Nutanix will go local for APAC, IPO for transparency

CEO Dheeraj Pandey underscores the need for product localization to address Asia-Pacific markets and explains why the virtualization startup is aiming to go public.
Written by Eileen Yu, Senior Contributing Editor

MIAMI, USA--Virtualization startup Nutanix has its eyes set on an IPO but not before it becomes a more global entity, says its founder and CEO Dheeraj Pandey, who is also looking for a bigger footprint in the Asia-Pacific region.

"We believe some day we have to go public because only when we go public, will we be more transparent," Pandey said in an interview with ZDNet, on the sidelines of the company's .NEXT user conference here this week. "But it's a function of macroeconomics and the market, so we haven't put a timeline as such [on when the company will go IPO]."

Apart from aspiring to be more transparent, before heading for the IPO route, the CEO wants the company to have a wider global footprint and a portfolio of regions and geographies as well as global customers.

"We need to be able to support global customers and sell to them. So we want to do all of that before we go public," he noted, adding that the company needed to continue investing in global partners and talent outside the United States.

He also pointed to the need to expand its network of international hubs beyond existing ones in Amsterdam, Sydney, Tokyo, and Bangalore, which serve as support, sales, and engineering facilities.

The company's Singapore outfit, in particular, had been managing a significant amount of business for the Asean region and many of Nutanix's global customers were buying out of the country, he said.

Nutanix CEO Dheeraj Pandey

He revealed that the company was finalizing an agreement with "a very large application vendor" to co-develop a product in Singapore. He declined to provide more details, but said this deal was expected to be made public over the next few weeks.

When Nutanix does eventually go public, Pandey said the incoming financial haul will be tapped to beef up its global support and reach, increase awareness of the brand among Global 2000 companies, as well as further boost its research and development efforts.

Among these, expansion in the Asia-Pacific region would certainly be in the cards, he added. Japan, specifically, will be a key growth area and with customers in the Asian market highly focused on reliability and disaster recovery capabilities, Nutanix will channel its product development in these areas, he said.

Some 30 to 35 percent of the company's business currently comes from outside U.S. and Pandey said it would be "ideal" for Asia-Pacific to account for 15 to 20 percent of its overall revenue. India is part of Nutanix's EMEA business, and excluded from the Asia-Pacific.

Localization is key to APAC growth

Pandey believes localization will be a necessary component for the company to succeed in Asia. Companies that believe they are local and, therefore, apply a global strategy to local regions are making a big mistake, he noted. He described how US food manufacturer Kellogg's tried to sell cold cereal in India and failed miserably because Indians liked their breakfast warm.

"So the first lesson is we need to localize. When these consumer companies realize the value of localization, tech companies must as well," Pandey said. "There's no one product for all, and that applies to partnerships, allies, and hardware vendors. All these things we need to figure out."

Noting that the company's OEM agreement with Dell was a global one, he said plans were underway to identify at least one or two local OEM hardware partners for China and Japan.

He explained that Nutanix operated a two-tier distribution model in the region, with each market comprising typically two main distributors on the first tier, which then support a network of resellers. The vendor has a direct relationship with 25 of its largest resellers, and it plans to increase this to the top 100.

Globally, Nutanix is looking to win over customers by touting its idea of an " invisible infrastructure", in which it believes enterprise computing--spanning storage, compute, and cloud--should run so seamlessly in the background that companies should not know it is there.

The vendor this week unveiled new products it said would enable organizations to easily deploy, move, and manage virtual machines regardless of the hypervisor brand, including its own Acropolis hypervisor which was also launched here.

Asked if its move up the software stack meant it was gaining new competitors, Pandey said the company did not go out looking to do so.

He pointed to how Apple's iPhone had displaced several single-function personal devices such as video cameras, music players, voice recorders, and GP devices. "But Apple didn't compete with them, it just displaced them," he said. "So, today, Nutanix displaces blade servers, fiber channel switches, and storage arrays, but we don't compete with them. All that is just collateral damage of convergence."

He added that shifts in the personal computing realm were now taking place in enterprise computing market, which had yet to have a clear winner. Eventually, Nutanix would compete with another platform player, he said, adding that it was still early days to determine who its competition.

"We don't even try to define competition. It's really not VMware. At the end of the day, if anything, we leverage their platform and try to make the best products on top of them," Pandey said.

Instead, he noted, Nutanix needed to guard against any wrongdoing internally. "The real enemy is within. It's our potential for hubris, accounts control with customers, and getting arrogant with partners," he said.

Based in Singapore, Eileen Yu reported for ZDNet from Nutanix's inaugural .NEXT user conference in Miami, USA, on the invitation of Nutanix.

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