Dheeraj Pandey on theCUBE at Dell EMC World 2017

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Nutanix was at Dell EMC World this week in Las Vegas, and it was great to connect with the community and showcase how we are working with Dell to deliver the best user experience.
Dheeraj Pandey sat down with theCUBE at Dell EMC World and shared his insights. Enjoy the video, we also have a transcript of the discussion listed below.
[h4]Intro Announcer:[/h4]Live from Las Vegas, it's the Cube, covering Dell EMC World 2017, brought to you by Dell EMC.
[h4]John Furrier:[/h4]Okay, welcome back everyone. We are here live in Las Vegas. This is the Cube, Silicon Angle's flagship program. We go out to the events and extract the signal to noise at Dell EMC World 2017, our eighth year covering EMC World, first year covering, now Dell EMC World. It's part of the combination. Our next guest is [00:00:30] Dheeraj Pandey, the CEO of publicly-traded Nutanix. Been on the Cube pretty much every year since inception when they were just a startup, now a massively growing, now public company. Dheeraj, great to see you. Thanks for coming on and spending your time to come on the Cube.
[h4]Dheeraj Pandey:[/h4]Pleasure.
[h4]John Furrier:[/h4]So, you're a public company. Can we still have the robust conversation? You have messaging, you gotta stay tight on, you gotta be careful, no forward-looking statements?
[h4]Dheeraj Pandey[/h4]No, please. I think, you know, fire away, actually.
[h4]John Furrier:[/h4]Okay, first question is ... Congratulations on the IPO and you guys are growing [00:01:00] now. Your growth strategy is in full gear. Give us the update because you now have competition behind you looking at you guys. Wow, that Nutanix thing that we kinda dismissed in 2010 has actually played out. It's booming. You're successful. How are you keeping ahead of the competition? What's the expansion? What's the growth strategy?
[h4]Dheeraj Pandey:[/h4]That's a great question, and by the way, it's been the same question every year, in '11, '12, '13, 14', 15', '16, now '17. I have a favorite metaphor these days I tell people. It's like you paint the Golden Gate [00:01:30] Bridge and you go back and start again and you go back and start again, and you keep doing this actually. That's the only way you'll actually be able to survive in this competitive landscape ... So on a journey that has no finish line. As long as we keep looking at how happy our customers are and what the retention rate is, what the repeat purchase pattern is, what the net promoter score is. And do they same thing for employees. How well are we able to retain them and what's the net [00:02:00] promoter score. Things like that.
[h4]John Furrier:[/h4]What's the head count now for your guys employee-wise? What's the employee headcount?
[h4]Dheeraj Pandey:[/h4]2,700. Around 2,700.
[h4]John Furrier:[/h4]So I mean it's big company, global. Painting the Golden Gate Bridge is not the same with 2,700 people. So how do you keep them agile? How do you keep them motivated,? How do you keep them nimble?
[h4]Dheeraj Pandey:[/h4]And I think it's back to the leaders and how can you get ... Because eventually, if you have to scale this, you need to put enough leaders along the way. Including the first line manager who needs to act like a leader. Right? I mean, as opposed to being too myopic. And yet you [00:02:30] have to have a five-level deep relationship using Slack and Twitter and some of these social media tools are very good for us to even stay connected with people who are four levels deep from us. Because that's the kind of personalization you need to do at 26, 27 hundred people.
[h4]John Furrier:[/h4]What's the vision in terms of that reinvention, that entrepreneurial fire that you have? And I think this has been consistent ... You look at Jeff Bezos at Amazon. He was still talking about a startup when he was driving the Chevrolet truck bringing packages down to the post [00:03:00] office. His letter to shareholders. Don't be irrelevant. You gotta stay relevant. But you still want to have that entrepreneurial spirit. But you gotta have the growth. What's that next hill? What's the technology enabler? Is it more the same? Are you doubling down on your core technology? Where's your thoughts in all this?
