 Okay, welcome back, live here inside theCUBE. This is SiliconANGLE and Wikibon's theCUBE, our flagship program where we go out to the events and extract the student from the noise. I'm John Furrier, the founder of SiliconANGLE. I'm joined by co-host Dave Vellante. John, it's great to be with you here today. Dheeraj Pandey is here. He's the CEO of Nutanix, co-founder and innovator. Dheeraj, welcome back to theCUBE. Thank you, good to be back. So you guys have got this cool shirt on, and I want one. Absolutely, absolutely. So I'll come by, booth up, do whatever trick I have to do to get one, but so you guys are on a rocket ship. It's been unbelievable. So give us the quick update. What's happening with Nutanix? Yeah, in fact, so far so good. I'm going to cross my fingers. Companies come a long way ever since we spoke last. Close to about 300 employees now, about 25 countries. We were all on VMware when we talked last and since then we've actually shipped things from Hyper-V and KVM as well. So, I mean, what we're really trying to do is build a very simple IT fabric for storage and admin systems management. What was the big, go back three years when you were starting the company, they hadn't got funding yet or whatever. What was the big bet that you guys made at that time? Anyway, looking at three or four different innovations, one around Hadoop, which was trying to collapse computing storage, and trying to empower the Java guys to go and do analytics and data warehousing using Java. We looked at Google's data center, we looked at Facebook's data center, we looked at Oracle Exadata. You said they're all trying to collapse computing storage and deliver a solution to the end user. And you said in all these silos of Oracle's ecosystem and Google's ecosystem, Facebook's ecosystem and Hadoop ecosystem, there's some value in generalizing this concept of collapse and computing storage. What if you brought this to the masses? And I think we looked at the first big math application and virtualization was one such math application. And we started digging deeper into storage for virtualization and it was completely broken. So, you know, that's how the company really began. It's like, let's collapse computing storage, let's deliver an end to end solution to the virtualization guy, to the cloud guy. And it's all about simplicity. Yeah, at the time there weren't a lot of reference examples. You mentioned Exadata and at the time it was probably Exadata and HP, right? It really wasn't even that converged. Yeah, yeah. D Raj, one of the things we were talking about before you came on and you've been on theCUBE as a CUBE alumni, so we've been around the block. You've been around the industry for a while. You're seeing a massive disruption. We've been talking transformation for three years on theCUBE and HP had some disappointing earnings replacing topics like Dave Donatelli, IBM's retooling, Microsoft Balmers resigning. The old guard is shifting, they have to make the changes. This is evidence of the disruption that we talked about two years ago when you were on theCUBE. The enterprises are up for grabs. And modern errors here, we're hearing it here on theCUBE again, applications here, follow the applications, application centric, et cetera. What is your take on this? I mean, obviously you've had the finger on the pulse for two years, you're the head of the curve, thought leader, what's your take on and what's happening right now. Is it evidence that cloud is disrupting and causing people to make the shifts? Are people being impacted on a business basis with the results we're seeing? What's your take on all this? Yeah, I think you said it right. Every 10, 15 years there's disruption of some kind and this time around it's around technologies like Flash and around software defined and also around the cloud. I mean, today what Amazon can do in a matter of seconds HPs and IBMs and Dells will take months to set that kind of infrastructure up. I think the velocity of consumption is actually really, it's just growing to that extent where you don't have to wait for months before you can bring up virtual machines and so on. And at the same time you look at people like Jeff Bezos who've been rewarded for making losses. So that's the biggest disruption of them. How do you go and compete with that? I mean, he goes and talks about, oh, we had a $16 billion quarter and you made $7 billion in losses, right? So gross margin is actually up for grabs where, and by the way, Amazon is now a competitor to all the sheet metal guys and all the HPs and IBMs and Dells and NetApps and EMCs and so on. So I think that perhaps is the biggest disruption. A lot of these incumbents, they were dealing with margins as if there was never going to be an end to this fest ever, right? And all of a sudden here comes Bezos and says, you know what, I'm going to, your margin is my opportunity. That's what he actually talks about, right? And the investors love that concept. So I think that's the big disruption that's happening. He's commoditizing, which is changing the margin structure on his competitors. He's also innovating because he's delivering what customers want. So I mean, that's an interesting, you don't see that very often. Yeah, because the ease of use part is the biggest friend of Amazon as well. You know, through a couple of programmable APIs you're able to whip up an entire infrastructure without having to even pick up the phone and talk to somebody, right? I would say they turned the data center into an API. Absolutely. And it is a huge land grab. Now of course you see VMware make a land grab to bring the virtualization to networking and storage, but in a different way, you know? Networking, they have sort of a cleaner story. It's storage seems to be a lot more complex. Maybe there's an EMC factor there. I don't know. What's your take on VMware's push to try to virtualize the network layer and the storage layer? Well, they're also seeing the pressure from Microsoft, they're seeing the pressure