 Live from Anaheim, California, it's theCUBE, covering Nutanix.next 2019, brought to you by Nutanix. Welcome back everyone to theCUBE's live coverage of Nutanix Next here in Anaheim, California. I'm your host, Rebecca Knight, along with my co-host, John Furrier. We are so excited to welcome back to the program Dheeraj Pandey, the co-founder, CEO, and chairman of Nutanix. Thank you so much for coming back on theCUBE. Thank you for pronouncing my name diligently. You are welcome. I would work on that. So Dheeraj, it was a poignant moment in the keynote when you got up there with many of the people who were sort of employee number one, two, and three, four at Nutanix. They are the builders, the dreamers, the visionaries, the innovators, the disruptors of this company. A company that you started. So I'd love you to just start out by reflecting a little bit on your journey and sort of how Nutanix has evolved. I mean, it's a poignant ten years. The moment itself is poignant and it brought a lot of nostalgia for just looking at the early folks and how we had to huddle together on the smallest of technical blips that we would find in our thesis because the thesis was very bold. It was like, hey, we can put a lot of hardware into your software. It's like the way Apple would say we'll get rid of the camera and make it into an app. Like what? We don't need for a camera anymore. So that's what we had to do with data center infrastructure. So those moments are memorable. They're etched in history and my memory. And every time we get a tough moment now, we actually invoke a lot of those tough moments from the past to say, look, the more things change, the more they remain the same. If you don't think about theCUBE as our 10th year as well, we've been following your journey as well. We actually have sound bites of the early interviews. And one of the things I was always impressed with you guys was you stayed the course. You didn't waver on what was fashionable at that time. HCI was an early category. You were misunderstood at the beginning and then the numbers started to show and you guys built a great business. But now you're 10 years old, you're public. All the numbers are out there. You got to go the next level. This is your challenge with the team. What's the focus? What's the strategy? What's the marching orders for the team now as you go past 10 years old? You got competitive pressure. There's marketplace. The numbers are there. It's a big piece of the pie there. Yeah, you know, I can go back to everything I just said in my last answer as well. The more things change, the more they remain the same. The friction hasn't changed. Five years ago, we were a much smaller brand. We didn't have a customer base. We didn't have money in the bank. And we still had to keep raising money to fund ourselves. Today, we are running this business, spending, you know, a billion dollars every year now. But it's a free cash flow neutral business. You know, we've told the street that we're going to keep running it like that. But just go back to the basics. The basics of this company are what made it come to here. The same basics. We'll need to take it from here to the next 10 years. 10 years is the new zero. I mean, I said, look, we've reset the clock. You know, and it's a very metaphorical thing to say, but it's the new zero for us, you know. So going back to the basics of the 3Ds I talked about data. We are great at data. And we'll continue to be amazing at data. Reliable, highly available, high-performance data management. We're great at design, you know, just making things simple. And we're really, really, really good at delivery. And when we suck at it, we go and improve and are very resilient at delivering things, you know. So whenever something falters within our customer success, customer service, the way we're delivering things is pure software and subscription. I think nobody can touch us in these 3Ds. As you guys have proven a great loyalty customer base is very loyal on the product. As you have to go multi-cloud, as the enterprise gets modernized, this is a big part of your current business. What are some of the things that you're looking at in terms of these new products? Because you don't want to open the door up for either a competitor or a misfire on you guys. You got to continue to provide product leadership. Well, the most important thing is honesty and vulnerability, the fact that these things are not awesome big products yet, but they're awesome nonetheless. So how do you really have the small wins? I go back in time to, look, it took 10 years, it took 10 years for Amazon Prime to become Prime Time. It took six years for YouTube to even start to figure out who YouTube is really going to be. And Google bought rightly, which was the company that became Google Docs. Five years, they didn't know what they were doing with those things. So what's really important for the new products is this long-term greed. The fact that you really have this 10-year view of a multi-product portfolio. The most important thing is how they gel well together, how they really integrate well together. Because if we don't integrate these products and we just throw it out as things, as opposed to an experience, customers are like, I can buy things from best of breed. So how do you really make these multi-products look like an experience? Is where the real Nutanix design value is actually showing? One of the things that you guys have a good customer reaction to is the simplicity and how you can integrate well and reduce all these manual tasks. Which is kind of big, people talk about automation and everything, but you guys have customers saying, I went from 24 racks to six. I now run