Nutanix

Dell XC Series Launches – and Nutanix partners benefit

Steve Kaplan , , , , , , , , , , , , , ,

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 Web-Scale

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

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*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.

Nutanix Workload Sizer: Designing web-scale datacenters just got easier

Steve Kaplan , , , , , , ,

Nutanix is the leading hyper-converged solution for server and desktop virtualization. Over the years, we have developed an extensive depth and breadth of internal intelligence on how to size and scope virtualized workloads including VDI deployments and virtualized business applications. This institutional knowledge is now being made available through the Nutanix Workload Sizer, part of a comprehensive service delivery platform from Nutanix Global Services. The Nutanix Workload Sizer helps partners size and design Nutanix clusters with both ease and confidence.

Sizer Tool Launch Webinar

Over 500 Nutanix partners have already registered for one of the three Workload Sizer Tool Launch Webinars being offered on Thursday. As the video conveys, the Workload Sizer Tool was developed by Nutanix Global Services (GSO) with the same type of simplicity and elegance that Nutanix strives to imbue in all of our products, tools and supporting documentation.

Why Nutanix Developed a Workload Sizing Tool?

The Nutanix Global Services (GSO) team developed the Workload Sizing Tool in response to requests made by technical folks at our partners. These SEs and consultants typically have struggled with the ad-hoc Excel spreadsheet approach to sizing that is so common in our industry. The Nutanix Workload Sizing Tool, a web based tool, contains a very sophisticated algorithm in addition to a really intuitive interface.

Sizer Pic

Why the Nutanix Workload Sizing Tool is so Accurate

Many virtualized and private cloud environments start out small, and then grow over time. With conventional server and storage systems, this presents an enormous challenge for partners to try and guess up-front what the environment will look like years down the road in terms of user count or application resource requirements.  Additionally, since all storage traffic is funneled through two physical storage controllers, read and write storms are common in a VDI environment, and user experience suffers.

Nutanix scales one node at a time, enabling an organization to expand its virtual server and desktop environment as quickly or as slowly as desired. And since every Nutanix node is a virtualized storage controller, Nutanix scales perfectly linearly with a very consistent user experience even as the environment grows.

The Nutanix Workload Sizer Tool enables partners to provide an infrastructure that is optimal for the initial virtual desktop and server environments without incurring a lot of additional cost for projected capacity. Partners can repeatedly use the tool as customers expand their environments. The customers benefit from the greater densities and from other technological enhancements that take place as time passes. The Nutanix Workload Sizer also provides a visual representation of how the entire solution fits in one or many racks, thereby helping with quick planning without having to resort to Visio based layouts.

How will the Nutanix Workload Sizer Tool Make Partners More Money?

The Workload Sizer Tool enables partner representatives to engage in web-scale planning without the requirement for in-depth technical knowledge. They can easily produce a recommended configuration, and pricing, for any server or application implementation that their customers might consider.

This simple approach to virtualization makes it evident to customers that, with Nutanix, they can get going on virtualization initiatives without the huge cost and risk inherent in conventional server and storage back-end solutions.

Partners make more money not just from selling Nutanix, but from the entire stack including virtualization software, associated hardware, consulting services, project management, managed services, and so on. Partners are also able to engage consulting expertise from Nutanix Global Services in helping design, build and manage sized environments.

The Workload Sizer Tool helps shorten sales cycles, but it also indirectly leads to higher revenues. Customers quickly discover the exceptional simplicity, scalability and resiliency of Nutanix web-scale converged infrastructure, and tend to start expanding to other use cases such as private cloud, active/active datacenters, big data and consolidated remote office management. Partners can often charge higher rates for these more specialized services.

If you are interested in using the Nutanix Workload Sizer Tool, please be sure to register for one of our seminars tomorrow. And please provide us with your feedback going forward as well as let us know about any additional features you’d like to see.

[UPDATE]  See Also:

Nutanix Releases New Sizer Tool. 11/15/2014. Adam Armstrong.  Storage Review

Today’s disruption news: Web-scale vs. 3-Tier infrastructure

Steve Kaplan , , , , ,

Two good articles were published today. The first, from ZD Net, is titled, Enterprise tech vendors: Sizing up the next gen field.  The article talks about the upcoming reshuffling of the enterprise stack. While tech buyers named VMware, Cisco and Microsoft as the three most important vendors over the next three years, EMC was ranked second to last.

EMC Struggle 1 0

Nutanix got a mention, along with “Pure Storage and/or Tintri” as one of the “key vendors that are likely to get some play as the next-gen tech pecking order forms in the next two to three years.”

The second article worth reading is Top technological trends hitting the datacenter soon in SearchDataCenter.  Slide #3 is titled, “Web-scale IT evolves data centers”.  While the slide disappointingly doesn’t discuss web-scale converged infrastructure, it does highlight the importance of adopting cloud-like technologies to the datacenter.

