Sunil Potti, Nutanix chief product and development officer, is the latest Silicon Valley exec to jump ship for Google Cloud. Potti will resign from the Nutanix, effective June 21, to “pursue another opportunity,” according to company filing with the U.S. Securities and Exchange Commission.
“Sunil is moving to Google,” Nutanix CEO Dheeraj Pandey told SDxCentral, noting that former Google Cloud CTO Brian Stevens is joining Nutanix’s Board of Directors. “We are getting a very good Google exec to become our board member as they quit Google, so there’s going to be this infusion of talent that goes both ways.”
Potti’s departure follows Oracle’s top cloud executive Thomas Kurian, who left Oracle late last year and resurfaced as Google Cloud CEO. Since then other Oracle and SAP executives including president of SAP’s cloud business group Robert Enslin have joined the Google Cloud team.
Potti played a major role in Nutanix’s product roadmap including its work integrating Nutanix’s software stack with Google Cloud — Nutanix calls this initiative “Test Drive.”
Pandey discussed Test Drive and Nutanix’s work with other cloud providers during a phone interview after the company reported its third quarter fiscal 2019 earnings.
Hybrid Cloud Partnerships
The hybrid cloud landscape is becoming increasingly competitive as software-defined data center vendors team up with public cloud giants — and the cloud giants move into on-premises data centers.
Nutanix competitor VMware’s cloud partnership with Amazon Web Services (AWS) has been going strong since 2016, and will get an extra boost later this year when AWS launches Outposts, it’s on-premises play that in one flavor uses VMware’s software stack. Additionally, a new hybrid cloud partnership between VMware, Microsoft, and Dell Technologies will allow customers to run VMware’s software stack in Microsoft Azure’s public cloud. And VMware is also a partnering with Google Cloud on Anthos.
But despite announcing a partnership with Google at Nutanix’s .Next event two years ago, Nutanix’s ability to team up with the cloud giants seems to have stalled. Still, Pandey said his company is moving forward with all three major cloud providers.
“It’s not about being the first, it’s about being the best,” Pandey said, noting the company’s work with AWS that integrates the public cloud services with Nutanix private cloud environments. “Something similar will happen with the other cloud providers and they become the new hypervisor to us, like VMware and Hyper-V were to us in the past.”
Nutanix’s software stack lets users use its AHV hypervisor or others including VMware’s or Microsoft’s Hyper-V.
Pandey said Test Drive has been running Nutanix software in Google Public Cloud for almost a year. “Our entire software runs on top of Google’s virtual metal,” he said. “The AWS recent announcement opened up some really good doors. And with Azure it’s very early because they are still figuring out the bare metal APIs to run Nutanix software inside Azure’s commodity fleet of machines.”
Q3 Fiscal 2019 Results
Also on Thursday, Nutanix posted its third quarter results, which missed revenue estimates and sent the company’s stock plummeting more than 16% in after-hours trading. The company reported revenue of $287.6 million, down 1% year over year, and below its guidance from last quarter. Billings were $346.0 million, down from $351.2 million in the third quarter of fiscal 2018.
On the earnings call with investors and later in an interview with SDxCentral, Pandey said the company’s shift to a software subscription business model “has an implication on the top line, both billings and revenue.”
But, he added, Nutanix is ahead of schedule in this shift. Third quarter subscription billings increased to 65% of total billings, up 8% from the previous quarter, and subscription revenue hit $168.4 million, a year-over-year increase of 110%.
“While there are good early signs, the subscription transformation might take a couple of quarters to flush through,” Pandey said. He added that accelerating this transformation is the No. 1 priority for the fourth quarter.