Nutanix Sales Boom As New Logos And OEM Partnerships Deliver 22 Percent Revenue Gain

Nutanix beat all of its guidance, with third-quarter revenue up 22 percent year over year to $639 million, well ahead of the $620 million to $630 million the company had anticipated three months ago.

Nutanix added around 650 new customers in its most recent quarter amid its ongoing trend of VMware displacement, aided by partners like Cisco and Dell Technologies, which are reselling its technology, and an uptick in MSP customers and cloud service providers building sovereign clouds internationally.

“There are some customers who say, ‘Absolutely, I want to get out of VMware, Broadcom and move.’ And those customers tend to be more motivated in progressing these deals forward at a more rapid clip,” Nutanix CEO Rajiv Ramaswami said during the company’s third-quarter earnings call. “We’ve talked about winning large customers as well as small customers, so these logos are across the spectrum.”

During the previous second quarter, San Jose, Calif.-based Nutanix added 620 new customers. Ramaswami also pointed out that the number of companies attending its annual NEXT 2025 conference has swelled from 55 last year to 85 this year.

Nutanix has also seen an uptick in business from organizations that quickly renewed with VMware three years ago, when its $69 billion acquisition by Broadcom was first announced in order to lock in pricing and now those customers have contracts coming up for renewal.

Ramaswami said many of those customers began talking with Nutanix about migrating away from VMware immediately, using the three-year contract as a runway to leave the platform. Others took a wait-and-see approach, he said.

“And for that sector of customers, now they’re looking at another renewal that they’ll probably have to renew,” Ramaswami said. “And the sense we see is for those people who are not ready, they are increasingly saying, OK, boy, I hope this is my last renewal, and I can do something about not being dependent again, say, three years from now.’ “

Nutanix beat all of its guidance, with third-quarter revenue up 22 percent year over year to $639 million, which was well ahead of the $620 million to $630 million the company had forecast three months ago.

The company’s alliance with Cisco continues to ramp and deliver new logos. Ramaswami said its partnership with Dell Technologies is poised to do the same thing. He said Dell and Nutanix’s HCI product has seen decent traction in the market the last two quarters. The addition this quarter of Dell PowerFlex with Nutanix is poised to be a win.

“It gives customers its entire cloud infrastructure stack, minus the storage,” Ramaswami said. “It includes our hypervisor. It includes our networking pieces, our security and microsegmentation offering and of course it includes our full management suite. There’s a limited installed base of PowerFlex but it’s inside very large accounts, customers like Moody’s, for example, where there’s a large footprint of PowerFlex in those accounts. Our whole strategy with (Nutanix Cloud Infrastructure) – the cloud platform minus the storage offering – is to be able to go into those environments and get traction. We have good early access feedback from customers.”

Ramaswami said historically the cloud service provider and managed service provider market had not been a big focus of the company, however that market has been growing to the extent that Nutanix is now rewriting its strategy to meet those markets following Broadcom’s acquisition of VMware.

“While it’s still early, it’s growing. So we’ve introduced specific programs for the CSPs and MSPs and we’ve added some resources, both in the field and centrally to focus on those. We’re adding also some product capabilities to enable these service providers to deliver multi-tenant offerings.”

He said another “interesting dynamic” is also emerging around the build-out of sovereign clouds with some cloud service providers Nutanix works with in Europe, which are building local platforms on behalf of governments there.

“All of these represent a good opportunity for us to have another route to market, and get more leverage,” he said. “And so we are focusing on making additional investments in that space. Early days. That business is small right now, but expected to grow.”