovo is doing it, and our reseller partners do it as well. So I think a combination of distribution through OEMs and distribution in reseller relationships with the bars is helping us a lot. All right, so, you know, you talked about in the keynote this morning, you know, the IPO went, you know, there's a lot of changes. Everybody's watching, you know, all the pieces, you know, happening with Nutanix. And when I talked to Sunil this morning, it was kind of, you know, wrapping up Phase 1 or, you know, there's still plenty of work to do in Phase 1, obviously, with Hyperconverge. But going to Phase 2, I spoke with you a few weeks back to talk about kind of the post-IPO, but just kind of the state of the company, maturation of the company, what's your take on where we are and where we're going? Well, the next six to eight quarters, you know, heads down, execution, both on R&D side as well as sales and marketing side, you know, in some level, obviously the public market investor is going to expect a lot from us in the next two years. And we also have to basically establish our identity, because, you know, obviously, when you do this kind of an operating system work, it's very hard to put you in a category, you know, are you a compute company, a storage company, a hypervisor company, or are you getting networking? What does that mean? So, in that sense, we have a lot of hard work ahead in terms of defining our overall category. And Hyperconverge, to me, is basically a very inane word. I mean, it means nothing really. I mean, to say that we can go and solve real problems for people, do it faster, quicker than anybody else, and reduce the OPEX is probably where the real delight lies. So, you know, looking at, you know, we've co-designed this Wall Street Journal ad to the rest of the team. And there's obviously VMware, there's Amazon, where do we fit in? And it's a pretty wide gap that we need to go and define. Yeah, absolutely. I mean, we've talked about it a few times, but the first time we interviewed you, I think it was over four years ago now, it was talked about, you know, the computer science issue of our day is talking about distributed architectures. And that's not a convert or even hyperconvert issue. It's a much bigger, you know, kind of, bigger problem. And that's at the core, the core of your engineering team, the core of, you know, your background. And so, is that, are you just a software company at the end of the day, or, you know, what is Nutanix when it's fully grown up? I think you rightly mentioned distributed systems part of it. Because many of these hyperconverged solutions, they're using mostly VMware, and then replacing a bit of it and adding their own little color to it. And then we are saying we need to redefine the control plane and redefine the data plane, you know, redefine the abstractions of drag and drop from one stack to another. So there's a lot of work that's going on which uses commodity servers and distributed computing methodologies to go and build these solutions, actually, on top. I mean, today, as you saw from the keynote, looks like it's echoing a little bit. From the keynote that customers are actually looking for solutions that actually work at scale, and working at scale would require to really go and use the power of multiple machines and still be able to deliver the facade of a single system. So, at the core, this company is really a software company, but we are also very mindful of how not to throw software over the wall. Because that's what a lot of software companies would try to optimize for the Wall Street model as opposed to optimizing for the customer model where Wall Street model will actually take care of itself. So it sounds more like the discussions I have when I talk to the hyper scale companies. It's the Googles and Amazon's the world. That's the mindset that they have as opposed to, you know, I'm an infrastructure guy by background, but that's kind of the traditional enterprise and, you know, hardware-centric view of things. Yeah, you're always trying to classify a company as a software company or a hardware company or an appliance company or some other company. But what does Main Street want? Not what Wall Street wants, but what Main Street wants is abstract it out, make it invisible, make it simple, and it doesn't matter how, because we don't ask this question to a cloud company. Like, hey, are you a hardware company or a software company? It doesn't matter. At the end of the day, we're delivering solutions that make our customers' lives easier. So the IPO, the timing of that was something you needed to sort out. We're in uncertain times in the global economic markets. How does that impact, you know, how you run the company and how the company moves forward? Well, so definitely a few things have happened in the last two, three years, and not just in the US, but with Brexit, a pretty close Austrian elections and what probably we'll see with local elections in Germany and other such places. People are questioning, okay, we talked about globalization and it actually has an impact on, you know, flow of people and trade and goods and all this stuff across the world. But what about me? You know, what about my job and my standard of living and things like that? So it definitely brings to focus that localization of globalization. You know, and we say this all the time, it's also a cliched thing to say that you think global, but act local. And a little bit of that is showing up in terms of the rebellion from people saying this globalization thing is not localized and it's not empathetic to who I am and what my job is and so on. So you'll see countries actually hunker down a little bit. You know, in trying to say, look, we overdid globalization. We need to start thinking about our own people as well. And just like, you know, it happened with farming, you know, like a lot of people are saying farmers market and local produce and things like that. Some of that will happen with consumer goods and even technology at a certain extent. The idea of cloud computing will also get a nuance in this because there are 150 countries and I talked about this in my presentation as well that at the end of the day, if it's like power, if it's like water, if it's like gas, if it's utility, you just can't have only 100 data centers or 200 data centers around the world. You have thousands and tens of thousands of data centers around the world because the SLAs are actually quite complex. You know, there's not just five nines availability, it's security, compliance, data safe harbor, you know, on and on and on. So this idea of seeding the cloud at a smaller local level to me actually becomes even more relevant in this new world and it transcends beyond the US elections. It's just across the board. I think people don't realize that there is a very complex pulse of