everything with a push of a button. Not there yet with a one-click, but pretty close. That sounds like the multi-cloud game right now where it is kind of hodgepodge. No one's actually yet figured out how to bring it all together and orchestrate it. That's the money statement, John, you know. That's where the money is. Complexity is where we go in and really figure out how to really save money for our customers, make money for our partners, and make money for ourselves. And the partner side, HPE, big announcement you guys been part of, they're going to be coming on today. How's that going? Give us the update on HPE. You know, the energy levels are high, but there's a bell curve of people. You know, you can't have everybody really be an innovator and early adopter. We're looking for innovators and early adopters. Some great discussions happening with an HPE account manager, there are account managers, very large accounts, and the word of mouth has to basically play its powerful game actually. I want to ask you about innovation. Earlier on theCUBE conversation you talked with our own John Furrier and you said we disrupt ourselves. But you also just talked about these products being this sort of long-term play and really thinking about more of a holistic view of what the customers need. I want to hear about the Nutanix innovation process and sort of how you have kept that culture of a tech startup now that you are a company with a market cap and the multiple billions. You know, as I said before, we are like a billion dollar startup. And it's not easy because everybody wants you to grow up, like behave and grow up. You know, I saw one of my slides in there talking, taking real pot shots of the sand. We haven't changed much, you know. So in many ways, reminding everybody that still day zero and day one is the great cultural gravitas that we keep retained in the business actually, the company, you know, having the kind of humor that we had, you know, keeping it personal and personable with everybody as opposed to, you know, stiff upper lip and suits and mahogany tables and corner offices. Those are the things that are the antithesis of what Nutanix is. Just keeping it humble, you know, like the fact that even though we have layers of management in the middle, how do you go six levels deep and really have a conversation as technical as you want it to be and as business incisively as you want it to be? I mean, there's a lot of things you can do by going six levels deep that otherwise would not possible if you just said, look, I just talked to my next level actually. And to us, that's the engine of innovation. And how has your leadership changed? I don't think I have a new customer called Wall Street. They buy my product. It just happens to be a retail product that you folks can buy too. It's called NTNX, the ticker. So I have main street customers and then I have Wall Street as a customer. And I need to figure out a way to really keep them balanced because I sell products to both of them. And it's a journey, you know, it's never easy because the customer that actually wants instant success, there's another customer that says, I'm here with you for the long haul. And what I need to find in this Wall Street customer is the ones who are actually for the long haul. My leadership actually is about balancing the two together. Well, let's talk about the Wall Street thing for a second because I think that's interesting. You've always said to me, you're playing the long game and you do, we've kind of proved that. But Wall Street, they're very short-sighted, right? So the earnings come out, you got to deal with the shot clock as a public company. As you go to Wall Street, how are they looking at the long game? Because there's major examples, Microsoft stocks on an all-time high. They were in the 20s a few years ago. Cloud obviously is validated. So you've got a cloud vision, is cloud marketplace. You're in the core enterprise, which has been revitalized with private cloud. Again, proves your thesis originally. So you're in good position and you've got the cloud game right there. What are they missing? What's Wall Street missing? Well, I think the biggest thing is that any transformation is actually messy. Look at all the transformations in the last 20 years. The good thing is that those that took the tough call of transforming themselves, they really have done well. And this is not just Microsoft alone, but Adobe, where I sit on the board, there is Autodesk and there is Parametric, PTC and Cadence and many, many other companies that have gone through this transition of getting out of the box to being software and subscription, actually. And that's the journey that we said we couldn't punt and postpone because if you want to be a hybrid cloud company, how can we not have subscription on-prem? If subscription is going to be the off-prem, it has to have on-prem subscription as well. And I think it requires communication, constant communication, wash, rinse, repeat with Wall Street as well. Wall Street likes those valuations. If you look at the SaaS companies or subscription-based companies, their valuations are really on a multiple, much higher than- Yeah, I mean, look, valuation to me is not an end in itself. If you do it right by main street, I think this Wall Street thing will take care of itself. Awesome. On the long game with your innovation, I got to ask you about how you're going to look at the partnerships and integrating in because the competitor out there in the middle of the room there is VMware and Dell Technologies, they want to go end-to-end and they want to own everything end-to-end. You guys are taking a different approach. Could you share your competitive