IPO-Bound Nutanix Casts Wider Net For Customers With New Xpress Hyper-Convergence Appliance

Hyper-convergence startup Nutanix on Tuesday unveiled an appliance with scaled-down functionality intended for small and medium-size organizations in a bid to lure new customers ahead of its planned initial public offering.

The appliance, called Nutanix Xpress, comes with a simplified version of the startup's hyper-convergence software that doesn't include complex enterprise features. Nutanix has set up dedicated teams to engineer, sell and market Xpress, Howard Ting, chief marketing officer at Nutanix, told CRN in an interview.

Hyper-convergence, which refers to the combination of compute, storage, networking and virtualization running on x86 hardware, is a hot space at the moment. Nutanix and SimpliVity have raised nearly $600 million in funding between them, but Cisco Systems and Hewlett Packard Enterprise recently launched competing offerings.

[Related: Nutanix Appears To Once Again Be Headed For IPO After Updated SEC Filing]

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Nutanix Xpress will be priced as low as $25,000 for a three-node configuration with three years of support when it hits the market in July. "In this landscape, that's a very aggressive price point," Ting told CRN.

Nutanix doesn't publish product pricing, but as a point of comparison, its popular midrange Nutanix NX-3460 appliance had a list price of $201,501 for hardware, software and three years of support as of last summer.

Cisco's entry to the market, called HyperFlex, starts at $59,000 for a three-node cluster including one year of 24x7x4 on-site support. SimpliVity's entry-level OmniStack Solution with Cisco Unified Communication System (UCS) servers, including three years of business-critical support, costs less than $20,000. HPE hasn't yet shared pricing for its ProLiant Easy Connect EC200a appliance.

Nutanix has OEM agreements with Dell and Lenovo, with which the startup works to jointly sell and market hyper-convergence products. But as of now, only Lenovo has agreed to sell Nutanix Xpress, although conversations with Dell are under way, said Ting.

Ting acknowledged that Xpress is in some ways a response to mounting competition, but insisted Nutanix has been planning to roll out an SMB-focused offering for quite some time now.

"This is not all driven from the competitive environment. We always felt we were building a premium product, and this was always in our game plan," Ting said.

Pricing has been a barrier to smaller organizations adopting hyper-convergence, and that's one reason why a scaled-down version of Nutanix makes sense, said Daniel Holm, director of enterprise solutions at InterWorks, a Nutanix partner in Stillwater, Okla.

"Small environments aren't very complex and customers don't perceive as much value for the additional orchestration and large scale-out that's included in the full version of Nutanix. So removing these features will make Nutanix Xpress more attractive to smaller organizations," Holm said.

Jeff Lamothe, chief technology officer at Xioss, an Atlanta-based Nutanix partner, said he thinks Xpress will give SMB customers a more easily deployable and affordable hyper-convergence offering.

"Nutanix Xpress is a system that a single person can easily deploy and maintain, while saving a lot of hardware, software, engineering costs," Lamothe said. "This could dramatically reduce time to market and increase return on investment."

While Nutanix stands to gain more customers with Xpress and expand its addressable market, it's still facing a daunting IPO market. Nutanix filed its S-1 with the Securities and Exchange Commission in December, then updated it in April, but it's still unclear when the San Jose, Calif.-based startup will decide to test the IPO waters.

Nutanix, in the filing, said its revenue grew 85 percent to $190.5 million during the first half of its fiscal 2016, which began July 31, 2015. During its fiscal 2015, Nutanix saw revenue grow 90 percent year over year to $241.4 million.

But Nutanix also had an accumulated deficit of $345.2 million as of Jan. 31, including a $71.8 million loss during the first six months of fiscal 2016.