[h4]Dheeraj Pandey:[/h4]So as you see, we initially started out as an app on top of VMWare. And in the last couple of years, we've been working for this for four years now, we said look, we need to own our own stack. The whole stack has to be ours. And I think there's another three to five year journey just in that to make sure [00:03:30] that the Hypervisor, the storage stack, and the operations management, the systems management, the automation orchestration pieces. They all are elegant and scalable and the way we actually thought it to be just for storage itself has to apply to all these layers.
And then finally, I think one of the aha moments that we had last year was how do you really converge converge. The only way you converge, not just all the IT silos but also build a bridge between [00:04:00] IT ops and dev ops. By talking an application language, it's all about the app. It's not about compute, storage, networking, things like that. So then we started thinking what's the right construct to really converge people.
And I think that's when this acquisition happened. We said, "Look, we need to start thinking about Calm as the blueprint for convergence in some sense." And now the company is thinking about the app more than ever before. It's all about the app. The app [00:04:30] specification, the yama language, and you're thinking about what ... You know, does compute get expressed as, a VM or a container? Is it a web tier? What kind of operating system does it need? What kind of scale out policies will it have? What thresholds will it use? What does the middleware look like? What does the data tier look like? How do you build dependencies between these tiers? What about the firewall, the load-balancer? So you start thinking about working the whole body of the app itself including micro segmentation and things like that. That's what's really driving [00:05:00] the business going forward, that we are all thinking about convergence in a way that is more computer science-ish as opposed to just ... It's an informal word that is converging with the layers of the stack itself.
[h4]Keith Townsend:[/h4]So Dheeraj, painting the bridge, one end to another, Nutanix is actually a pretty amazing company when you look at it from the outside in. You guys have taken a concept, HCI, and you've, from a company, talked to you guys on twitter. They've moved away from HCI. They're talking about [00:05:30] cloud, and marching forward. But the enterprise doesn't move quite that fast. How is the conversation between you and ... now after the IPO you're having much different conversations with different people. How have the conversations with the customer changed? Traditionally, infrastructure, VDI, specific use case, has moved on to being a core builder of data centers, to now this relationship with developers, how has that [00:06:00] conversation changed and challenged your team?
[h4]Dheeraj Pandey:[/h4]That's a great question by the way. If you look at the fundamentals of HCI, it's not about computer storage coming together. It's about how you use homogenous hardware to actually build everything on top of it. So, exactly like the way cloud companies think about racks and racks of servers, and nothing but servers. And then all the layers of the data center become pure software. That is the true journey to what this enterprise cloud, [00:06:30] you know vision that we actually have.
And in the first step of our journey we said look, "We got to look at something that is extremely viscus, has gravity, is very static and has stickiness storage." Storage became the music to Nutanix, just like for Apple to converge something, they had to bring a phone and music together. And then everything else came on top of it, you know, and that's what storage was for us actually.
But at the same time we said look, "We have to be flexible." Obviously when you talk about Twitter as an example, not just at Google and [00:07:00] others, there some apps where you just have blade servers and you have storages [inaudible 00:07:05] grid, and others where you need to keep them together, and so on.
We had to think through that flexibility, as well. That look ... There's some apps that, just because of licensing reasons, you can not virtualize them and you can not run storage controllers on the same nodes, where the Oracle licenses are used and so on. So we also were able to decouple it and say look, "We have the same software." Like the way it runs on IOS and Iphone and Ipod, the [00:07:30] same software can actually light up a hyper converged grid, but can also light up a storage grid, that's serving all these physical applications, as well. That's the beauty of the company and the product, that we've paid the architectural debt. They don't need to have different operating systems for different kinds of use cases, and so on.
[h4]John Furrier:[/h4]You bring up the Apple thing. First of all, to quote Steve Jobs, the crazy ones often have the ... Change the world. You did. You had them all and ... You know, we talked about this in 2010. I said to Dave and David Floyer, Dave Delante and David Floyer, "Man, Nutanix [00:08:00] men ... These guys ...These ... This is radical ... If this plays out, it's gonna be a game changer. And it did. So, but you mentioned music. Apple also radically changed the pricing of music and kind of went from free bootlegging it through p2p networks to actually ...