The VCE dissolution: here comes channel disruption

Steve Kaplan , , , , , , , , , , ,

“Partnering is more difficult than acquisitions…Most strategic coalitions have a very high failure rate, worse than acquiring, and yet as a company, we’ve all three been able to do this.”
-John Chambers, 2009

The waves of disruption are starting to break.

Several magazines (see Sources) reported today that EMC is folding VCE into its business and buying out most of Cisco’s stake. Assuming this is true (EMC is having a big announcement tomorrow morning), it is another huge indicator of the massive datacenter disruption that’s coming. While I think that EMC will certainly still promote Vblocks, it’s hard to imagine that they’ll do so as enthusiastically as they did in conjunction with VCE.

Selling Vblocks

VCE has been on a $1.8 billion run rate. Vblock partners tend to love the product because they make a lot of money from selling, installing and upgrading it. One VCE partner told me that every time VMware upgrades vSphere, customers have to upgrade their Vblocks. This is a laborious process often requiring a team of consultants working up to three days to accomplish. It translates to great services business.

I have to admit, I was surprised at how well VCE has done during the past five years. When I initially heard about Acadia (as VCE was initially called), I thought that there was no way this product was going to sell. The idea of getting the server, storage and networking folks to all come together at the same time and agree upon a common platform purchase seemed to be an insurmountable challenge. A year later I was still somewhat skeptical. I even wrote a blog post about the sales incentive problems with misaligned quarter endings.

But I misjudged the desperation many IT staffs felt as they increasingly virtualized their datacenters. They faced huge challenges in deployment time, finger pointing between server and storage manufacturers, and in functional group collaboration. The topnotch salespeople from VCE, along with channel partner support, convinced many of them that “the world’s most advanced converged infrastructure” was an answer to their struggles.

pastedGraphic

Working for a channel partner that moved a whole a lot of both Cisco UCS and EMC, I jumped on the Vblock bandwagon and helped facilitate a fair number of sales utilizing ROI analysis. But I always felt that there had to be a more elegant solution to the challenges of hosting a virtualized datacenter than simply integrating separate products as a single SKU. Once I learned about the Nutanix web-scale architecture, I became convinced that this was a vastly superior alternative.

Channel Implications

A Taneja Group report comparing Nutanix with VCE (sponsored by Nutanix) was just released today. The report states, “Taneja has found that the majority of VCE customers adopted Vblocks because they already had active VCE or VCE-partner sales teams coming at them.”

It will be interesting to see how Vblock partners fare without the huge VCE focus and assistance. On the plus side, it’s almost a certainty that they’ll no longer have to promote Cisco’s ACI over VMware’s NSX. On the negative, they can say goodbye to the monetary incentives from the recently established joint channel program between EMC and Cisco.

Not surprisingly, I’d like to see more Vblock partners get on board with web-scale. In my opinion, selling Vblocks in comparison to selling Nutanix is like pushing rope. Even some die-hard very large Vblock customers have now started migrating to web-scale.

The Taneja Group report says it well, “We believe that even data centers that are happy enough with converged systems today will look to hyperconverged systems tomorrow. Better yet, instead of investing in a traditional convergence solution, businesses should consider going directly to a next-generation solution like Nutanix.”

Sources:

Cisco Said to be Selling Most of VCE Stake to EMC. 10/22/2014. Bob Brown. Computerworld.

Report: EMC to Take a Bigger Role in VCE as Cisco Reduces Stake. 10/21/2014. Barb Darrow. Gigamom.

The End of Pretend? Cisco Looks to Partially Exit VCE Joint Venture. 10/21/2014. Ben Kepes. Forbes.

EMC Said to Absorb VCE Joint Venture as Cisco Reduces Stake. 10/21/2014. Dina Bass & Peter Burrows. Bloomberg.

Tech Titans Unite for Private Cloud Push. 11/05/2009. Jennifer Kavur. IT World Canada.

http://www.itworldcanada.com/article/tech-titans-unite-for-private-cloud-push/40087

Channel Disrupt – an Introduction

Steve Kaplan , , , , , , , , , ,

“It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is most adaptable to change.”
-Charles Darwin

I’ve headed up channel sales for the Americas at Nutanix for 19 months now, but previously worked on the partner side of the IT infrastructure channel for 25 years. During that time, I saw a lot of disruptive technologies such as Ethernet, VoIP, the Internet, etc. But from a datacenter standpoint, nothing came close to the impact of virtualization.

VMware’s introduction of vMotion 11 years ago turned out to be an incredible boon to the IT channel. Solutions providers grew in both number and size as they helped organizations across the globe to virtualize their data centers through the acquisition of high-end hosting servers, SANs and switch fabrics.

