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 Channel Futures

Best Practices


Ahead of IPO, Nutanix Makes Hyperconverged Play for SMB Market

  • Written by Chris
  • May 24, 2016

If last December’s filing by hyperconverged platform maker Nutanix for an initial public stock offering was supposed to have been the start of a drum-roll, the poor fellow whose arms are about to drop through his timpani got some good news on Tuesday: At Citrix’ Synergy conference in Las Vegas, Nutanix announced a more bite-sized version of its cloud platform.

Brought to you by Data Center Knowledge

If last December’s filing by hyperconverged platform maker Nutanix for an initial public stock offering was supposed to have been the start of a drum-roll, the poor fellow whose arms are about to drop through his timpani got some good news on Tuesday: At Citrix’ Synergy conference in Las Vegas, Nutanix announced a more bite-sized version of its cloud platform.

It’s a market play directed not toward its usual Fortune 2000 customer base, for whom the “hyperconvergence” watchword doesn’t trigger the spell checker on the word processor. Rather, it’s an introduction of the Nutanix brand to small and medium businesses — those who only run a few VM instances at a time, and who today are being served by Amazon and its public cloud competitors.

It’s the type of move that could round out Nutanix in the eyes of potential investors, some of whom may be skeptical of whether a company so focused on hyperconverged appliances may end up being a one-hit wonder.

“What we’re launching is essentially all the Nutanix goodness, but at a better price point that would make it more preferable for small and medium businesses,” said Prabu Rambadran, Nutanix’s director of product marketing, discussing his company’s new Xpress service in an interview with Data Center Knowledge.

Converging Something Else

Xpress, Rambadran said, will include compute, storage, virtualization, systems, and operations management in a three-year support package with a base price of $25,000. The service is designed, like its older and bigger siblings, to be hypervisor agnostic, supporting VMware ESXi and Microsoft Hyper-V, as well as the company’s own Acropolis hypervisor (AHV).

Other vendors in the enterprise space, he remarked, have strategies similar to the way a big truck manufacturer makes a play for the consumer space: by overloading the chassis with air conditioning, sound systems, and in-car electronics. He implied that they’re adding bullet points to their product SKUs without adding value that would actually apply to customers’ everyday workloads.

“What we’ve done is, effectively, not that,” said Rambadran. “If you think about the core storage and virtualization capabilities that SMB customers need, and compare them with what large enterprises need, it’s very similar. All of them need simplicity of management; all of them need high levels of availability, four- or five-nines; and all of them need a solution that shifts the focus back to applications.”

Large enterprises have had the advantage of being able to assign one IT administrator for specific elements of the operation, like a specific application, or a dedicated bank of servers, or even just printing, he pointed out. But that’s becoming less and less of an advantage anyway, as major data centers like Google’s, Amazon’s, and Azure’s have demonstrated the viability of one admin for every 500 or 1,000 servers. These major cloud providers have deployed self-service portals, he pointed out, that have reduced the need for service delegation in the IT department, in a way that applies just as much to enterprises as to SMBs.

Distinguished Workloads

Nutanix’ new marketing push is this: Maybe SMB and Fortune 2000 customers have different needs today, and the phrase “data center” typically applies only to the latter. But as this broader convergence trend plays out, the services they’ll require will end up becoming homogenous slices of power, served in different quantities.

This may indeed be how this market plays out, assuming a VM is a VM is a VM. However, as some analysts have already noted, the nature of workloads that are virtualized by VMs can be very different between enterprises and SMBs. Specifically, enterprise-class virtual machines are bound by enterprise policies that directly address how they interoperate with other VMs, with hypervisors, and with underlying hardware for security reasons.

“Consider the state of centralized policy in the data center,” wrote Hyperconverged.org analyst Scott Lowe, for his 2015 State of Hyperconverged Infrastructure Market Report [PDF, registration required]. “For data centers that have equipment from a wide variety of vendors or that have a lot of ‘point solutions,’ such as WAN accelerators and replication tools, there could be a number of touch points when it comes to policies. These various touch points don’t always align very well with one another, particularly when there are different vendors in the mix. For example, while it may be possible to define some policies at the hypervisor layer, it’s often difficult to apply storage policies that have any awareness of virtual machine boundaries.”

VMs for data centers include not just workloads but virtualized appliances, actually forming some of the infrastructure upon which those workloads are hosted. Managing data center-scale virtualized systems will certainly require a different kind of administration — not just the same admin who can finally become two once the threshold of the 1:500 or 1:1000 admin-to-server ratio is finally reached.

All this doesn’t even touch on the whole discussion of containerization, which Nutanix’s Rambadran believes only applies right now to the cutting edge of large enterprise data centers. Working in Nutanix’s favor for the moment may be another fact that he acknowledges: Most of these big data centers have not yet pushed containerized infrastructure into production. “The jury’s still out on that,” he said.

“One of the reasons why small and medium businesses typically look at a public cloud solution as a viable alternative,” he continued, “is because standing up an infrastructure in their data centers has always been complex [and] expensive.”

SMBs, he believes, won’t consider containerized solutions just yet if they’re looking to deploy, say, an application based around a relational database, because they may not address this complexity factor. Rather, they’ll look towards moving their VMs into an infrastructure that’s more cost-effective and simpler to manage. So while there’s a strong argument that containers could provide a cost-effective infrastructure solution for database workloads in the long term, the convergence of enterprise goals and SMB goals may take place in the shorter term, around deploying first-generation VMs more competitively against options like AWS.

That’s a different message from the one Nutanix has given to its traditional enterprise customers, one which touts the “intersection” of Docker containerization and DevOps. What Nutanix appears to need right now, in order to fight the ongoing perception of declining IPO value overall, is some public evidence of a kind of convergence that investors, not DevOps engineers, will appreciate.

Tuesday’s announcement was coupled with the news, delivered at the Citrix Synergy conference, that Nutanix will begin offering a turnkey solution for deploying Citrix virtual desktops, called InstantOn. Geared toward mid-sized organizations, the service will be offered at a flat base fee of $415 per desktop.

Tags: Cloud Service Providers Digital Service Providers MSPs VARs/SIs Best Practices

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