[h4]Dheeraj Pandey:[/h4]Digitizing it or ...
[h4]John Furrier:[/h4]Digitizing it, monetizing the song.
[h4]Dheeraj Pandey:[/h4].99 cents and so on.
[h4]John Furrier:[/h4]So, let's take your model forward. You need to think differently on pricing. You mentioned licensing. I get that company-wide, but how are you gonna, kinda, un-bundle pricing? Because that's also gonna have to be innovative [00:08:30] to match the technology innovation.
[h4]Dheeraj Pandey:[/h4]Absolutely. Great question.
[h4]John Furrier:[/h4]What is the business model innovation?
[h4]Dheeraj Pandey:[/h4]Well, I think the most important thing was to bite-size infrastructure. So, you bite-size compute, you bite-size storage, you bite-size networks, micro-segments, you overlay networks. Things like that. You have to bite-size everything. And now you can charge for it. So I think we spent the first seven years saying, "The fundamentals have to change first. And which is what Amazon[inaudible 00:08:55] have to do, as well. You cannot just create a cloud without thinking about paying [00:09:00] the architectural debt, which is what they did with commodity servers, zen hypervisor, EBS, S3, C2 coming together. And then [crosstalk 00:09:08].
[h4]John Furrier:[/h4]So, are you pricing differently?
[h4]Dheeraj Pandey:[/h4]So, I think just now that we are at the Dell EMC Conference, you know, we talk about the [inaudible 00:09:15] flex pricing, you know. [inaudible 00:09:17] a part of that pricing strategy, as well. And I think ... And we do similar things within Nutanix, too. But the point here is not just how you are able to push hardware to a customer and say, "you can pay sep [00:09:30] ... Differently." Because, if it's not done at scale with enough efficiencies, it won't scale. What does it mean? You need to really have massive economies of scale where you can able to ... You're able to reuse all this stuff.
[h4]John Furrier:[/h4]So, flexible pricing ... You're looking at it as flex, almost elastic pricing, if you will. I mean, that's the way you're thinking about it. Did I get that right?
[h4]Dheeraj Pandey:[/h4]Yeah. And also virtualize it because, at the end of the day, if you don't have good growth margines because you have all this underutilized hardware sitting at the customer, it's never gonna be able to scale. So you have the fat [00:10:00] of flex pricing but it's not helpful at a billion dollars, actually. So, when you start thinking about a billion dollars worth of stuff, you need to start doing things in software. You know, how often can you shuttle it back and forth from one [inaudible 00:10:12] back to a pool. From a pool, what kind of tools do you use to actually give it to the second customer? Bring it back from there. There's a lot of this mobility stuff that you need to build before you say that this flex pricing can really work at scale, actually.
[h4]Keith Townsend:[/h4]So, Dheeraj, we had David Floyer on earlier [00:10:30] today and he was talking through how storage is the glue to hybrid cloud, multi-cloud. Nutanix is in a unique situation. You guys have been really aggressive with decoupling the platform ... You know, I can ... I think it's fair call your solution a platform now ... The platform from the hardware. As we look through cloud providers, and such, how do you envision Nutanix being the core, or the glue of that platform that [00:11:00] I'm sure you envisioned three or four years ago?
[h4]Dheeraj Pandey:[/h4]That's a great point, by the way. So, let me give you an analogy. You know, the heart is storage. It's data. It's state. Brain is the compute piece and the network is the spinal cord and the nervous system, actually. All of these are equally important for a living being. And you need to ... If you're doing a softer defined version of one and you do it for the other with containers and virtualization of compute with VMs and such and then spinal cord and everything that [00:11:30] comes with it. The network and, you know, you talk about overlay networks and micro-segmentation and things like that. They all are important glues for our lives, actually. You can't just look at one and say, "This is this." Now it has to start with the heart, because the heart is where life begins. And state is where applications begin, but then there's a lot more that happens beyond that.
