 Live from the Austin Convention Center in Austin, Texas, it's theCUBE at Dell World 2014. Here are your hosts, Dave Vellante and Stu Miniman. Welcome back to Austin, Texas, everybody. Stu and I are really pleased to have Bob Wallace on as vice president in Nutanix. Nutanix is a company that we've been covering for some time at Wikibon and Silicon Angle and had on theCUBE many, many times. Bob, welcome to theCUBE, it's great to see you. Thank you, good to be here. So we were all really struck by the Dell-Nutanix deal. It was really interesting. We had Alan Atkinson on yesterday. He talked quite a bit about it as one of the catalysts for that deal. But let me start with Dell World. What do you think of Dell World? Is this your first time here? Yeah, it's actually, it is my first time here. It's great, we've been working with the Dell reps and teams for quite a while since we signed the OEM agreement. But this is the first real opportunity we've had to get in front of a lot of customers very close to launch. We're launching the product on Monday and sit down with customers and talk to them about it in depth. I have a lot of customers coming by the booth really digging into the XC series and a lot of Dell reps. So for us, it's been an ideal kind of venue to do the launch around. So, Stu, Alan talked yesterday about sort of how this deal came about. And one of the ways it came about, Bob, was that it hit the radar because Nutanix was so hot. It had so much momentum in the marketplace. Everybody was talking about it, for good reason, the architecture, the people, the customer proof points. I mean, all of that led to, hey, maybe we should be working with these guys. From your perspective, how did the deal sort of come about? I think it's kind of from what I understand, I was involved in the early parts of the deal, but our biz dev folks got a call from somebody on the product group at Dell who had really understands the storage market and was looking at what Nutanix had been doing and just started the conversation. I think it started out fairly informally. Dell and Nutanix throughout the subsequent agreements and negotiations and everything, we found there was a lot of synergy between the teams. The way that that team and the Dell team that we interacted with operate very kind of authentic group of folks. That's really how Nutanix culture is really very similar to that, where not a lot of big egos, but authentic, just trying to get things done. And so we moved really fast. I understand for Dell's pace and the way that they typically would execute on these agreements, the agreement with Nutanix happened in a matter of months very quickly. Wow, that's interesting. Well, of course Dell has some experience with large OEM deals and this is not quite as large as some of their previous ones, but the industry has matured somewhat, Stu, since then, so that's quite fascinating. Yeah, Bob, I want to talk to you a little bit about just kind of the changing model of IT. When I look at Nutanix, your founders of the company really came from some of the big companies, like it was Google and Facebook and a new way of doing IT. And if you look at what in the Google data centers, you're not going to find branded hardware. And when Nutanix first launched, as an analyst we kind of dig into the coverage like, oh, okay, wait, there's a super micro. And Nutanix actually tried out even Quanta for a little bit and then went back to super micro. One of the things Dave and I were talking about is if I'm Dell and we're seeing this growing, we're saying, hey, wait, we've got all these storage solutions that run on Dell platform. How can we have one that's growing so fast not use Dell hardware? So from that standpoint, I think they want to get involved. But can you talk about your customers? Most of them, it's not what server is inside the box. It's the new IT. So does adding Dell hardware change that message at all? How does that message come together? One of the key elements of web scale, which is really what Nutanix product does, is hyper-convergence. And so the hardware itself, the fact that the compute and storage and all the elements are in a single box, in a single appliance, is critical to web scale. And having the opportunity to work with Dell really makes that a big chunk of our value proposition when we do work with Dell, where before it was something that we, frankly, would downplay on the hardware side, now it becomes a strength. When our sales teams and Dell sales teams go out and they're selling the XC series, they can really take advantage of the fact that the Dell hardware brings real value to the table and the Dell support and pro services bring a lot of value to the table when we combine that with the Nutanix software and distributed file system. And my understanding is that it's a technology deal. Dell is going to be selling the product. You guys aren't selling the product to your channel. Dell didn't do business with you to get your channel. They got the massive channel, right? So you guys must have been excited about this. I mean, it's sort of serendipitous, opportunistic. You know, it happens because somebody took the initiative. Stuff like that happens, I guess, all the time, but interesting, Texas and the Valley getting together like that. Have you seen things like this in the past? I haven't personally. I think to me it wasn't a surprise because, again, our company culture, our leader, our CEO, D-Ridge, is very, there's a philosophy that we could always be doing something better. We could always, we're always looking for a way to improve how we do things and how we go to market. And he's very, Siddish, who's our VP of Worldwide Sales is the same where we're always looking for an opportunity to do what we do but do it better. And this gives us that opportunity. We have our existing business and then build on top of that this business with Dell that really gives us the opportunity to take advantage of their product. But as you said, also gives us the opportunity to tap into their sales force and their channels and open up a whole new area where Nutanix wouldn't have been able to touch for a long time. So Bob, what have you seen in the marketplace? Because one of the questions we often have, we get from practitioners is Dell's got one of