from OpenStack, they're seeing the pressure from Amazon as well. And those ELAs that we talk about, especially the large customer base, they're actually under a lot of pressure as well. So they have to find new streams of revenue and networking services and storage services actually are the next, you know, I would say natural streams of revenue. But I'm going to disagree with you on the networking with the storage piece. They have a more imminent product in networking, but the delivery is going to be more complex because changing networking is a whole lot harder. They have a much less cooked version of the storage, you know, service. Right. But storage, inserting storage is easier because you can do it by a project. You can say, well, for this VDI thing or that branch office stuff. Whereas the networking supports all projects. Yeah, and networking is a fabric rollout. It's a complete revamp of the entire infrastructure. And they're actually, they don't understand that space. I mean, even the reps don't understand what it means to sell networking and so on. So I would say that the acquisition of NYSERA is a great technology acquisition, but they have to figure out the go-to market. That's why when you look at the reps selling NYSERA, they have MBOs, they don't have real quotas because they're trying to figure out what it means to- What quotas should be. Yeah, exactly. You guys, I got to ask you because everyone wants to know who's the hottest startup. You guys are tripling in size. Some number, you can probably give us the exact numbers. But obviously you have explosive growth, right? As Dave said, you're on the rocket ship. And people always want to either get a seat on the rocket ship or understand the rocket ship. Why are you guys so successful right now? Can you explain to the folks out there why you guys are such a hot startup? What about the company and what about the opportunity that's resonating with the customer base and the overall growth? Sure. Well, part of it is just the technology. I think it's a difficult product to imitate. What we've done by bringing a lot of these folks from Google and Facebook and VMware and Oracle, and I mean, basically it's a great amalgamation of the best enterprise folks and the best consumer cloud folks coming together and saying, what Google and Facebook can do in their enterprise, in their data centers, why can't it bring that to the masses as well? Now it's a pretty bold statement to say that you can bring all that goodness to the masses. And along with it comes a lot of devil in the details kind of things around visualization and ease of use and analytics and stuff. So we really are a very holistic company at that. You know, we take care of the left brain, which is all the storage features, the data fabric part, the replication, the availability, the reliability, the scalability. But we're also very good at the right brain of UI and ease of use and visualization and so on. So it's a very holistic, I would say, story at that. But I think more than everything else, it's how we really inserted ourselves in the market and tried to disrupt without being really disruptive. And I think we've chosen some workloads that actually are making a lot of headways and especially with virtual desktops and with a lot of virtualization that's happening around Microsoft apps and so on. It's always a challenge as an entrepreneur and obviously you've been successful at product market fit is what we talk about. Obviously to sell the dream to the investors is one aspect where you want to be envisioning the preferred future, but also the product market fit. But the market pieces was hard for you. Can you just go and talk, take us through what that progress was and kind of where you've tacked to today? Sure. Well, I know in 2010, most people were naysayers on this company because they never thought that computing storage can come together. They're like, well, the silos, you guys don't understand the enterprise, servers are bought separately, storage is bought separately. And then in 2011, when server side flash happened with Fusion IO, a lot of people started to scratch their heads like, whoa, this looks like it's going to be some real stuff happening on the server, right? So a lot of the naysayers became fensipers. And then 2012 happened with people talking about cloud and convergence and things like that. Now all of a sudden, Nutanix is the hottest thing. Well, STN helped, too. I mean, the Sierra acquisition might have prompted you guys a bit. Yeah, absolutely. I mean, everything software defined actually helped us as well. But I think this was a process. It was a journey where I would say 90% people being naysayers three years ago to where we are today. I think one of the reasons why we are hot today is also because we made some bets two, three years ahead of everybody else. We said, we can connect the dots around where the world is headed and make some bold moves as opposed to building just a cheaper, faster mousetrap. We were not out there to just build a cheaper, faster storage appliance. We said, we need to really go and disrupt storage in some sense, completely get rid of the hub and spoke architecture of data centers and disaggregate the hub. Take that hub and put it up close to the servers and do it in software. So it's really nuanced though because I remember back in 2010 and the skepticism around you guys was, in part anyway, you had the big guys all going after converged infrastructure, trying to say, okay, we're going to migrate our base. Certainly you had exadata was probably the first, right, is that fair? And then you had VCE coming in and people looked at that and said, all right, maybe this is, and then certainly HP started pounding it and then Dell and everybody else. So some of the skepticism was, who's this little company? How are they going to compete? And so when you talk about disrupting storage, for example, talk about that a little bit more because you do it differently. You mentioned flash before. You