>> From theCUBE studios in Palo Alto in Boston bringing you data driven insights from theCUBE and ETR. This is breaking analysis with Dave Vellante. >> Despite fears of inflation, supply chain issues skyrocketing energy and home prices and global instability caused by the Ukraine crisis CIOs and IT buyers continue to expect overall spending to increase more than 6% in 2022. Now, while this is lower than our 8% prediction that we made earlier this year in January, it remains in line with last year's roughly six to 7% growth and is holding firm with the expectations reported by tech executives on the ETR surveys last quarter. Hello and welcome to this week's wiki bond cube insights powered by ETR in this breaking analysis, we'll update you on our latest look at tech spending with a preliminary take from ETR's latest macro drill down survey. We'll share some insights to which vendors have shown the biggest change in spending trajectory. And we'll tap our technical analysts to get a read on what they think it means for technology stocks going forward. The IT spending sentiment among IT buyers remains pretty solid. >> In the past two months, we've had conversations with dozens of CIOs, chief digital officers data executives, IT managers, and application developers, and across the board, they've indicated that for now at least their spending levels remain largely unchanged. The latest ETR drill down data which will share shortly, confirms these anecdotal checks. However, the interpretation of this data it's somewhat nuanced. Part of the reason for the spending levels being you know reasonably strong and holding up is inflation. Stuff costs more so spending levels are higher forcing IT managers to prioritize. Now security remains the number one priority and is less susceptible to cuts, cloud migration, productivity initiatives and other data projects remain top priorities. >> So where are CIO's robbing from Peter to pay Paul to focus on these priorities? Well, we've seen a slight uptick in certain speculative. IT projects being put on hold or frozen for a period of time. And according to ETR survey data we've seen some hiring freezes reported and this is especially notable in the healthcare sector. ETR also surveyed its buyer base to find out where they were adjusting their budgets and the strategies and tactics they were using to do so. Consolidating IT vendors was by far the most cited tactic. Now this makes sense as companies in an effort to negotiate better deals will often forego investments in newer so-called best of breed products and services, and negotiate bundles from larger suppliers. You know, even though they might not be as functional, the buyers >> can get a better deal if they bundle together from one of their larger suppliers. Think Microsoft or a Dell or other, you know, large companies. ETR survey respondents also cited cutting the cloud bill where discretionary spending was in play was another strategy or tactic that they were using. We certainly saw this with some of the largest snowflake customers this past quarter. Where even though they were still growing consumption rapidly certain snowflake customers dialed down their consumption and pushed spending off to future quarters. Now remember in the case of snowflake, anyway, customers negotiate consumption rates and their pricing based on a total commitment over a period of time. So while they may consume less in one quarter, over the lifetime of the contract, snowflake, as do many other cloud companies, have good visibility on the lifetime value of a deal. Now this next chart shows the latest ETR spending expectations among more than 900 respondents. The bars represent spending growth expectations from the periods of December, 2021 that's the gray bars, March of 2022 survey in the blue, and the most recent June data, That's the yellow bar. So you can see spending expectations for the quarter is down slightly in the mid 5% range. But overall for the year expectations remain in the mid 6% range. Now it's down from 8%, 8.3% in December where it looked like 2022 was going to really be a breakout year and have more momentum than even last year. Now, remember this was before Russia invaded Ukraine which occurred in mid-February of this year. So expectations were a little higher. So look, generally speaking CIOs have told us that their CFOs and CEOs have lowered their earnings outlooks and communicated that to Wall Street. They've told us that unless and until these revised forecasts appear at risk, they continue to expect their budget levels to remain pretty constant. Now there's still plenty of momentum and spending velocity on specific vendor platforms. Let's take a look at that. >> This chart shows the companies with the greatest spending momentum as measured by ETRs proprietary net score methodology. Net score essentially measures the net percent of customers spending more on a particular platform. That measurement is shown on the Y axis. The red line there that's inserted that red dotted line at 40%, we consider to be a highly elevated mark. And the green dots are companies in the ETR survey that are near or above that line. The X axis measures the presence in the data set, how much, you know sort of pervasiveness, if you will, is in the data. It's kind of a proxy for market presence. Now, of course we all know Kubernetes is not a company, but it remains an area where organizations are spending lots of resources and time particularly to modernize and mobilize applications. Snowflake remains the company which leads all firms in spending velocity, but as you'll see momentarily, despite its highest position