Nutanix an acquisition target after $101M round : Software assets are key

Nutanix, a frontrunner in the fast-growing hyperconvergence market, just netted another $101 million in a fourth financing round led by Riverwood and SAP’s venture capital arm. New investors Morgan Stanley Expansion Capital and Greenspring Associates also chipped in, along with existing backers Lightspeed Venture Partners, Khosla Ventures and Battery Ventures.

The funding could very well set Nutanix, still a relatively small company compared to other industry leaders, on an accelerated growth path.  Hyperconvergence is a market blooming with new opportunities to rethink IT architecture, and Nutanix is one of the service providers enabling the enterprise to operate more efficiently.

“Nutanix’s virtual computing platform is built on highly scalable software that can deliver performance and functionality. Nutanix’s offering fits well into Wikibon’s Server SAN definition, which we believe is poised to be disruptive to traditional infrastructure over the next five years,” comments Wikibon Principal Research Contributor Stu Miniman.

The funding brings the firm’s total capital raised to $172.2 million for a valuation of approximately $1 billion. That places it firmly ahead of rival SimpliVity, which secured $58 million for its OmniCube PCIe module in late November.

Exploring new markets, boosting sales


Nutanix said that the funding will be used to expand into new markets; hire additional sales, marketing and support staff and accelerate product development. Specifically, the company is looking to deliver more of the enterprise capabilities that were historically only available with dedicated appliances, which don’t allow for the scalability needed to support today’s rapid data growth.

“Last year Nutanix expanded its portfolio to include a variety of configurations. Wikibon would like to see Nutanix push deeper into more application environments, as today VDI makes up a majority of deployments. Full support of Hyper-V deployments is now generally available, which should help expand Nutanix expand its use cases,” Miniman says.

With 300 employees and a presence in 25 countries, Nutanix is quickly becoming a force to be reckoned with in the enterprise data center. As President and CEO Dheeraj Pandey detailed on theCUBE at VMworld 2013, his company’s success is founded on its Virtual Computing Platform, which collapses compute and storage into a unified resource tier that more reliable and easier to manage than traditional SANs and NAS. Wikibon believes that the technology makes the firm an attractive acquisition target to traditional data center vendors.

Nutanix an acquisition target?


“At only a $1B valuation, Nutanix could be attractive to a company that wants to disrupt the data center infrastructure market,” Miniman explains. “Since all of the value is in software, it is possible that Dell or Oracle could consider such a move. It would take a very attractive offer since all indications are that Pandey and the management of Nutanix are building the company to remain stand-alone and could potentially position for an IPO by 2015.”


  • Leading software-defined trends

Pandey is leading Nutanix into the software-defined data center to tackle some of the most fundamental challenges of enterprise storage. The executive believes that simplicity will emerge as a top priority in the next decade, and he’s positioning his company accordingly.

“At the end of it all, this war is not going to be on the ‘left brain’ of data fabric and storage and availability and all that. It’s going to be about ease of use, it’s going to be about UI, its going to be about making it consumer grade, it’s going to be about analytics,” Pandey says, predicting that Big Data will become a central component of the enterprise stack along the way. “So all the things people talk about when think of analytics for a genome sequence, or analytics for what Target does in a point of sale transactional system, the same kind of analytics systems have to be brought within the data center as well.”

Contributors: Maria Deutscher 
photo credit: via photopin cc