strategy in terms of how you guys are different than that because you're partnering, you're... Yeah, I think as you throw the becoming bigger company and yet having a real childlike brain, I think it's important to really know that we are in this cooperative world and every competitor is also a company we cooperate with. Look, I mean, we run on top of VMware and more than half our customers still use VMware underneath us. We are an app on their platform. So we are a platform company, we're also an app company and our platform should run all apps and our apps should run on all platforms and that's the way they look at it. That's the reason why Microsoft is relevant again because they still look at, rather than a single-stack strategy, how do you really look at yourselves as living two lives actually, you know? And to compete, you just have to go back to the 3D they talked about. If you just keep doing a really good job of data, disrupting the biggest hardware players out there in data and be really, really good with design and elegance and frictionless delivery, I think we'll be in good shape. One of the compliments that the analysts on theCUBE always pay to you, dearage, is that you have a really good sense of the wave. You really know which way the technological and economic winds are blowing. I want to know, what do you read? Who do you talk to? What signals are you paying attention to? Or is it just this innate sense that you have that the rest of us can't hope to ever achieve? Well, thank you for that compliment, first of all. I'm honored. But I just have this simple mantra which says the more things change, the more they remain the same. So I bring a lot of things for my consumer life because I read a lot about consumer life and I have a little bit of an artist in me and even though I'm supposed to be a geek, I was telling somebody who's trying to recruit the other day that look, I'm really at heart an artist, more so than an engineer. And I think a lot of what you see in this conference and this company and the product portfolio, it's really the empathy for the other side. That really brings out a lot of the innovation and I mean, obviously I don't innovate alone but the people that are with us in this company, I just try to tell them about the empathy that I invoke for everybody else and I read a lot in history. I'm a big history buff. I'm not just the last 30 years of IT which I invoke a lot, but I'm deep into like the history of humans. Like last two weeks I spent a lot of time reading about Neanderthals and the hybrid Neanderthals with humans, modern humans and there's another ones that they found in these caves of Genosova. They call Genosovans, you know. So I read a lot of history and that gives me a lot of perspective and a lot of courage and I bring a lot of those things into this new life. That's again, as I said, it's the same as the old one with some new color. You're an entrepreneur. That's what entrepreneurship is all about. What entrepreneurial thing are you working on right now? Because I've known you got to have your hands in some new things. Except the new entrepreneurial thinking or project that you're taking on. Well, the one that is a very interesting one for operating a business is capital allocation. And it's a difficult one because you have to basically be somebody who really balances content and delivery, you know. And content is products and deliveries go to market. Within go to market, it's marketing and sales. So as a company, we were tested in the last nine months to really understand capital allocation, you know. I'm a big fan of the book, The Outsiders. I just read this probably a year ago. And you could see that there was some themes in The Outsiders about running the business on free cash flow, which is nothing new. Like it's not like Amazon invented it. They've been doing it for those 40, 50 years. Second one is decentralized decision-making. The third one is a really good capital allocation. So as an entrepreneur, I'm learning to actually understand what it means to decentralize decision-making, you know, and do a really good job of capital allocation. And finally, go and tell the street about why free cash flow is the way to run a business as opposed to profitability in a gap because a lot of our dollars are sitting in the balance sheet. And they're not in the P and L. So I think really running the business where growth matters, which is about free cash flow about making sure that we can really create more CEOs in the company, independent decision-making. And finally, this idea that you want to run this business as if it's a bunch of businesses actually. Great. One of the things you keep talking about in this interview is balance. You're balancing the needs of Main Street and Wall Street, the needs of your cloud customers, the needs of your employees, while also growing this business. How do you balance it all as the CEO of this fast-growing company? You said you're an artist and you read a lot of history. Honestly, I'm not a very balanced person. If you ask me like work and life, family and work, it's because of my wife that I find a balance in. So we owe it all to her. Yeah, I think you can say that again. And the same thing is true for like, you know, one of my team members, our CEO, David Sanxtray, says, look, health, family and work in that order. And honestly, mine is in the reverse right now. So I need to really go in with these kind of conversations to remind myself that it's important to actually have some balance. Well, dearage, always a pleasure having you on theCUBE. Pleasure. I'm Rebecca Knight for John Furrier. We will have so much more from Nutanix Next coming up on theCUBE just after this.