relative to everybody else in the survey, it's still down from its previous levels in the high seventies and low 80% range. AWS is incredibly impressive because it has an elevated level but also a big presence in the data set in the survey. Same with Microsoft, same with ServiceNow which also stands out. And you can see the other smaller vendors like HashiCorp which is increasingly being seen as a strategic cross cloud enabler. They're showing, spending momentum. The RPA vendors you see in there automation anywhere and UI path are in the mix with numerous security companies, CrowdStrike, CyberArk, Netskope, Cloudflare, Tenable Okta, Zscaler Palo Alto networks, Sale Point Fortunate. A big number of cybersecurity firms hovering at or above that 40% mark you can see pure storage remains elevated as do PagerDuty and Coupa. So plenty of good news here, despite the recent tech crash. So that was the good, here's the not so good. So >> there is no 40% line on this chart because all these companies are well below that line. Now this doesn't mean these companies are bad companies. They just don't have the spending velocity of the ones we showed earlier. A good example here is Oracle. Look how they stand out on the X axis with a huge market presence. And Oracle remains an incredibly successful company selling to high end customers and really owning that mission critical data and application space. And remember ETR measures spending activity, but not actual spending dollars. So Oracle is skewed as a result because Oracle customers spend big bucks. But the fact is that Oracle has a large legacy install base that pulls down their growth rates. And that does show up in the ETR survey data. Broadcom is another example. They're one of the most successful companies in the industry, and they're not going after growth at all costs at all. They're going after EBITDA and of course ETR doesn't measure EBIT. So just keep that in mind, as you look at this data. Now another way to look at the data and the survey, is exploring the net score movement over the last period amongst companies. So how are they moving? What's happening to the net score over time. And this chart shows the year over year >> net score change for vendors that participate in at least three sectors within the ETR taxonomy. Remember ETR taxonomy has 12, 15 different segments. So the names above or below the gray dotted line are those companies where the net score has increased or decreased meaningfully. So to the earlier chart, it's all relative, right? Look at Oracle. While having lower net scores has also shown a more meaningful improvement in net score than some of the others, as have SAP and Teradata. Now what's impressive to me here is how AWS, Microsoft, and Google are actually holding that dotted line that gray line pretty well despite their size and the other ironically interesting two data points here are Broadcom and Nutanix. Now Broadcom, of course, as we've reported and dug into, is buying VMware and, and of, of course most customers are concerned about getting hit with higher prices. Once Broadcom takes over. Well Nutanix despite its change in net scores, in a good position potentially to capture some of that VMware business. Just yesterday, I talked to a customer who told me he migrated his entire portfolio off VMware using Nutanix AHV, the Acropolis hypervisor. And that was in an effort to avoid the VTEX specifically. Now this was a smaller customer granted and it's not representative of what I feel is Broadcom's ICP the ideal customer profile, but look, Nutanix should benefit from the Broadcom acquisition. If it can position itself to pick up the business that Broadcom really doesn't want. That kind of bottom of the pyramid. One person's trash is another's treasure as they say, okay. And here's that same chart for companies >> that participate in less than three segments. So, two or one of the segments in the ETR taxonomy. Only three names are seeing positive movement year over year in net score. SUSE under the leadership of amazing CEO, Melissa Di Donato. She's making moves. The company went public last year and acquired rancher labs in 2020. Look, we know that red hat is the big dog in Kubernetes but since the IBM acquisition people have looked to SUSE as a possible alternative and it's showing up in the numbers. It's a nice business. It's going to do more than 600 million this year in revenue, SUSE that is. It's got solid double digit growth in kind of the low teens. It's profitability is under pressure but they're definitely a player that is found a niche and is worth watching. The SolarWinds, What can I say there? I mean, maybe it's a dead cat bounce coming off the major breach that we saw a couple years ago. Some of its customers maybe just can't move off the platform. Constant contact we really don't follow and don't really, you know, focus on them. So, not much to say there. Now look at all the high priced earning stocks or infinite PE stocks that have no E and divide by zero or a negative number and boom, you have infinite PE and look at how their net scores have dropped. We've reported extensively on snowflake. They're still number one as we showed you earlier, net score, but big moves off their highs. Okta, Datadog, Zscaler, SentinelOne Dynatrace, big downward moves, and you can see the rest. So this chart really speaks to the change in expectations from the COVID bubble. Despite the fact that many of these companies CFOs would tell you that the pandemic wasn't necessarily a tailwind for them, but it certainly seemed to be the case when you look back in some of the ETR data. But a big question in the