Many VARs, especially the larger ones, were reluctant to fully embrace VMware’s revolutionary technology. But they were fortunate in that virtualization spread surprisingly slowly; they generally had time to adapt. The VMware consultancy I ran, for example, was purchased after only three years in business by a much larger publicly-traded Cisco partner desperate to quickly acquire virtualization expertise.

Today’s disruptive climate is dramatically different. Rather than enjoying an exploding increase in purchases of traditional datacenter hardware, solutions providers are going to see the opposite take place. And the timeframe is going to be very fast.

Consider:

  • Web-scale technology, as introduced to the enterprise by Nutanix three years ago, has gained exceptionally fast mind share across the globe including an OEM offering by Dell.
  • VMware has introduced its own hyper-scale technology, EVO:Rail, that competes with both its long-term storage partners and with parent company, EMC.
  • HP is jumping on the hyper-converged bandwagon both with EVO:Rail and with an updated version of its Left-Hand Networks. And it’s splitting off half of its business in order to focus on the enterprise space.
  • EMC, the leading storage manufacturer, has been seeking to be acquired.
  • VCE, the leading player in the so-called “converged infrastructure” space has increasing animosity among two of its primary partners, and Cisco is rumored to have turned off the financial spigot.
  • AWS is making big strides as they work to take away everyone’s hardware business.

According to IDC, the total server and storage market is now over $70B annually. An incredible $56B of this business is done by only seven vendors (eight once Lenovo’s purchase of IBM’s server business is reflected): EMC, HP, IBM, Dell, NetApp, Oracle and Cisco. Most of this revenue flows through channel partners.  As the status quo business decreases, resellers are going to have to react very quickly to compensate.

Manufacturer 2014 Server Revenue
(in millions – annualized)		 2014 Storage Revenue
(in millions – annualized)		 Total
(in millions)
HP $12,776 $2,384 $15,160
IBM $11,888 $2,848 $14,736
Dell $8,332 $1,700 $10,032
EMC –
$7,056
 $7,056
NetApp –
$3,060
 $3,060
Oracle
$2,948
 – $2,948
Cisco
$2,908
 – $2,908
Subtotal $38,852 $17,048 $55,900
Hitachi
–
 $1,492 $1,492
ODM Direct $3,340
–
 $3,340
Others $8,084 $4,940 $13,024
Total $50,276 $23,480 $73,756

Putting the Customer Second

All solutions providers say that they have their customers’ best interests at heart. But infrastructure VARs are typically dependent upon a few, or less, of the handful of leading datacenter manufacturers for most of their business.

The VARs make significant investments in trainings for both salespeople and technical folks. They work to obtain both individual and organizational certifications. They attend manufacturer conferences, engage in manufacturer led demand-generation events, and develop close relationships with their manufacturer partners. In return, the resellers receive Marketing Development Funds, access to sales and engineering resources and, most importantly, opportunities.

This channel structure has worked quite well since the early days of IBM-initiated solutions integrators, and many reseller organizations are now doing hundreds of millions or even billions of dollars in annual revenues. But the channel structure can often make it challenging to put customer advocacy ahead of manufacturer loyalty.

When a manufacturer, for example, introduces a partner into a new account, that partner has to push the manufacturer’s products regardless of whether or not the technology is the best fit. Introducing a competitive product would spell the death knell for receiving future opportunities.

Partners of the leading datacenter incumbents need to be careful even in their existing accounts of mentioning one of the newer disruptive technologies as an option. The partner will typically position it, if at all, only in situations where the incumbent either lacks a competitive product or is not likely to notice. The alternative is to risk the potential wrath of the datacenter giant.

So while a channel partner will privately often concede that, say, web-scale infrastructure makes a lot more sense for a virtualized datacenter than a Vblock, it can’t even bring up this option to the customer for fear of jeopardizing its large Cisco and EMC revenue streams. The manufacturer  relationships supersede the customer’s best interest.

In Boldness There’s Opportunity

Ray Noorda of Novell used to tell his partners, “In mystery, there’s margin”.  Today’s corollary might be, “In boldness, there’s opportunity”. The handful of infrastructure giants are selling virtualized organizations tens of billions of dollars worth of equipment that was designed and optimized for a physical datacenter.

Enterprising channel partners have an extraordinary opportunity to educate clients and prospects about the advantages of web-scale converged infrastructure. Not only is the revenue and profit potential vast, but they can also differentiate themselves from the pack as innovative, forward-thinking, and as leaders in integrating cloud technologies.

Sources
Weak Demand for Storage Systems…as Worldwide External Disk Storage Systems Revenue Falls for Second Consecutive Quarter.  09/05/2014. IDC Press Release.
Server Refresh Cycle Propels Industry Forward in Q2. 08/27/2014. Charlie Osborne. ZDNET.