everything. I mean, there's so much stuff. But as Joe Tucci's fond of saying, it's better to have overlap than just have gaps. But were you running into, who do you run into in the marketplace? I mean, you've got obviously the big guys, the big system vendors. Were you seeing Dell in the marketplace? Were you competing against them in some situations? Yeah, we did, yeah. I mean, they obviously, Dell's in a lot of places and their sales reps are out there talking to a lot of customers. So we did see Dell in a lot of the deals that we're working on and that we've closed in the past. We, I'd say we compete more with some of the other big legacy storage and compute vendors a little bit more than we have with Dell. That's rarely what we're seeing. The majority of our wins are displacing kind of legacy infrastructure with this, with a, you know, the web scale approach. It's a very different sale where we're talking to the customer about how the data center should look and what they expect to see in the data center in five years, as opposed to a, you know, what's the speed of this drive or adding flash into, as a band-aid into some kind of a storage system. So are they looking, but I mean all those guys, whether it's IBM, HP, you know, EMC slash VCE Cisco, they all have solutions that are converged that solve a problem that those legacy systems have, which is the labor intensity. Yep. Why are they jumping, you know, the checkerboard to Nutanix? I think the converged is a word that has in some, in some cases been overused. I mean, marketing people, you know, if they hear something they like and their customers respond to, they'll use it. A lot of the legacy systems aren't really converged. They're, that's why we use the term hyperconverged because realistically what they've done is they've skew converged products. They will sell you on a one skew, a whole bunch of products, but they all come separately and they have to come build them on site into one box or maybe they ship it on one box, but functionally that operates still is a bunch of separate units where Nutanix actually does true convergence. The compute, storage, flash, memory is all converged in one appliance and the other key piece is it needs to be software defined. So it's the software that does the, is the differentiator for Nutanix and bringing that all together. It's all software defined. So that's why the pairing of Nutanix and Dell is such a key thing because the hardware is a big part of it and then we have best-in-class hardware now with Dell overlaying best-in-class true converged software. So by implication you're driving more value. You're saying the other guy is essentially scratching the surface at the value proposition. You're taking it one step further. Yeah, I think. I'm going to put words in your mouth. That's what I'm inferring from what you said. It's not even that, I think. They're saying that it's converged in a way to fool customers to think that they're actually buying something that's different and what they're buying is just the same thing. They make it easier to order. They're not changing the way that anything happens. If we took that technology out five years, there is no true change that happens there. There's no innovation in that approach. So Stu, I know you're a fan. Well, that last part was quite interesting. Even Steve Mills himself said when IBM announced the integrated systems that there was evolutionary. You don't describe your technology, I presume, as evolutionary. Stu, you're a fan of Nutanix. You've been following this stuff for a long time. What's your take on all of that? So I think we talked about the channel and all the other pieces. The other thing we haven't talked about yet is really the primary use case or application that we're going to see deployed first is VDI. And Nutanix really had a lot of VDI deployments. And Dave, when we first started the queue back in 2010, Dell was one of the only companies that really came with us with customers that had deployed multi-thousand node VDI. I remember that at VMworld 2010. Yeah, it was a brown shoe company at VMworld. So Dell has, if we look at the VDI marketplace, one of the biggest challenges were, there's so many pieces. Not only the hypervisor and the agents and the client piece and all of those different solutions. And even Dell bought Wise, which brought them some of the client pieces, but they had strong relationships on the virtualization side. And they had really a practice to help customers through that. And when it really, I've gotten to spend some time talking to both the Dell team and the Nutanix team. Dell has a group called the CCC that works on this type of application. And we actually just published some new research from Wikibon looking at this solution and how, even if you take a white box solution, not saying taking kind of legacy stuff, but even if I took a white box solution and spun my own VDI deployment and compared that against a fully integrated stack from Dell and Nutanix, that there's just, it's going to cost you less over that three-year period to do that. So I guess, Bob, talk a little bit about kind of the VDI solution and beyond. Where do you see the use cases for the... Yeah, I think VDI specifically, we've seen a lot of success there, not that we're uniquely tailored toward VDI, but we found that VDI, because of the way that we can scale IOPS as you scale, and everything scales out, as opposed to scaling up where you're pushing it through a legacy infrastructure with two storage controllers. Because of that, I've seen that the world is littered with half-baked VDI deployments, where there's a lot of companies who do their first piece of the deployment. They'll deploy to 100 users and they'll see it works fine. And then as they try and scale, the infrastructure cannot keep up with scale of VDI because of the way that it scales. So we've had a lot of success there simply because there's many situations where customers are in this half-deployed mode and they don't want to back out of it and call it dead. And when you put Nutanix into that equation, we actually bring true scalability to the table. You deploy one node and it can handle 100 VDI users, then you know you're going to get 100 VDI users out of every single node you deploy so you can scale in