community is what's going to happen to these tech stocks, these tech companies in the market? We reached out to both Eric Bradley of ETR who used to be a technical analyst on Wall Street, and the long time trader and breaking analysis contributor, Chip Symington to get a read on what they thought. First, you know the market >> first point of the market has been off 11 out of the past 12 weeks. And bare market rallies like what we're seeing today and yesterday, they happen from time to time and it was kind of expected. Chair Powell's testimony was broadly viewed as a positive by the street because higher interest rates appear to be pushing commodity prices down. And a weaker consumer sentiment may point to a less onerous inflation outlook. That's good for the market. Chip Symington pointed out to breaking analysis a while ago that the NASDAQ has been on a trend line for the past six months where its highs are lower and the lows are lower and that's a bad sign. And we're bumping up against that trend line here. Meaning if it breaks through that trend it could be a buying signal. As he feels that tech stocks are oversold. He pointed to a recent bounce in semiconductors and cited the Qualcomm example. Here's a company trading at 12 times forward earnings with a sustained 14% growth rate over the next couple of years. And their cash flow is able to support their 2.4, 2% annual dividend. So overall Symington feels this rally was absolutely expected. He's cautious because we're still in a bear market but he's beginning to, to turn bullish. And Eric Bradley added that He feels the market is building a base here and he doesn't expect a 1970s or early 1980s year long sideways move because of all the money that's still in the system. You know, but it could bounce around for several months And remember with higher interest rates there are going to be more options other than equities which for many years has not been the case. Obviously inflation and recession. They are like two looming towers that we're all watching closely and will ultimately determine if, when, and how this market turns around. Okay, that's it for today. Thanks to my colleagues, Stephanie Chan, who helps research breaking analysis topics sometimes, and Alex Myerson who is on production in the podcast. Kristin Martin and Cheryl Knight they help get the word out and do all of our newsletters. And Rob Hof is our Editor in Chief over at siliconangle.com and does some wonderful editing for breaking analysis. Thank you. Remember, all these episodes are available as podcasts wherever you listen. All you got to do is search breaking analysis podcasts. I publish each week on wikibon.com and Siliconangle.com. And of course you can reach me by email at david.vellante@siliconangle.com or DM me at DVellante comment on my LinkedIn post and please do check out etr.ai for the best survey data in the enterprise tech business. This is Dave Vellante for the CUBE insights powered by ETR. Stay safe, be well. And we'll see you next time. (soft music)

>> From our studios in the heart of Silicon Valley, Palo Alto, California. This is a CUBE Conversation. >> Hello everyone, welcome to this special CUBE Conversation here in Palo Alto California, theCUBE headquarters. I'm John Furrier, host of theCUBE. We're here with Dheeraj Pandey CEO and Founder of Nutanix. Great guest, been with us for 10 years. Was on the cube in 2010 when we first started doing theCUBE coverage of events was at VMworld, Dheeraj, great to see you. >> Pleasure. >> Thanks for coming in. >> Thank you. >> You've had such a great journey. I've been so impressed with you as an entrepreneur, the hustle, the early days when you were misunderstood to the growth and going public and continuing to compete. Congratulations to you and your team. It's been great. >> Thank you, no, it's been a journey and it's going to continue to be a journey. >> A lot of competitive pressure. A lot of cloud happening, a lot of server dynamics in the marketplace with On-Premise now getting validated as a part of this multi-cloud hybrid equation, certainly not going away, but still growth of the cloud has been huge. What's the big focus, 'cause you have your Nutanix Next conference coming up in May. I'll be there with theCUBE, what's the focus, what is the theme of the event? What's the big focus? >> Yeah, no, in fact we complete 10 years this September, so it's a decade since the beginning of time for Nutanix. And we are focusing on the things that we're good at. We are good at what I call the three D's. So it's a three D view of the company. The first D's data, we are really good at data. And we're doubling down on data. We're very good at design, we've done a very good job of simplification making elegant consumer grade and taking clicks away rather than things taking months, how can it be done in seconds and hours, and we're very good at delivery, you know, the third D being delivery, you know, it's not just delivery of our software through all different form factors and our appliance and software and subscription and other servers, but also customer support, customer success, which has really endeared us to our customers. So if you think about what this conference is all about, obviously it's about the customers and as the power of social proof, the fact that they learn from each other and we learn from them. But it's really about reinforcing the three D's. Data, design, and delivery. >> And the theme is invisible clouds. Period, visible IT, invisible cloud, so I'm assuming that's, make that, abstract that away, multi-cloud in there, probably a theme. Visible IT, that's supposed to be invisible