Nutanix, Inc. (NASDAQ: NTNX) is a US-based cloud computing company founded in 2009. The company provides a software-defined enterprise hybrid multi-cloud platform that converges private, public, and distributed cloud environments. Part of its unified platform is a hyper-converged infrastructure (HCI) that integrates computing, virtualization, storage, networking, and security to power any application.
Nutanix competes in the hyper-converged infrastructure (HCI) market. According to Fortune Business Insights, the market was worth an estimated $5.88 billion in 2020. The study forecasts a compound annual growth rate (CAGR) of 24.9% from 2021 to 2029. If the forecast is accurate, the market will be worth $32.19 billion by 2029.
Key drivers of this growth include the need for cost-effective and scalable IT infrastructure, the increasing adoption of cloud services, and the growing demand for data center modernization. While the growth prospects of the HCI market are promising, competition is stiff. In this Nutanix competitors analysis, we demystify the competitive landscape and provide insights into the top vendors in the HCI market.
Bottom Line Up Front
Nutanix is a leader in the HCI market. The company has a strong product portfolio, a robust partner ecosystem, and relatively strong financials. Its focus on hybrid and multi-cloud environments set it apart from the competition. Nutanix’s closest rival is VMware, but other vendors such as HPE, Dell, and Cisco are also jostling for a share of the HCI market.
List of Nutanix Competitors
- Hewlett Packard Enterprise Company (HPE)
- Dell Technologies Inc. (DELL)
- VMware, Inc. (VMW)
- Cisco Systems, Inc. (CSCO)
- Microsoft Corporation (MSFT)
Nutanix: Company Financials and Growth Strategy
Nutanix is a publicly-traded company with a market capitalization of $4.602 billion as of October 10, 2022. The company went public in 2016 through a VC-backed initial public offering (IPO). In its IPO, the company sold 14.87 million shares at $16 per share and raised $224 million. Despite not making any profits since its IPO, Nutanix’s revenue has been on an upward trajectory.
The company’s revenue for the fiscal year 2017 was $766.869 million, representing a YoY growth of 72%. The 2018 fiscal year saw revenue growth of 68.1% to $1.16 billion. For the 2019 fiscal year, which ended on January 31, 2019, revenue came in at $1.236 billion. As for the 2021 fiscal year, revenue grew to $1.394 billion from $1.307 billion in 2020.
The company’s primary revenue sources are product sales, support, and other services. In 2021, the new CEO, Rajiv Ramaswami, led the company in transitioning from product to subscription sales. Now, more than 90% of Nutanix’s revenues come from subscriptions. The company forecasts profits of about negative $50 million and positive $25 million by the end of the fiscal year 2023. Through the subscription model, the CEO is hopeful of $150 million to $350 million in profits by 2025.
Nutanix uses an aggressive growth strategy that has seen it make several acquisitions over the years. Its notable acquisitions include PernixData, Minjar, Calm.io, and MainFrame2. The company is also in partnerships with major tech firms such as Amazon Web Services (AWS), Microsoft Azure, Hewlett Packard Enterprise (HPE), and Red Hat. These partnerships enable it to offer its solutions on major cloud platforms.
For instance, Nutanix’s expanded partnership with HPE in 2021 allowed the companies to bundle Nutanix’s Era multi-database operations software with HPE’s ProLiant servers through HPE Greenlake. The expanded partnership will also see the two companies jointly develop reference architectures and go-to-market strategies. The goal is to help customers who want to migrate their on-premises databases to the cloud or adopt a hybrid cloud strategy.
Nutanix Competitors Analysis
The hyper-converged infrastructure market is competitive. The top vendors in the market compete for market share and mindshare. They also compete for the attention of customers looking to adopt HCI solutions. Below is a detailed analysis of the top five vendors in the HCI market.
Hewlett-Packard Enterprise Company, or HPE (NYSE: HPE), is an American multinational corporation that provides technology solutions. Best known for its enterprise hardware and software offerings, the company has a market capitalization of $15.826 billion as of October 10, 2022. HPE went public in 2015 after splitting from its parent company, HP Inc.
The spin-off saw HPE emerge as an enterprise-focused company with a data center hardware and software portfolio, cloud, and other enterprise services. On the other hand, HP Inc. became a consumer-oriented company focused on PCs and printers. As one of the largest tech companies in the world, HPE has the scale and reach to compete with any other vendor in the market.
Despite the partnership HPE has with Nutanix, the company is also a direct competitor. HPE offers its own HCI solution, known as HPE SimpliVity. Through the HPE SimpliVity 380, the company provides an all-in-one HCI solution that includes computing, storage, networking, virtualization, and data protection features. This platform allows customers to run their workloads on-premises or in the cloud.