So, I think at the company, we've built an end to end stack now. That doesn't mean that you can't take our app and run it in a VMware stack, either, or a Microsoft [00:12:00] stack or something like that. Parts of our "apps", just like Microsoft's apps can run in IOS and MacOS and also run on Windows. I think we have taken that app strategy, where we're saying, "We can't have the platform hubris that stagnated Microsoft, for ten years actually. Because they put an all Windows strategy. And everybody was paying the strategy tax off Windows which stagnated them. It [inaudible 00:12:26] them, actually. Instead, we're saying if you have to learn some good lessons [00:12:30] of the 2000's, what could we learn? We could say, well, "We have a stack. It works pretty well, but our apps have to be portable enough to run on Windows and MacOS and even Linux, now. If you think about Sequel Server, it runs on Linux.
[h4]John Furrier:[/h4]I mean, Microsoft's lesson to be learned, I would say, is they didn't paint the Golden Gate Bridge over. They kind of relied on it and it got a little rusty ...
[h4]Dheeraj Pandey:[/h4]Exactly.
[h4]John Furrier:[/h4]And they didn't kind of make ... Pay it forward to themselves and their team.
[h4]Dheeraj Pandey:[/h4]Everything was about Windows. Everything had to be about Windows. So, we will never [00:13:00] make it all about AHV. And I think all about Prism. Right now, Prism is an app to manage your data center, but we have API, so you can actually integrate with Service Now and, you know, different, even Vcenter and virilized automation, and so on. I think they're taking extremely API-centered view of things and that's the way they build a huge mold of an operating system. Because even the Microsoft of the '90's was all about API. They didn't have the best firewall. [00:13:30] They didn't have the best malware scanner. They didn't have the best DLP software, the backup software. But they have the best operating system with the most robust and [crosstalk 00:13:40] to API, actually ...
[h4]John Furrier:[/h4]They had a great developer network. The developer network made them. They filled the white space in for them.
[h4]Dheeraj Pandey:[/h4]And how did the developer [inaudible 00:13:45] network company, the APIs? It's all about APIs.
[h4]John Furrier:[/h4]Yeah. And they gave the latitude to fill the white space.
[h4]Dheeraj Pandey:[/h4]Exactly.
[h4]John Furrier:[/h4]They nurtured their ecosystem. So on the close thread, that's a good segway to my next question is, as you guys grow a lot of people who don't know the history go, "Okay, where's the [00:14:00] growth strategy?" They kind of squint through it. So I want to ask you ultimately is determined by the customers. So what are the key customer segments that you guys have now that can give the dots to connect for your growth strategy? What are your key customer segments?
[h4]Dheeraj Pandey:[/h4]I think the tactical twelve to twenty four month is converge my teams. I have too much politics. And I think app-centric view is gonna help there a lot. Cause we'll ... We have to re-skill a lot of people. Think about it. The storage folks have to talk about the app blueprint. The networking folks [00:14:30] have to talk about the app blueprint. The virtualization folks have to talk about the app ... There's a lot of re-skilling. And with an elegant one click design we can re-skill a lot of talent, actually. The most important thing, not just for our company and our customer, but for the industry in general. How you elevate people is by bringing new constructs that helps them talk a different language, actually. Java did this to developers, you know. Ruby and Python did this to a lot of people, as well. So that language actually has to be built in a different way.
That's a twenty-four month kind of roadmap [00:15:00] for us. But then the other one that they're talking about is, "Okay, fine, you've all this stuff. Imagine it's gonna work on [inaudible 00:15:06]. How do I converge captics and optics together." Part of it this cloud flex model that you heard about in this conference. But a big part of it is how do you take an economist data center that I run and someone else's data center glue them together. Not just from storage point of view, but from networking and security and identity and even billing and measuring and stuff. So there's a lot of that work that remains to be [00:15:30] done, actually.