too, but what does that mean? I get the invisible cloud 'cause you want to make it seamless, multi-cloud, hybrid cloud. But what's visible IT, how do those words play? What's the play on words there? >> Yeah, I mean, you know, we, first of all the word invisible is really powerful and we use it a lot and it's very unique to Nutanix, you know, not everybody uses the word invisible as much as we do, but the idea is that machines should become invisible. Software and systems and tools and those things should become invisible. And then humans should become visible and by the way, there's this really good antithesis, sort of the polar opposites of machines versus humans that goes on in many other walks of life, I mean zero trust when it comes to security. Machines should not trust each other. But full trust, when people need to trust people. So when it's an organization of people you need to be the opposite of zero trust. Same thing is true for invisible machines invisible clouds with visible people visible careers and I think what's happening is that as the cloud hype cycle actually matures, CIOs are talking about cloud cloud cloud, but the grassroots is basically saying like do you even know the legacy apps of the last 20 years? Do you understand the challenges of what we call the laws of the land? Data compliance and regulations, laws of physics which is the gravity of data and the gravity of people and operations and laws of economics, owning and renting. So I think what's happening is that the cloud revolution is really being dug like a Eurotunnel, from two sides. Top down from C-level people are saying let's go transform ourselves to the cloud. And we are helping the grassroots really go and translate that, say look, this is only possible by doing these things because we have to be respectful of data sovereignty, data gravity, and applications and the economics of that. So, in really helping the CIOs build trust with the grassroots. As opposed to-- So essentially, you're operational as a cloud 'cause I can hear. We've interviewed a lot of CXOs on theCUBE as you know, take that hill, go to the cloud, move everything to the cloud. Wait a minute, we got, we're closing a pin. So to make sense of that vision, it's got to be operationalized, that's kind of what you're getting at. >> Absolutely, absolutely. And then finally there's a, I mean look what happens in computing, we make things smaller all the time, you know, we started with mainframes and we ended up with serverless. And along the way we had obviously Unix and x86 and container, VMs and containers and so on. Same thing with personal computing. We started with desktops and we ended up with wearables. So the fact that there's a billion dollar data center is the new mainframe. The fact that there's going to be a big cloud data center only two places in a big country is actually quite the antithesis of computing, we have to make cloud be everywhere and make it about software. To operationalizing the cloud and making it into a half a trillion dollar market will be about software. >> This whole mainframe is in the cloud or mainframe distributing computing. Software industry kind of come back in vogue. It doesn't go away, it's all the same game. It's just distributed out around in different formats, that's kind of what's going on here. >> Absolutely, I mean go back in time to distribution. Apple was a vertically integrated stack. So how does Microsoft come and really compete against Apple, they said look PC is about software, they said look PC's not about hardware, it's about software and the market becomes 10 times larger because they really bring in other partners who make money with the Windows Operating System. >> That's just more enabling. There's more demand, there's more growth. >> Absolutely, and the same thing happens again 15 years later with iOS versus Android. So Apple says smartphone is about vertically integrated stack, and Google comes and says no, to make the market 10 times larger, Android is about software. And then other handset manufacturers come and make money, so cloud is at this juncture where to take it beyond, 50, 60 billion dollars to half a trillion dollars, it has to be about software. >> Dheeraj, one of the things that I'm impressed with with you as an entrepreneur and your team is you fit the profile of the classic big idea. Be different, have good product leadership and pick a way that's going to have a big, totally adjustable market. You did that and you didn't waver, so I reviewed your analyst meeting from Wikibon and involved third party analysts. A hundred billion dollar addressable market. So big market, check, private cloud trend which you called early and Stu Miniman also called that on Wikibon is not going away, you have a stack for that. Large customer base, you have what 12 thousand customers plus and growing. Great revenue, strong revenue, and you got refreshes coming because the technology continues to shift in the wave that you're on. So, congratulations, that's good health meters. But there's now competitive pressure. The genie's out of the bottle. People know what you're doing. They figured it out and they're going to try to compete with you. This economy of scale that you have there's economy of scales others have specifically Dell, Dell EMC, VMware have been highly competitive with you. How are you responding to that and what's the landscape look like? >> Yeah, look, we've always been about disrupting ourselves, and that's the way we've actually grown our company. Very contrarian way of thinking about it but if we go back in time four, five years ago we're an appliance