guys inherently brought flash into the architecture in a different way. And I think some of those other larger guys that I mentioned are now starting to hop on that bandwagon. I wonder if you could talk about specifically how you approached things differently. You mentioned the bets you made before. What's really different under the covers? Sure. Well, the message is very simple. You do not need a SAN or NAS appliance to build your data centers. So that's where we really started. The premise is that in a hub and spoke architecture that dual controller appliance is gone, is gone forever. Because we take that sheet metal, that big iron approach to storage and you make these little virtual sheet metals or virtual controllers in every server. That's the storage control that sits in every server, right? So that's what I mean by disaggregating the hub and making it appear to appear architecture with software glues all of these servers together and makes it look like one data fabric really. And it starts very small. You can start at three nodes and you can go to 3,000 nodes in one fabric. You know, that's basically the essence of Nutanix that you can take speculation out of your data center capacity planning and start a very small and grow as you go. And that is dramatically different than virtually any other. And I also want to add that, you know, if you look under the hood, what is Nutanix? What have you really used under the hood? There's a lot of no sequel like Cassandra. There's a lot of Zookeeper. There's a lot of MapReduce that we do inside. You know, the kind of frameworks that people used to tackle big data problems a whole lot higher up in the stack when solving marketing problems or, you know, genome sequencing or doing like market behavior analysis. We use all those technologies and frameworks to solve some very mundane problems in the data center, not the least of which is actually storage, you know. I think, so Nutanix is really a big data application built for the data center infrastructure, you know. I've not heard it described that way because I think you talk about globally distributed architecture. You think about, you know, you mentioned MapReduce. You think about shipping function, five megabytes of code instead of petabytes of data. You're building those disciplines and into the fundamental architecture. Absolutely. So I mean, and if you look at this, yes, we deliver NFS and iSCSI and SMB and we go and make this virtualization friendly, but it's essentially a big data application that can run other big data applications on top, can run virtual desktop clusters on top, can run SQL exchange and all that stuff. So it's a big data app that bridges the legacy. It basically says we can run other big, other kind of legacy apps on top of us. So all the tenets that people love Big Data for is around scale, around ease of use, things like that. We bring all of that under the hood and really expose protocols that up until now were only used for legacy applications. We'll have to update our Big Data forecast on the Wikibon team, given the fact that you're now a Big Data application. It's going to increase the market size even further. But we love Big Data. Again, we get excited by that. So I want to drill down on that because when you say Big Data, essentially it's a great word that we love. Everyone hates it, but we'd like it because it causes controversy and conversation. But Big Data is a philosophy to mind and sense about measuring things. It's about software. You mentioned NoSQL, kind of that you guys have baked in multiple things for the general purpose market, from leaders like Facebook, et cetera. But ultimately what you're doing is you're measuring, you're building in automated software or instrumentation to stuff that was once manual. Right, is that fair? Okay, so that could be kind of viewed as Big Data. But ultimately the infrastructure powering apps and Big Data is essentially modern agile, what everyone's calling modern agile. So storage is a big part of that. Gelsing was up there talking about vSAN today. We're seeing a lot of server-side acceleration. So you're seeing compute with Amazon explode on the scene, almost unlimited compute in the future. Storage stills a bottleneck. And direct access and sands, sands and desks are a huge issue. What did you guys do with that? Are you commoditizing that? Are you guys going to just make it plug and play? People want sand and desks, whatever they do. You guys are separate from that? Are you tied to it? Are you bringing that into the compute? Explain that whole storage piece that you've innovated. And then the management control on top. Yeah, I mean what vSAN announced today or whatever VMware has been aspiring to do in the last three, four years of their R&D efforts towards vSAN validates what we are all about. We're basically saying that storage needs to be in pure software, it needs to be on the server, doesn't need to be a special purpose appliance sitting as a dual controller thing, as a hub of hub and spoke, you know really. But what we've essentially done is take an even bolder step than what vSAN is doing. vSAN is going to be in the VMware stack, it's going to be in the VM kernel. We're saying that storage needs to be even above that. Why? Because the hypervisor is the new sheet metal, which is commodity. It's the new sheet metal of the future and the next five, 10 years we'll talk about VMware sheet metal and OpenStack KVM sheet metal and Hyper-V sheet metal and Amazon Zen sheet metal and so on and so forth. So what do you do to really look at these different computing silos of VMware silo or Microsoft silo and OpenStack silo and Amazon silo? You need these fabrics that run on top of them. So we've really pulled all of storage on top of the sheet metal and said it needs to run everywhere. You need to have this piece of storage fabric that runs on all these silos and really unifies them. And not just the data fabric part of it, which is around reliability, scalability, and snapshots