[h4]John Furrier:[/h4]Dheeraj, you're a fantastic entrepreneur and ... Big cheerleader for you're success. I'm not afraid to say that even though we're independent media. I think it's okay to cheer for people that have done a great job in their journey. Also, we're ... Been kind of critical of you guys in sometimes, in some cases. But congratulations. Great journey going public. I also was congratulating Mike Olson and Amr Awadallah at Cloudera. Also, friends as well, boy I've been ... We've been pretty critical of those guys. But it's okay to cheer public companies.
[h4]Dheeraj Pandey:[/h4]It's good to be. You're the fourth estate, so you have to be critical of ...
[h4]John Furrier:[/h4]But I think [00:16:00] its okay for journalists to cheer on a success as a milestone. Not pump you up, but I think it's important as an IPO, as a milestone. I want to get your final thoughts on ... Final question, which is ... A lot of you want to know what it's like to go public and I've mentioned it to Mike Olson and Amr ringing the bell at the stock exchange. It's a milestone. It's not the end of the journey. It's, again, painting the bridge as you said and he said. What's it feel like to go public as an entrepreneur when you're mostly misunderstood, called the crazy one? [inaudible 00:16:26], you're growing your team. It's a [00:16:30] rollercoaster.
[h4]Dheeraj Pandey:[/h4]Absolutely.
[h4]John Furrier:[/h4]But it's a milestone, the IPO. What it's like? And share your thoughts with the people who have never gone public ... Always have wanted to know what it's like to go public.
[h4]Dheeraj Pandey:[/h4]Yeah, I sound a little conceited or maybe even presumptuous or too ambitious but ... You know when Amazon went public is was a $700 million dollar company. Oracle and Microsoft were sub-billion dollar companies when they went public. Even when you look at the data points, I mean, we're probably as big as the sales force of '06, 2006. VM [inaudible 00:16:58] of '06, in that sense. [00:17:00] EMC, Cisco of '94, Oracle of '89, Microsoft of '89, '90.
[h4]John Furrier:[/h4]Pre-growth. The beginning.
[h4]Dheeraj Pandey:[/h4]Yeah. In terms of growth and where they were in '89, '90, '94.
[h4]John Furrier:[/h4]If you bought stock at Cisco in '94 you're at the beach right now clipping coupons.
[h4]Dheeraj Pandey:[/h4]Yeah and I'm not saying that we'll become one. You know, I think there's a right of passage [crosstalk 00:17:19]
[h4]John Furrier:[/h4]That's a forward looking statement by me. Signed off by you.
[h4]Dheeraj Pandey:[/h4]Well, that's the ambition of the company. It's like, every decade and a half there's a new operating system that emerges. The question is, can we be the [00:17:30] operating system that actually straddles the clouds, with the cloud is a new moldable. I think it's a massive opportunity. There's a lot of actually work on.
[h4]John Furrier:[/h4]It's an accelerant, too. This really, like, moves things on.
[h4]Dheeraj Pandey:[/h4]Absolutely.
[h4]John Furrier:[/h4]And your feelings of going public? Milestone for you? Just another day in the life?
[h4]Dheeraj Pandey:[/h4]Yeah. Just cash in the bank. You know, the fact that we ... The worst is not bad enough because we have all this cash. Now we have to use it conservatively and efficiently. But you know now if we can focus on delight on one hand and waste, companies that do a great job at delight and waste become large companies [crosstalk 00:18:00].
[h4]John Furrier:[/h4]Well, certainly now the [00:18:00] data is transparent so it puts more pressure to execute and rally the team. Congratulations on all your success Dheeraj Pandey here inside the Cube, CEO of Nutanix. I'm John Furrier. Keith Townsend, Keep ... Keep it here, Dell EMC World 2017. More Cube coverage. Stay with us after this short break.
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