here. Bob, it's so true. I go back to about, almost four years ago, we actually did a bunch of research. We actually had Jason Langoni, who's now on your federal team before he was with Nutanix talking and said there are two reasons why VDI deploy and fail. Number one is performance. Usually it was a problem. We really underestimated how much resources we need and Flash in many ways solved that. So every single company that has Flash in their solution, whether it's just Chubbinsum in an old array, an all-flash array, Fusion IO, everybody that's got Flash is saying, oh my God, people are coming at me to do VDI, but the second piece, when I go from pilot to production and really start scaling and adding users, do I keep that performance and can it grow? And that's where you guys really shine because I can just, adding a node is so simple. It's literally, I plug it in and I'm done. Yeah, two clicks, you're done and it scales and you know it's going to work and you have that predictability. So that's what customers want. I've found with VDI, they want to be able to scale it predictably and not have these huge cost cliffs that they run into because they need to deploy additional infrastructure to try and keep up with the performance requirements. It hits right at the heart of Nutanix's scalability. So Bob, two things I want you to tell us about the deal. Number one is my understanding that there's no ownership stake from the Dell standpoint and two, can you talk about the channel because there are some that look at Dell's history in the storage world and is Dell going to pull everything direct or are they going to be channel friendly, what have you seen so far? Yeah, so it's two very different questions. So yeah, on the ownership stake, this is an OEM agreement, it's not an acquisition, it's not anything else beyond that. It's really two companies who, you know, Dell recognizes Nutanix can be a really big piece in their software defined approach and some bold steps that I see Dell making to really redefine and define their own future and differentiate in a big way and take advantage of their privatization to do something really decisive and bold. So that's really, there's a lot of synergy there between the two of us. On the channel piece, Nutanix as a company has been channel friendly since we started. We've never sold direct. We only sell through channel partners. So when we first started talking with Dell about OEM, their ESG organization is really at this time, has a big push to embrace the channel and expand their channel footprint and how much their business goes through channel partners. So in those early discussions that we did have, that was a big piece of it is, how do we make sure that we can leverage that channel and the Nutanix cultural kind of channel friendliness we've seen a lot of benefit from that. And we have a good number of channel partners that have been existing Nutanix channel partners that are Dell channel partners. And up until now they might be able to choose one solution or the other. And now they have the opportunity to work through the Dell's channel program and get the best of both worlds. So how about the customers? Obviously you guys haven't shipped anything yet but what's been the response from customers and what do you guys expect from kind of a sales ramp? Yeah, so a lot of my time over the last five months has been spent training and helping the Dell field team understand our value proposition and integrate it into their own. Huge, up until now that we don't launch the product until Monday, we actually have already gotten a couple orders for the XC series. So it was pretty impressive the amount of really demand that there is within Dell's customer base for this kind of a solution. We've had overwhelming interest from Dell's field sales organization because I think they see that it gives them an opportunity to go in with something different and a new message and it really can open doors and accounts that maybe have been not open to them in the past but also Dell's existing accounts and customers it gives them the opportunity to bring something new to the table and really show up with an innovative kind of message that lives up to the Dell's is making some of these bold moves towards changing the landscape. Bob at VMworld this year, there was a lot of buzz of course about Evo Rail, we have D Rajan and you said what anybody would say in his position, it's validation. Yeah. Steve Herrod came on and sort of hit one right down in the middle, said validation and interesting discussions with customers. What have, since that announcement, of course Dell was a big part of that, what kind of discussions have gone on with customers and what do you tell them when they ask you about Evo Rail, where's it fit, how's it relate? We do, I think Evo Rail comes up a lot in discussions and I think from a sales perspective, I haven't really, I have struggled to find a successful implementation so that's usually my approach as somebody who's talking to my customers about technology is find some of them that are using it and say hey, tell me a little bit about how it works, how's it working for you? So at this point, to me, V-SAN Rail has been a competitor in discussion, the competitor on paper, the competitor in shows like this where it gets talked about a lot but frankly, I haven't seen a lot of actual, where the rubber meets the road, action out of kind of V-SAN Rail. I think there's a challenge that any vendor who's offering that product is going to run into in their sales organization and that they're essentially guaranteeing themselves three competitors who offer the exact same product for the most part, in any deal they go into, they go in and say okay, I'm going to put this in front of my customer, now you've got all these guys coming out of the can that offer the same thing from a software perspective and it's going to be a race to who can discount the most. So you need more data before you can really comment on that, yeah, fair enough. All right, Bob, well listen, thanks very much for coming on theCUBE, we'll leave it there, really appreciate your time. Yep, thanks for having me. Keep right there, everybody, Michael Dell will be up very shortly. This is theCUBE, we're live from Dell World 2014, we're right back.