Battling Broadcom: Nutanix Adds 2,700 New Customers Amid Channel-Driven VMware Share Grab

‘With all those customers, the channel was involved. Those 2,700 customers did not come by themselves,’ Nutanix CEO Rajiv Ramaswami told CRN following the company’s fourth-quarter earnings call.

Nutanix’s annual sales leaped 18 percent last year as the company added 2,700 new customers to its platform—including large enterprise accounts that have tens of thousands of compute cores—with the channel flipping more of its VMware customers to the hyperconverged infrastructure platform, said Nutanix CEO Rajiv Ramaswami.

“With all those customers, the channel was involved,” he told CRN after the company’s fourth-quarter earnings call. “Those 2,700 customers did not come by themselves. We service them through our channel partners, and depending on the size of the customer, the smaller the customer is, the more the channel plays a front-and-center role.”

As Broadcom has dumped some of its longstanding VMware channel partners amid a push for larger deals among enterprise customers—dropping from 25,000 VMware resellers to about 18,000 in 2024—those channel partners have brought their accounts to Nutanix, Ramaswami said.

“All those partners have come to us, and some subset of the customers,” he told CRN. “I think these partners have a lot more customers than what we’ve gotten. Clearly, the partners have been influential in us getting these customers. They can’t just overnight bring them all over. They still have to do a migration. So it still takes time, but the partners are certainly leaning in with us now more than they were before.”

Ramaswami said San Jose, Calif.-based Nutanix is in the “second inning” of what he sees as a five- to 10-year opportunity to take share from VMware. With the additional 2,700 customers added this year, Nutanix has 29,000 customers. The deals included more than 50 customers among the Global 2000.

The company expects to land new customers at a rate of mid to high triple digits throughout the coming fiscal year.

“The fact that we have added 2,700 customers over the last year is a good sign that people are moving,” he told analysts during the earnings call. “But there are 200,000 customers out there for VMware. So that’s a lot to go through and it’s going to take time. … We’ve done a fair number of migrations and completed them for customers ranging anywhere from 20,000 cores to maybe even 60,000 to 70,000 cores, which I would call medium to large enterprises.”

Meanwhile, Broadcom is hosting VMware Explore this week in Las Vegas where the company has rolled out new features for its VCF 9.0, which it says can outperform the public cloud.

For Nutanix, another emerging opportunity is its partnership with Dell Technologies’ PowerFlex storage array, which was released in April. Ramaswami said the company has converted two North American Global 2000 customers—a financial services company and a medical device company—onto the Nutanix platform through the partnership.

“The whole value proposition was, they were using Dell PowerFlex along with VMware on the server. … They wanted a replacement for VMware, and they spent a lot of money on these Dell PowerFlex arrays and they wanted to keep those going,” he said on a call after earnings. “We were able to go in there and say, ‘OK, we can work with your existing PowerFlex storage and your existing servers, and you run our software on top of the servers, and we can connect and your experience is even better than what it was before.’ ”

Ramaswami said the Nutanix and Dell PowerFlex partnership is designed for enterprise customers, which can typically lead to longer sales cycles. However, he said, those two wins were both part of an early testing program and came together quickly.

“These are large customers. With all of these I think there’s a very collaborative relationship with Dell. So we are very directly engaged in these accounts, with these customers. They need solid support that we provide directly,” he said on the earnings call. “And Dell has been a very collaborative partner in these accounts, and I expect that to continue as we look at these other big customers.”

Nutanix also has a partnership with Pure Storage to support its flash array, which can provide the storage portion of Nutanix HCI. While it is still in its beta-testing phase, Ramaswami expects to see adoption among Pure Storage customers in the coming fiscal year.

“They want to preserve their Pure hardware,” Ramaswami said on the earnings call. “They’ve invested in the Pure architecture, the Pure storage. They want to keep that at least for some period of time, and therefore we can then essentially do a software change on their servers to be able to allow them to use Nutanix instead of VMware in those deployments.”

For the fiscal year ended July 31, Nutanix’s revenue reached $2.54 billion, up 18 percent over the previous fiscal year. The company’s net income of $39 million was up from a net loss of $108 million in the year prior.

For the fourth quarter, Nutanix revenue grew 19 percent to $653.2 million. Net income for the quarter was $13.9 million.

For the first quarter, Nutanix expects revenue to come in between $670 million and $680 million, and it expects sales in the next full fiscal year to land between $2.90 billion and $2.94 billion.