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Dheeraj Pandey Kindling the Datacenter Movement
si Team
Friday, November 4, 2016
One morning sitting in a well-lit room of Kanpur IIT Dheeraj Pandey was solving linear algebra, set theory, and Boolean algebra problems. Though a graduate of Computer Science, he was much inclined towards courses not just in system software, but in mathematics as well. A sudden thud on his door and to his delight, he finds his mentor waiting for him at the door. They sit down to discuss the fork in Pandey's road, a decision that he has to make--one that would decide the future of this young graduate. After much consideration, Pandey decides to join UT, Austin, for a PhD program. The door finally opened; what lay ahead was not a room, but a world full of opportunities. Little did he know that few years from now, he would be taking his tech unicorn company, Nutanix public!

So with $800 in his pocket, and a will to make it big, Pandey travels to Austin, and ever since has never looked back. "I took a chance in the bubble to take a leave of absence from my PhD program and then never returned back to finish my PhD. But I worked at some great companies. There are some failures and some successes, but all in all, it's been a great experience," states Dheeraj Pandey, CEO, Nutanix.

In the Beginning

Before founding Nutanix, for which the talks would echo to be the next VMware of Data Center space, Pandey had built disparate systems in pretty much every job that he had after Trilogy. "I worked at Zambeel and Oracle and Aster Data and there was a common theme of building distributed systems. Now one thing I was always passionate about was user experience and design," explains Pandey. With Nutanix, he had a chance to go and build distributed systems for enterprises trying to meld all the learnings of the last ten or fifteen years before that.

"Strong future for a new generation of simpler and easier-to-use data center infrastructure. Nutanix has 'clear differentiation' in a market that is now getting the attention of the largest IT players."

But the journey was not that simple. Pandey had to figure out what it meant to deliver technology that was delightful for the end user. So Nutanix really spanned the boundary of computer science and design. "We're not just a distributed systems company like the way you look at most systems companies, and we're not just a consumer company where everybody talks about user experience and design. We're really at the cusp of both in Data Center virtualization," says Pandey.

What really happened with Hadoop in the enterprise with web scale properties like Facebook and Google and Amazon and others, they were not using any kind of special purpose hardware to really build data centers. There was another phenomenon that was engulfing the smart phone space: convergence, where everything was becoming pure software. "So we looked around in our personal lives; we looked around in the data centers of the next generation and there was one thing in common: the idea that everything would run on racks and racks of x86 servers with pure software on top," explains Pandey.

After pursuing his academic passions in computer science, dabbling in a few industry-related jobs, observing the first Valley bubble as a quiet engineer, and gaining managerial experience at a large data company that had a nice outcome, Pandey finally emerged as a co-founder of a new company. "Nutanix was born. Now our challenge was how do you really bridge the legacy with the future? And that's when we really honed in on applications, to understand the workloads of the enterprise and really take a lot of these legacy data center applications into a future architecture, which people have come to call hyper-converged," elaborates Pandey.

Nutanix apparently picked a workload which was almost a failure in the enterprise, the Virtual Desktops, and connected the dots. "iOS was here, and so was Android. But, if iOS and Android basically come to the edge, in the hands of an end user, what happens to Windows? It's not just vanishing overnight. So, why don't we just build our first workload around a cloud, which is a cloud of Windows Operating System, which people call Virtual Desktops?," comments Pandey. It was of course a very high-risk application, but at the same time it was built in a very honest company. Most startups have the luxury of not taking the most mission-critical application upfront, and Pandey picked one that was almost dead and tried to make it big."We looked at these dots and we connect them, and realized that Windows must go into the cloud as opposed to be underneath the desk as a desktop," says Pandey.

The Next Phase

Soon enough, the California-based Nutanix became a leader in the fast-growing converged infrastructure market. By converging compute and storage resources into a single appliance, the Nutanix solution delivered a modular building block for virtual datacenters. "If you go back six to seven years, it was all about server consolidation. Now it's about consolidation of entire datacenters," says Pandey. Under Pandey's un-perplexed and brave leadership, Nutanix incorporated the same advanced, distributed software architecture that powers leading public cloud providers, but tailored it for mainstream enterprises and government agencies.

Since its inception in 2009, the company has today grown to about 2,000 global employees, more than 3,700 end-customers, and average revenue growth of 17% on a quarterly basis for the last eight fiscal quarters, which grew from $46.1 million in the three months ended October 31, 2014 to $139.8 million in the three months ended July 31, 2016. "Storage and datacenter analytics software like ours are the glue to connect the application silos from Microsoft, VMware and others," states Pandey.

The Subsequent Step

It was a nine-month long journey for Pandey, since Nutanix, the data center hardware startup filed for an initial public offering, but the wait was worth it. Pandey took his company public on 30th September and its shares shot up by 131 percent the first day. Hopes were finally ignited in the IT sector that the long drought of technology initial public offerings could be ending. Stu Miniman, senior analyst with Wikibon, cited this event by stating, "and easier-to-use data center infrastructure. Nutanix has 'clear differentiation' in a market that is now getting the attention of the largest IT players."

The company's shares closed at $37 on their first day of trading Friday, amplifying its market value to more than $4 billion. Though pleased with the IPO response, Pandey feels that the company could have raised more money if it had initially priced its shares higher. "Hindsight is 20-20. We wanted to look at the health of the stock itself and we thought we should start with a number we feel confident about," states Pandey. By going public, Nutanix stands to gain more global customers that are more willing to do business with companies whose finances are out in the open. Pandey plans to expand Nutanix's operations in countries including Germany and Japan in the coming year.

What's .NEXT?

It was on the kick-off day of .NEXT, Nutanix's first-ever user conference, that Pandey reflected on his company's positioning in the new enterprise stack. And now that the firm has got public, what's next for Nutanix? "It's a massive journey. Going from what Microsoft was in '92, office productivity tools company to operating systems to personal computers to the data center to the cloud today," answers Pandey. This is the next door, which Pandey is knocking on. The idea is to bring together everything in pure software, the idea of doing more automation, machine learning, and more one-click, then joining the dots together. "After you buy a home and a car, what are you going to do with all the money? Leave it where it is and focus on really building the company. We've barely begun," says Pandey.

"There's so much more to do. The world doesn't know who we are yet. We're just cracking the surface. Eventually, what could emerge from this company is way different from what it is today," concludes Pandey.
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