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Nutanix CEO: ‘A New Company Will Emerge From This Pandemic’

'Corporate initiatives around remote work, hands-free IT automation, disaster recovery, and lift-and-shift to public cloud data centers will be some of the pillars of digital transformation, and we believe we will be at the center of these conversations,' says Nutanix CEO Dheeraj Pandey.

Nutanix founder and CEO Dheeraj Pandey said “a new company will emerge” from the coronavirus pandemic as Nutanix is making strides in digital prospecting, virtual selling and forming a new remote workforce.

“A new company will emerge from this pandemic, and this quarter is just the beginning of that,” said Pandey in a statement Wednesday. “The recessionary macro environment makes our subscription transformation and our delightful zero-touch products even more impactful, as we enable our customers to be resilient, prepared and productive.”

The CEO said Nutanix has seen an “emerging tailwind” around virtual desktop infrastructure (VDI) and Desktop as-a-Service (DaaS) in its third fiscal quarter, which ended April 30.

[Related: Nutanix Confirms Furloughs Of Nearly 1,500 Employees]

“Corporate initiatives around remote work, hands-free IT automation, disaster recovery, and lift-and-shift to public cloud data centers will be some of the pillars of digital transformation, and we believe we will be at the center of these conversations,” said Pandey.

One CEO from a solution provider who is an all-in Nutanix channel partner focused on the SMB market said Nutanix is shifting its vision and road map to meet the new remote workforce demands from customers amid the coronavirus pandemic.

“My customers have moved IT budgets from the office to the home. But will that continue for another month, another six months—two years? [Nutanix] saying ‘a new company will emerge’ means [the company] thinks it will be longer rather than shorter,” said the CEO, who declined to be identified. “I’m not sure if they’re right or wrong, but what I can say is that my customers won’t be going back to pre-COVID-19 operations for at least another few months at least, if not longer.

“I think Nutanix is nimble enough to sort of disrupt itself,” said the CEO. “I’ve put most of my company’s investment on them. I’m more optimistic than not that they know what they’re doing.”

Pandey’s bullish statements came as the San Jose, Calif.-based hyperconverged pioneer and cloud computing specialist released preliminary revenue projections for its third fiscal quarter, which ended April 30.

Nutanix expects third-quarter revenue to be between $312 million and $317 million, up approximately 9 percent year over year. The company is projecting software and support sales of $310 million, representing an increase of around 17 percent year over year, in line with prior guidance. Nutanix software and support billing is projected to be between $365 million and $385 million in the third quarter, up approximately 15 percent year over year.

Although the company is expecting solid sales growth for the third quarter, Nutanix is pulling its previous full fiscal year 2020 guidance—similar to many other IT companies—which included a goal of reaching $3 billion in software and support billings.

“While we have continued to see steady demand for our hybrid cloud solutions, there is a significant level of uncertainty regarding the ongoing impact of COVID-19 on our customers and end markets over the coming quarters,” Nutanix CFO Duston William said in a statement. “We have been proactively and prudently managing expenses to help ensure the long-term health of our business during this pandemic. In addition, as a result of these uncertainties we are withdrawing our guidance for fiscal 2020, which we provided on Feb. 26, 2020, as well as our business model targets for calendar 2021, which we discussed during our Investor Day in March 2019 and which included, among other things, a target for achieving $3 billion in [software and support] billings.”

This week, Nutanix confirmed it is furloughing a total of 1,465 employees in California, representing approximately 25 percent of the company’s worldwide head count, due to uncertain business conditions stemming from the coronavirus pandemic. Nutanix is implementing two separate one-week unpaid furloughs that will occur on a rolling basis effective May 4 through July 26, followed by another round from Aug. 3 through Oct. 31.

Over the past two months, Nutanix has launched a slew of new offerings to help customers and channel partners get through the economic uncertainty caused by COVID-19. The company launched the Nutanix Special Financial Assistance Program to provide channel partners with extended payment terms. It also launched FastTrack for VDI, a new offering that enables partners to create a VDI environment for customers in days.

“With our FastTrack program, we are doubling down with our channel partners and global system integrators to redefine the future of work,” said Pandey.

Nutanix’s third fiscal quarter earnings conference call is slated to take place May 27.

 

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