computing, notwithstanding all this stuff about who owns the data, who owns the rights to the information and the application and things like that. It just makes up for the case of how cloud companies will have to miniaturize their operating system. Like Azure is talking about an appliance. There's rumors of, you know, Amazon talking about an appliance and so on. So everybody will have to coexist in an appliance world in two racks as well as in 2,000 racks. So have you built an operating system that also works in two racks versus just 20,000 racks itself? We talked a little bit this morning with Sunil about in 2017, Microsoft's expected to ship Azure Stack and we will see the VMware on Amazon solution and I'll be at Amazon re-invent later this month. We'll see how many straws does Amazon stick in the data centers and are there some appliances that end up getting there to being there? You know, different set of competitors than the traditional, you know, Hewlett Packard Enterprise, IBM, Oracle who, you know, you partner with but there. Look, you mean today the hyper-converged vendors, they say that they compete with Nutanix but they all need the entire stack. Cisco and HP and a lot of these companies then to the day are hardware companies and they go and take an entire VMware stack and then replace a bit of the storage component and put their own little thing but they still need the hyper-visor, the container stack, the, you know, operations management stack, the systems management and all that stuff around it. Software defined networking, security, things like that. I mean at some level we're building an operating system and if anything we are a little bit of a lesser operating system because we think that we have to also make it a little non-nerdy, non-geeky, you know, thinking about credit cards and subscription and spot pricing and App Store. You know, those metaphors of e-commerce have to meld into the operating system definition itself so that it's not just about compute and storage and virtualization, it's a very bottom-up view of technology as opposed to thinking top-down about the end-user, the developer, the app administrator, folks who actually don't care what a hyper-visor is and what fiber-channel is and what ICE-CSI is and what NFS and so on. Yeah, it's interesting. The question I was thinking of is the old Maxim, if Henry Ford said if we had asked our customers what they wanted, they wanted better buggy whips and faster horses and the like, if I go to an enterprise IT yes they want simpler environments, obviously that's pretty easy but a micro-segmentation on the security and the networking, I mean I look at the areas that you guys are adding to, what is the driver, what's kind of the true north of the company to kind of set as to where your direction is versus how much are you getting the feedback from the customers? I think as Rajiv said, when the customer is asked for it it should be there, not the even 6, 12 or 18 months delivery cycle once they ask for something. Well, one thing is that we have to think about the end-user. The consumer of infrastructure is not the infrastructure admin. The consumer is a developer. The consumer is an app administrator and they're thinking about apps. They're not thinking about VLANs and load balancer rules and firewall rules or a VM or a container. They're thinking about the whole thing and that's the blueprint. They want to clone and provision and migrate and back up and do all sorts of verbs on this one noun and the noun is not these disparate components of a fiber channel zone and a VLAN and a load balancing switch or a rule and so on and so forth. So when you bring it all together into an application specification now it becomes really interesting because now when you provision an app the firewall should get pre-programmed automatically the load balancer should be pre-programmed the network should get programmed. So the real true north for Nutanix is what would an app need and how would the app user think about using these different elements which is networking or security and storage and compute and things like that. And in that sense all we're trying to do is to make infrastructure more consumable not by folks who are specialists in their own little area who get a ticket and they actually go and work on the ticket and it takes weeks of round trip to get the ticket resolved for the entire app to be provisioned but instead how do you automate the heck out of it such that you don't even need to file a ticket and assume these things unbeknownst to what these things really do and how do they get implemented. How much does your team need to get into the weeds of the application? I heard announcements about SAP in Oracle, Citrix up on stage or how much of it is the kind of puppet chef those kind of things where I can identify a workload and then just use you as a platform. Well so the automation APIs definitely belong to us because we actually talk about what are the things we want to actually make configurable and programmable which is what the APIs do and then top the APIs you definitely can use any kind of plugin framework, Python binding Ruby binding and use your favorite configuration management system it could be a puppet for example and maybe that CMDB belongs in service now or maybe it belongs in puppet or what have you and they can be the Uber orchestrators and the Uber configuration managers but then we want to at least do a good job of not being a heterogeneous orchestrator or heterogeneous configuration database but just for our own little ecosystem can we manage the best configuration management configuration and can we be the best orchestrator actually so that then the Uber orchestrators can work on top of us and automate Nutanix and something else along with it maybe there's Nutanix, AHV and VMware maybe it's some Cisco blades and Nutanix together because eventually people looking at something that's Uber orchestrator as opposed just a Nutanix specific domain at the at the biggest show talked about the the Newton nation as you're now a public company we're talking off camera a little bit about you know companies that need to be careful about going from the insurgent to the incumbent does how you hire, how you train people as you grow does that change, it's got to be tough to still get we said getting that first hundred people in the valley is easy getting your next thousand and keeping that high quality is really tough how's the culture changes you get larger well you know we have to keep evolving with scale because obviously the intent is the same the intent is to be a politics free insurgent mentality company that has you know owners as opposed to employees work for and then finally the obsession for the end customer the front line is equally important so that is the intent whether with a hundred people or five hundred people a thousand