Financially, HPE is doing well. It has a more robust market capitalization than Nutanix, meaning it can outspend the smaller company in research and development, marketing, and other areas. For the fiscal year that ended on October 31, 2021, HPE’s revenue was $27.78 billion, up from $26.982 billion the previous year. Moreover, it’s also profitable, with a net income of $3.427 billion in 2021, up from a net loss of $0.322 billion the year before.
Nutanix main competitive advantage over HPE is in its data center software offerings. While HPE offers its own data center software, it pales compared to the comprehensive suite provided by Nutanix. But for Nutanix to compete against HPE effectively, it must continue making inroads in the enterprise market and expand its product portfolio.
Dell Technologies Inc. (NYSE: DELL) is a tech company that provides computer hardware, software, and other technology solutions. Michael Dell founded the company in 1984 as PC’s Limited. The company changed its name to Dell Technologies Inc. in 2016 after acquiring EMC Corporation, a data storage company.
Dell’s main product lines are servers, storage, networking, virtualization, PCs, and workstations. The company also provides services for enterprise customers through its subsidiary, Dell EMC. Given the robust product portfolio, Dell is a direct competitor of Nutanix. The company even offers its own HCI solution, Dell EMC VxRail.
The Dell EMC VxRail is an all-in-one HCI solution that includes compute, storage, networking, and virtualization features. As with HPE’s offering, this platform allows customers to run workloads on-premises or in the cloud. However, Dell’s EMC VxRail heavily relies on VMware’s cycle, limiting its appeal to customers who want to use other hypervisors or more flexibility in their HCI solution.
Part of Dell’s growth strategy is through mergers and acquisitions (M&A). In addition to acquiring EMC, the company also acquired Pivotal Software, a cloud-native platform provider, and Secureworks, a cybersecurity company. Dell also owns about $16.2 billion shares of VMware, a cloud computing and virtualization software company that we’ll discuss in more detail later.
Dell is a large company with a market capitalization of $25.272 billion as of October 10, 2022. Moreover, it’s financially healthy, with revenue of $94.2 billion in the fiscal year that ended on January 31, 2021. Unlike, Nutanix, Dell is also profitable, with a net income of $3.505 billion in 2021. The company ranks 31st on the Fortune 500 list.
Dell operates a highly diversified business, which gives it a competitive edge over Nutanix. The company has a presence in nearly every major market and offers a wide range of products and services. However, Nutanix’s ability to run multiple hardware platforms and hypervisors gives it a unique selling proposition that Dell’s VxRail doesn’t have.
VMware, Inc. (NYSE: VMW) is a cloud computing and virtualization software company founded in 1998. The company’s flagship product is vSphere, a server virtualization platform that allows customers to run multiple virtual machines on a single physical server. VMware also offers other products for desktop virtualization, data center automation, application management, and more.
In May 2022, Broadcom announced its plans to acquire VMware in a cash and stock deal valued at about $61 billion. If the deal goes through, it would be one of the largest tech acquisitions in recent years. Broadcom is a leading supplier of Ethernet network adapters used in data centers to connect servers to the network. The acquisition will give Broadcom a significant presence HCI market and position it as a competitor of Nutanix.
But even without the acquisition, VMware is a strong contender in the HCI market. The company offers VMware vSAN, a software-defined storage solution tightly integrated with vSphere. This platform provides many of the same features as Nutanix’s Acropolis, including data deduplication, compression, and encryption.
VMware also has a robust partner ecosystem. The company has partnerships with major hardware vendors, such as Dell EMC, Hewlett Packard Enterprise (HPE), and Lenovo. These partnerships allow VMware to offer HCI solutions that are pre-configured and tested for compatibility. While Nutanix has similar partnerships, having VMware in its corner gives it a competitive edge.
The current Nutanix CEO, Rajiv Ramaswami, is a former VMware executive. Given Ramaswami’s years of experience in the industry, it’s not surprising that VMware is one of Nutanix’s fiercest competitors. In fact, VMware filed a lawsuit against Nutanix, alleging a conflict of interest and theft of trade secrets but eventually dropped it.
VMware trades on the New York Stock Exchange under the ticker symbol VMW and has a market capitalization of $45.289 billion as of October 11, 2022. The company has stronger financials than Nutanix, with revenue of $11.8 billion in the fiscal year that ended on January 31, 2021. VMware is also profitable, with a net income of $6.356 billion in 2021.
Cisco Systems, Inc. (NASDAQ: CSCO) is a networking and communications company founded in 1984. The company offers some of the most popular networking products in the world, such as routers, switches, and firewalls. Cisco also provides solutions for application delivery, data center virtualization, security, and storage.
