Nutanix CEO Rajiv Ramaswami said more customers are showing interest in Nutanix following the announcements that its rival VMware would be purchased by Broadcom, however the company does not expect the disruption to drive meaningful revenue anytime soon.
The company outperformed its own expectations for the fourth quarter and the fiscal year with revenue hitting $386 million, down one percent from a year ago, but well above the $340 million to $360 million it told analysts to expect this quarter. For the year, Nutanix hit $1.58 billion in revenue, growth of 13 percent on the year, and above the $1.53 billion to $1.55 billion the company expected.
“I think there is no doubt customers are concerned,” Ramaswami told CRN following yesterday’s earnings call. “But it takes time to migrate. It doesn’t happen overnight. And so when we look at this coming fiscal year we’re not anticipating that’s going to lead to a huge surge in revenue. As I said on the call, we’re not factoring in any major upside.”
[RELATED: Nutanix Cuts 270 Jobs After Supply Chain Warning]
For the next fiscal year, Nutanix expects annual contract value to increase 19-percent to $895 million to $900 million, while revenue will rise 12 percent from $1.77 billion to $1.78 billion.ADVERTISEMENT
“We do expect to see some long-term benefits from this action as customers will look for alternatives,” Ramaswami told investors. “So, that’s what I would say for the VMware-Broadcom situation.”
Even as the company outperformed in sales and contracts, Ramaswami said it cut 270 jobs, about 4 percent of its workforce, in order to control expenses and increase profits. The company said firing those workers would lead to $55 million to $60 million in annual savings.
In response to an analyst question about maintaining new customer growth of around 700 per quarter, Ramaswami said Nutanix is focused on winning quality customers and reaching through investments in the channel.
“In terms of the new logos, we do want to drive more of this by enabling more partner-based selling. We have this program internally that we call Autonomy, which is really enabling partners to go drive business by themselves and also continuing to get some leverage to our strategic partners and making sure that we have the appropriate sales incentives in place,” he said on the call.
Nutanix partners are seeing increased engagements as a result of the VMware takeover, and the issue came up with a Nutanix partner advisory board recently in EMEA.
“That’s creating a lot of uncertainty in partners’ minds as well,” Ramaswami told CRN. “VMware is of course a very channel-friendly, very partner-friendly company, but it’s not clear whether that will continue for partners as this goes forward. Partners all around the world are potentially thinking about what they need to do going forward, and we will continue to invest in the partners.”LEARN MORE: Cloud Channel Programs
O’Ryan Johnson is a veteran news reporter. He covers the data center beat for CRN and hopes to hear from channel partners about how he can improve his coverage and write the stories they want to read. He can be reached at [email protected]..
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