and clones and disaster recovery and backups and all that, but also the management piece on top of it. I think at the end of it all, this war, which is the next decade on the data center stuff, is not going to be won on the left brain of data fabric and storage and availability and all that. It's going to be about ease of use. It's going to be about UI. It's going to be about really making it consumer grade. It's going to be about analytics. And push part in kind of management, right? Absolutely. So all the things people talk about when they think of analytics for a genome sequence or analytics for what Target does on a point of sale transactional system, the same kind of analytic systems have to be brought within the data center as well. And I think to be able to analyze that through MapReduce, to be able to visualize it through HTML5, all that stuff is where the real value will be. Do you think that the pricing models are going to be free software and hardware or free hardware with price software? I think what you saw, Juniper announced about a month ago, this is I think going to be Kevin Johnson's legacy to Juniper, decoupling hardware and software. We're going to have a very different discipline around discounting of hardware and margins and hardware versus software is going to be order of the day actually. And I think we've seen that. I know that other 10 gigabit switch companies are talking about it all of a sudden. Juniper is talking about it. I think everybody has to really figure out a way to decouple hardware from software. Yeah, I mean it's interesting. Some people are betting on the free software still going through the hardware heroin that they're used to. And I think one thing that Dave mentioned around how are we also different? We've done everything in software, pure software. There's no real manufacturing skill sets that we put in hardware itself. So we can go and deliver all software as well without having to really save everything these hardware sets to really deliver. So we're getting the hook here but I got to ask you one question as we were talking before this. You're a seasoned entrepreneur, a lot of experience. A lot of young guns are coming into the enterprise space from the consumer. We know some stuff happening. I was talking about my Facebook page about the Aaron Levy posted box.net. And sincerely, we want new blood to come in. There's other entrepreneurs. So the question is the role of advice, experience plays in being a CEO in the enterprise. It's a hard nut to crack. It's always been a hard nut to crack. But with cloud, the consumerization there's a little bit of a blending going on. So what's your advice? One, does experience matter? And two, what's your advice to the new guys coming in that might be watching? Well the first advice I want to give to entrepreneurs who want to come in the enterprise is bridge the legacy. And if you can bridge the legacy and only talk about the future, you're dead. Like OpenStack is failing that from just moment one. VMware became big because it bridged the legacy really well. So that's one. The second thing is respect the channel. Do not try to do things direct. Do not try to optimize the bottom line when you really have to optimize the top line. And the margins will come if you just respect the channel and have partners really think about you. And lastly, I think just be bold and courageous. You have to be fearless, really understand the big guys have a lot of chinks in the armor that you can go and take. So experience matters? Absolutely, I think, you know. Okay, so that's one data point to our debate. It's also on crowdchat.net. If you want to participate with us in theCUBE, go to crowdchat.net slash VMworld, thought leader discussion there. It's the Twitter room, chat room. Everything goes to Twitter and LinkedIn. Check it out. Appreciate coming on theCUBE. Dave, anything, any final questions before we wrap up? Well, I just, you, I think first of all you guys have done a great job of taking on the big guys. You are courageous. You mentioned the dual controller guys. And there's a lot of process and people built up around those. So that, I guess my last question is, you know, what keeps you up at night? Is it unseating all those processes that are hardened around those older architectures and how do you sleep at night? Well, you know, competition has never really given us a lot of pause. I think as a company, we've been so self assured about the big market that we're going after that. If you just do our jobs well, I think that by itself will build a very large business. I mean, the TAM, what we're talking about, this service and storage is 80 billion, but you add archiving to it, disaster recovery to it. It's a 200 plus billion. I pegged it at 400 billion in your TAM. So I mean, we need half a percent of it. Throw some software in new services. Yeah, absolutely. We need half a percent of it actually to really become a very large business. What keeps us awake is people. When we get a lot of very good people together, how do you continue to have the look and feel of a small company? Because it's the heart that keeps pumping all the blood to the rest of the organs that really matters, right? And that heart is about the DNA of a small startup. And at 500 people, can we defy the size and still continue to be agile and be people-friendly and be paranoid about losing people, all that stuff? We need to be really keeping that culture alive. Maintaining that culture, yeah. That's what experience does matter, John. Yeah, and I think we're all sleep-well tonight, given the amount of coverage and networking going on until the late hours of VMworld 2013, packed house. D. Raj, thanks for coming on theCUBE. You're a great entrepreneur. Congratulations on all your success. I know you guys worked hard and tripling in growth. Rocket ship and Thomas, congratulations. We'll be right back with our next guest. I'm John Furrier with Dave Vellante. We'll be right back here for this short break. Thank you.