people how you get to that intent is what changes because at scale you need to go and really make the grass root fabric become kind of shock proof and scale proof and stuff like that so that problem definitely is becoming harder in that sense and as you said there's this paradox of growth where growth creates complexity and complexity kills growth and I think one of the challenges that the company faces is how do you buck the trend of being yet another company that probably reached its whatever billion dollar revenue and then it completely petered away what are the ways in which you can continue to grow the serviceable time what are the ways in which you can keep the same net promoter score because customer support and customer satisfaction at scale is a very hard problem very difficult problem actually so having that culture that mentality of you know end customers matter employee manager relationships matter and eventually everybody is a customer you know we say this all the time I say this that HR's customers are every employee in the company so if you have a net promoter score mentality whether it's internal employees or external customers or partners I think good things can happen speaking the mature to the company another thing you talked about in the keynote was the Nutanix Health Nutanix Heart initiative that you have maybe explain a little bit about that and you know what what are the causes that you know get you excited personally well I think as a company matures and as we have a little bit more self-actualizing oxygen you know we need to think about not just the business and the gross margin and strength of the P&L and the balance sheet and things like that it's like what is really good business and I think really good business is if you also get connected to the society the community at large and .heart actually makes us a more robust company because can you just explain what the program is exactly so it's basically a true north for the company to say look you try to have a culture of humility and hunger and honesty but how about giving as well what does giving mean to us what does giving mean for individual employees what does volunteer time off look like so that employees can really go and do things for their own what does it mean for the company to contribute to causes not the least of which is how do you think of diversity how do you think of women in tech how do you think of women in our own company we probably haven't done the best of jobs to actually hire women at scale or even have leaders I mean like for example my reports none of them are women so I have to do a better job of that we have to do a better job of the company where women can look up to leaders in the company and say I want to be that actually so in that sense we feel very vulnerable and we have to get better of those things and a program like this also reminds us to say before we go and try to do this thing better for the society and the local schools and things like that can we do better for ourselves as well and that overall creates a very robust very diverse gene pool that the company can withstand shocks and have employees who are not just loyal but willing to question basically go back to this bucking the trend of complexity and the complexity that comes with the growth itself in part of that my understanding is you're reaching out to local communities to get things that are involved Silicon Valley is always a discussion anything back home that you're making sure that the team focuses on when it comes to the community involved one of the things that we observe is why aren't there enough women in tech and people always point back to schools and colleges saying they're not enough women and girls graduating so we are focusing on what does it mean to hire more women from universities and how do you go back to local schools and see if you can actually go and teach people and not just people but girls in particular we are trying to associate ourselves with girls who code and so programs like that which go and try to fix the problem upstream as opposed to question why the problem exists in the industry itself I remember back I'm trying to think it was Miami at the first dot next conference you talked about your various constituents and hinted that you'd have the new one the financial services so final note could you just walk through your employees, your customers your partners and the financial what do you want them taking away from this event that you've had where Nutanix is and where they're going well for the employees, customers the fact that we are trying to get more empathy for them that's why localization matters that's why coming here matters that's why talking to because EMEA is a large world in itself Europe by itself is not homogeneous it's like tens of countries, there's Middle East there's Africa which is another continent by itself, there's Russia which looks like a continent by itself, a world by itself so to understand each of these countries and constituencies there's a lot of doing events like these actually so that's what this idea of let's get empathy for Germany and France and Portugal and Spain and every little country that we can think of is very important for us and I think for Wall Street I think it's going to take care of itself I really believe that if you did it right by our employees if you did it right by our customers and partners then in the long run the stock market is extremely fair extremely fair in the short run nobody controls because the mob controls but in the long run a lot of goodness emerges if you as a company are have the right hygiene have the right guardrails avoid waste you know a lot of stuff is about wastage when you grow big you try to do too many things you don't fail fast enough you don't cut things fast enough you end up becoming a soft company I talk about soft word soft is equally important to us now at scale because you have soft products that don't sell you know that's waste you have soft talent that you're not trying to manage out you're making softer decisions in the interview process because you're trying to be a nice company and I think you just have a soft culture where you're not willing to stand up to the inequities and the inefficiencies that actually come to exist so in all little ways what wall street helps you do and continue to stay a tough company where you continue to make tough decisions and if you keep doing those things in a hygienic way then the share price takes care of itself actually Dear Raj it's always a pleasure to be able to talk with you really appreciate you having the queue be able to be here at the inaugural event and I agree the world could definitely use some more empathy as we go forward so thank you much for joining us we'll be back with lots more coverage here from the Nutanix first.next in Europe you're watching the queue