Through its HCI, HyperFlex, Cisco offers a comprehensive portfolio of products that can compete with Nutanix. The main difference between the two companies is that Cisco’s HCI is built on top of its networking hardware, while Nutanix’s HCI can run on any x86-64 server. These features give Cisco a slight advantage in terms of performance and integration, but Nutanix’s flexibility may be more appealing to some customers.
Cisco’s main strength is its brand recognition and reputation; the company is a trusted name in the networking industry. Cisco also has an extensive sales force and partner network that can help it reach more customers. However, Cisco’s HCI offerings are relatively new, so the company may not have the same level of experience and expertise as Nutanix.
As of October 11, 2022, Cisco’s market cap was $163.902 billion. The high valuation is likely due to Cisco’s strong position in the networking industry and its potential for growth in the HCI market. The company’s revenues for 2021 were $49.818 billion, up 1.09% from 2020. While it may not be growing as rapidly as Nutanix, Cisco is still a large and established company with plenty of resources to invest in its HCI offerings.
Microsoft Corporation (NASDAQ: MSFT) is a software company founded in 1975. The company is best known for its Windows operating system and Office productivity suite. Microsoft also offers various software products, including server applications, development tools, business intelligence solutions, and video games.
Microsoft entered the HCI market in 2019 with its Hyper-V Server product. The company has since expanded its offering to include the Azure Stack HCI, a hybrid cloud solution that integrates with Azure. Microsoft’s HCI offerings are based on its Hyper-V virtualization technology and can be used to run Windows Server and Linux workloads.
The company’s HCI products are compatible with a wide range of storage and networking solutions from third-party vendors. Microsoft also offers storage and networking products, including the Storage Spaces Direct (S2D) software-defined storage solution. Through the Azure Stack HCI, customers can use Azure services, such as Azure Site Recovery and Azure Monitor, in their on-premises environments.
While Nutanix and Microsoft offer similar HCI solutions, the competitive landscape between the two companies is very different. Microsoft has a much larger customer base and a much broader portfolio of products. The company is also a major provider of public cloud services, which gives it a significant advantage in terms of scale and resources.
However, Microsoft doesn’t focus on HCI as its primary business, which gives Nutanix an edge in terms of HCI-specific features and functionality. In addition, Nutanix has a better reputation in the HCI market and is generally considered a more innovative company. Given the two companies’ different strengths, they will likely continue to compete in the HCI market for the foreseeable future.
Nutanix SWOT Analysis
The following are Nutanix’s strengths, weaknesses, opportunities, and threats:
- Strong product portfolio
- Strong market position
- Well-known brand
- Flexible architecture
- Integrated stack
- Strong partner ecosystem
- Rely heavily on channel partners
- High price point
- Loss-making company
- Lawsuits from former employees
- Growing HCI market
- Expanding into new markets
- Developing new products and features
- Advancements in AI and ML
- Intense competition from major IT vendors
- Potential for customer attrition
- Changes in customer needs and preferences
- Economic downturns
Nutanix Competitors Analysis (FAQs)
Question: What is Hyper-converged infrastructure HCI technology?
Answer: Hyper-converged infrastructure, or HCI, is a software-defined infrastructure that bundles compute, storage, and networking resources into a single system. This integrated approach delivers efficiencies in both operational expenditure (OPEX) and capital expenditure (CAPEX).
Question: Is Nutanix an acquisition target?
Answer: Given the growing demand for HCI, it’s no surprise that industry giants such as Cisco and Alphabet continue to invest in the space. Nutanix, which went public in 2016, is one of the leading vendors in HCI. While the company has not been acquired to date, it is often cited as a potential acquisition target for one of these larger firms.
Question: Who is Nutanix biggest competitor?
Answer: Nutanix’s biggest competitor is VMware. VMware offers many of the same products and services as Nutanix, including HCI. It has strong financials and is a well-established brand. Other players in the HCI space include Cisco, Dell EMC, and Hewlett Packard Enterprise (HPE).
The hyper-converged infrastructure landscape is rapidly evolving. New entrants are challenging the market leaders, and established vendors are consolidating. This growth presents both opportunities and challenges for Nutanix. Nutanix’s most formidable competitor is VMware. As a well-established company with solid financials, VMware presents a significant challenge.
However, given the growing demand for HCI, there is room in the market for multiple vendors. Other competitors such as Cisco, Dell EMC, HPE, and Microsoft are also worthy adversaries. To stay ahead of the competition, Nutanix must continue to innovate and expand its product offerings.
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