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Nutanix: Yup, OK, we gobbled PernixData, What you gonna do about it?

Cracks open wallet ahead of IPO

At long last Nutanix has come clean and revealed it is buying PernixData (VMware's hypervisor memory caching software biz), and confirmed it also slurped devops software company

No prices have been disclosed but we understand the deal was the one referred to in a Nutanix S1 amended filing, which involved 528,517 shares and $1.2m in cash. Nutanix has categorically denied that its $75m Goldman Sachs loan was anything to do with buying PernixData. So we have no idea what Nutanix is paying for PernixData, beyond understanding from a well-placed source that it is not a good outcome for PernixData investors.

With these acquisitions Nutanix thinks it can deliver a hyper-converged enterprise system with the control, security and attractive long-term economics of on-premises infrastructure, combined with the agility, automation and consumer-grade simplicity of the public cloud.

Nutanix made this statement about why it is buying PernixData and “These additions will enable Nutanix to pioneer new software stacks for storage-class memory systems, enhance its Application Mobility Fabric (AMF) with cross-cloud workload migration and bring rich, cloud-inspired orchestration and workflow automation to its Prism management software.”

PernixData brings in IP and engineering talent relevant to the storage-class memory systems idea. It and Nutanix share, we’re told, a view that applications and data need to be as close together as possible. Combined, the two will “develop an advanced data stack to replace traditional storage silos and high-latency networks with newer storage-class memory and advanced interconnects.”

There are “planned strategic investments in new server and storage technologies [which] will provide customers with a re-imagined data fabric for a post-flash era of enterprise computing.” Think XPoint-class non-volatile memory, servers with XPoint-class DIMMs, and, we daresay, NVME over fabrics.

PernixData fail

Nutanix is buying excellent technology but we think this is a poor outcome for PernixData, and its investors, which could not go it alone and have not had a rewarding buyout. We understand employee shareholders, who bought stock with their own cash, get nothing. Why did PernixData fail?

Blogger/user Antony Spiteri writes: “I can say from experience that FVP and Architect are expensive. I’ve been involved in trying to justify spend on FVP internally and I can tell you that it was/is a hard sell.”

“Based on some internal workings, breaking it down the cost of FVP over three years could equate to the cost of 2 or 3 New Generation Flash Based Arrays or legacy SAN systems. That’s a hard pill to swallow and it comes down the crux of why I think FVP was priced too expensively for it to gain the market penetration that might have meant this sale to Nutanix could have been avoided.”

I feel that the pricing model forced people to see FVP as a purely band-aid only solution that was used only in times of desperation…it didn’t deserve that reputation, but it was widely known as truth both inside and outside of PernixData.

With Nutanix now in charge of selling and pricing FVP, and Architect, we might expect a more realistic pricing regime.

The combination of Nutanix and software should enable customers to select the right private or public cloud for an application. Nutanix’ software stack will get cloud automation and management capabilities to “ deliver application and service orchestration, runtime lifecycle management, policy-based governance, comprehensive reporting and auditing services to support all application environments, including virtual machines, containers and micro-services.”

Aaditya Sood, CEO and founder, has a canned quote: “Data centre infrastructure must be fully automated, simple to deploy and easy-to-use. We are excited to join the Nutanix team to work together to eliminate the daunting complexity of legacy data centres by taking a radical, application-centric view of IT infrastructure.”

Reg Comment

With these two acquisitions Nutanix is getting excellent technology will will broaden its software stack and speed its development of storage-class memory systems with greatly accelerated application and server performance. It also gains greater relevance to the DevOps world of cloud-native applications and containerised micro-services.

Its hyper-converged system infrastructure (HCI) competitors face a formidably stronger Nutanix with a forward vision that should appeal to existing and future customers. It should, for example, be better able to handle the heat of Dell/EMC/Vmware competition more effectively, avoiding being fastened to the Vx torture Rack, and comfortably respond to Cisco, HPE, IBM and Lenovo competition. Its acquisition twosome gives a stronger hand when meeting SimpliVity’s HW-accelerated competition as well.

Will this acquisition two-step cause repercussions in the HCI vendor club as Nutanix’s competitors see a need to strengthen their own offerings? There is clear potential for this.

Also, if Nutanix is going for an IPO in the next few months, then this pair of acquisitions make it more appealing to investors. It’s a great foundation for an IPO roadshow to build on. Ballsy moves Nutanix. You might just have an IPO triumph ahead of you. ®

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