What's Happening With The Partnership Between Microsoft And Hyper-Converged Startup Nutanix?

The partnership between Microsoft and hyper-converged infrastructure startup Nutanix has captured the attention of partners on both sides, though many still aren't clear on what the relationship actually entails.

The relationship began last July when Nutanix joined Microsoft's private cloud partner program, certifying Nutanix's hyper-converged technology -- which combines compute, storage and networking on x86 server hardware -- for use in private clouds built on Windows Server and the Hyper-V hypervisor.

Nutanix is the only hyper-converged vendor in the program, which also includes heavyweights like IBM, Cisco Systems, Hewlett-Packard, Dell and EMC.

[Related: Nutanix Unveils Own Hypervisor, Aligns With Microsoft For Data Center Battle With VMware]

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Nutanix partners see the Microsoft relationship as a potentially powerful validation of the startup's technology, one that could attract more large customers. Nutanix already has an OEM agreement with Dell, and sources told CRN earlier this month that it's also in talks with HP about a similar type of arrangement.

"I think the Microsoft partnership will allow Nutanix to continue its push into the enterprise," Jeff Guenthner, director of solutions architecture at CMI, a Mill Valley, Calif.-based Nutanix partner, told CRN.

Nutanix's simplicity, and the fact that it works with VMware ESX, Microsoft Hyper-V and KVM hypervisors, makes it a complementary private cloud technology to the Microsoft Azure public cloud, Guenthner said.

Nutanix, which has raised more than $312 million in five funding rounds, has set its sights on customers of VCE, the former joint venture between EMC, Cisco and VMware, which is now majority-owned by EMC.

Nutanix executives weren't available for comment. But Sudheesh Nair, senior vice president of worldwide sales and business development at Nutanix, told CRN in June that his company's private cloud expertise can help Microsoft's hybrid cloud portfolio, in which customers use a mix of private and public cloud resources.

"What they see in Nutanix is a partner ... that gets the fact that cloud is the future, and is providing the same type of experience in the data center," said Nair. "They recognize that Nutanix has the ability and potential to disrupt the enterprise data center in a way that a foundation can be built."

Yet Microsoft partners appear somewhat less enthused about the Nutanix partnership.

Aidan Finn, a Dublin-based Microsoft Most Valuable Professional (MVP) partner who focuses on Microsoft Hyper-V, doesn't see Nutanix as a fit for Microsoft's private cloud partner program, which he said is primarily focused on large-scale deployments.

"Nutanix offers an interesting, but very expensive, solution. When I think hyper-convergence, I think small-scale or low-density. That's because of the pressure on resource sharing between storage management and virtualization," Finn said in an email.

Other Microsoft partners believe the Nutanix partnership is primarily aimed at VMware, a rival of both vendors.

"Microsoft is partnering with Nutanix because it's a way to put pressure on VMware," said one partner that works with both vendors, who didn't want to be named because he's not authorized to speak publicly on the matter. "They're willing to do anything to go after VMware to try and marginalize their value."

Nutanix is actually a VMware partner and uses vSphere server virtualization, but the vendors are full-blown competitors in the storage market. Nutanix earlier this year unveiled its own KVM-based hypervisor, along with technology that automatically converts virtual machines from VMware format to KVM and Microsoft Hyper-V.

Although VMware dominates the server virtualization market and is widely seen as having the best technology, some partners believe that Nutanix's moves could be attractive to VMware customers that are looking to lower their licensing costs.

In an interview earlier this week, Vijay Tewari, Microsoft's principal group program manager for private cloud solutions, said the Nutanix partnership came about simply because the two vendors have many common customers, and they were asking for tighter integration between their respective technologies.

"We want to make sure our software works well on the Nutanix stack," said Tewari, who declined to comment on what's coming next in the Microsoft-Nutanix partnership.

Nutanix, as the top-funded startup in the hyper-converged market, is getting lots of industry attention, and is rumored to have fended off acquisition offers from Cisco and others as it marches toward an expected IPO.

Partners of both vendors said while they're not expecting Microsoft to make a play for Nutanix, they're keeping an eye on the partnership to see if it develops into something more significant than it appears to be today.