Nutanix partners will benefit from the rising tide of web-scale mindshare as Dell launches its XC Series: Web-scale Converged Appliances across the world. But solutions providers currently selling Nutanix-branded appliances through Dell are already discovering other advantages. Choice Solutions, for example, beat out an entrenched Vblock incumbent with the assistance of Dell’s existing server business and its financing capabilities.
Disruption with Dell
Nutanix’s Sr. VP of Sales, Sudheesh Nair, likes to talk about the compressing disruption cycle in our industry. Disruption used to take place over a roughly ten year period, but now it occurs on a to a two to four year cycle.
Large companies tend to be very, very good at running marathons. They spot emerging patterns and then maintain their leadership through acquisition or internal development. Only rarely have exceptional companies such as NetApp and VMware been able to emerge through the disruptive cycles as large leaders themselves.
The datacenter infrastructure landscape is long overdue for disruption. According to IDC, just four manufacturers – EMC, NetApp, IBM and HP, command a 65% market share of storage today. EMC, with a 30% share alone, has been particularly adept at acquiring innovative companies such as Data Domain* and Isilon. IBM and HP acquired XIV and 3Par respectively.
Dell’s acquisitions of Compellent and EqualLogic have enabled it to attain a 7% share of the storage market. In contrast, Dell has a 17% share of the server business which is also dominated by a handful of manufacturers: HP, IBM, Dell, Oracle and Cisco own a 77% market share between them.
This discrepancy between server and storage market share creates a huge incentive for Dell to leverage its server base to more deeply penetrate the enterprise storage market. While Dell knew that EVO:Rail was coming, it also recognized that EVO would be a 1.0 product lacking the necessary enterprise attributes for wide scale adoption. Enter Nutanix.
Nutanix pioneered the hyper-converged infrastructure era just three years ago, but legacy datacenter players have already been scrambling to claim a stake. After EMC’s mid-2013 acquisition of ScaleIO went nowhere, the company now is counting on subsidiary VMware’s EVO:Rail. HP has resurrected its Left Hand Networks product as StoreVirtual with EVO:Rail positioned as a back-up in situations where it can’t sell its own product. Even the leading all-flash array start-up, Pure Storage, has announced it will be coming out with a hyper-converged offering.
Dell, however, took a different tact. It took a look at all the potential hyper-converged products, including one that already utilized its hardware, and quickly realized that Nutanix’s innovative vision, enterprise capabilities and exceptional support could enable it to make the same type of inroads into enterprise storage that it already holds with servers.
Dell’s recognition of the huge opportunity Nutanix presented led to an OEM agreement signing that is reportedly the fastest that the company has ever done. The OEM agreement includes unique terms that ensure Dell will not have a price advantage over other partners selling Nutanix-branded appliances. And Dell is subject to the same stringent rules as all of Nutanix partners in terms of forecasting and registering opportunities.
Synergies with Nutanix Channel Partners
Dell partners cannot sell Nutanix without first meeting the requirements of, and enrolling in, the Nutanix Partner Network. And Nutanix-only partners cannot sell the Dell XC Series. But partners of both companies can sell either product depending upon customer technical, environmental and purchasing requirements.
Dell brings a great deal to the table. Customers have a lot of trust in the Dell brand, and Dell already has a pervasive footprint in datacenters across the globe. Its extensive purchasing agreements and contracts with both governmental and commercial entities make procurement much easier. And Dell Financial Services can significantly shorten sales cycles.
It’s already been established that once Nutanix gets a foot in the door for a particular use case, customers quickly come to love the simplicity and elegance of the solution. As a result, Nutanix becomes an almost annuity-like business for partners as customers, now unencumbered by the cost and difficulty of scaling arrays, expand their environments.
But beyond increased revenues and shortened sales cycles, partners of both Nutanix and Dell also benefit from the tendency of web-scale to expand to more specialized use cases such as VDI, private and hybrid cloud, big data, disaster recovery and remote branch infrastructure. Partners consequently have an opportunity to increase their services business, and to provide more specialized services at higher rates.
Datacenter Infrastructure Under Seige
Between web-scale and public cloud, the $73 billion annual server and storage business is under siege for the first time. As Choice Solutions and other Nutanix partners are already learning, working together with Dell enables them to grow their businesses by grabbing a piece of the massive low-hanging status quo fruit.
“Choice Solutions has already had a great experience with the Dell team even before the XC Series has shipped. We have seen first-hand that the partnership will amplify Nutanix’s footprint in the Data Center. Being Part of the Nutanix Channel Advisory Council, I have seen the commitment from Nutanix to protect the interest of the channel, and know that Nutanix has been diligent about the joint opportunity registration program. We already had our first Nutanix/Dell marketing event in Dallas, and the Dell team was both enthusiastic and successful in helping drive attendance to the event. Similar events in other cities are already planned.”
Jim Steinlage, President and CEO, Choice Solutions
*The Data Domain acquisition did not go uncontested. NetApp still has a press release on its Web site proclaiming its acquisition of the same company.