company, and we said we're going to do an OEM relationship with Dell and then Lenovo and others. All of a sudden people started competing with yourself, and for us it was like the more we compete with ourselves the better it is, today I think if you think about where the company's real response to any competition is to really compete with ourselves. I typically don't get wavered or changed by what's out there, we don't compete with anybody else, if we can keep competing with ourselves and get better in solving our customers and those three D's I talked about being even deeper in data, that VMware can't even touch us on simply because they have to compete with EMC on that and I don't know whether they actually have the gumption to do that, we do actually. We have to be better at design. Make the control plane even simpler. Understand what it means to virtualize the cloud. And get better at delivery, so if we can keep getting better in the three D's and we can keep competing with ourselves. We just did a really good announcement at HPE where we're going to compete with ourselves one more time because-- >> Talk about that announcement 'cause I think this is different. So HPE bought Nimble Storage so they already got the storage piece. They've got tons of servers, they also compete with Dell, what's your position with HPE, what's the announcement? What's the partnership? >> Yeah, so we're going to do a two-way relationship where we're going to be able to our sellers can quote HP servers and their sellers can actually quote our operating system. We have this rainbow which we call core essentials enterprise, Nutanix Core which is about hyper-convergence. Modernize your infrastructure. Nutanix Essential which is how we build a private cloud, and then Nutanix Enterprise which is really about navigating and simplifying the multi-cloud journey of the customer. And HP's going to take this stack to its customers. Again, we started to compete with ourselves because our appliance business was not based on HP, but now it will. Similarly, they will compete with themselves. And that's how companies transform themselves. When they compete with themselves rather than somebody else. >> And it's always the old expression, eat your own before your competition does. That's a cannibalization, kind of MBA concept. You guys are aggressive on that. You don't mind doing that and taking that risk. >> No, in fact if you don't do it, someone else will. It's better to do it in the controlled way ourselves. >> Got great, great management styles. So let's talk about, you mentioned control plane earlier, you have a quote on your deck that says, that I reviewed, it says control plane matters, this speaks to some of the product leadership. What does that actually mean, the control plane message, 'cause we hear this a lot come up in multi-cloud hybrid, and certainly within the data conversation around data control planes, control planes. For you guys, what does that mean? Control plane matters? >> Well if you take back like 10 years ago. We were very bold and audacious. We were the only company to say look we will not be building a tab in vCenter. Contrarian, highly contrarian. Most people said you'll lose a lot of deals because you are not adjunct to vCenter. You're not a tab in vCenter, every hardware renderer was really bending over backwards to please VMware because that was the only way to the heart of the virtualization administrator. We took a very different stance. Prism was the control plane, they said if you do a really good job at Prism make it a distributed scale out platform. Make it consumer grade one click delight. Then customers will actually look at this as a very powerful thing, and then we virtualized the hypervisor. So Prism was a multi hypervisor platform. It worked for Vmware, it worked for Hyper-V and it worked for Nutanix AHV. So over time, we just kept doing more of it. So now we have a control plane for multi-cloud. We were saying look, the world does need an automation orchestration engine. That is multi-cloud come is that thing for us. We've taken Prism to the next level with Prism Pro which is about ML and AI and what does it mean to really do operations management and capacity planning and security and analytics. So, we've doubled down on design which is the second D that I talked about with these control planes and going forward and as you see us getting to multi-cloud desktop delivery, we acquired a company almost a year ago, which is really about a cloud native desktop delivery solution where, now the control plane of desktops could belong in the cloud but the desktop itself could be running on prem. And that's a very powerful concept that you can have these cloud enabled cloud holstered cloud serviced control planes but the data place could actually be anywhere. It could be running-- This is the invisible cloud concept you're talking about. Absolutely, yeah. In fact the fact that the controller could be running anywhere, and the thing it controls could be running someplace else. >> The question, that's great stuff and that's great product leadership and again, invisible cloud, people don't want to deal with multiple code bases They want to have seamless operations. So with that I got to ask you your cloud positioning because every enterprise now because it's from the top end. Now it's top comparative, what's the cloud positioning because we now see on premise, super important a-du-is-ca outpost. The data's going to reside on premise in the cloud, it's all going to move around. What is the cloud positioning that you talk to your customers about when they say hey, we like Nutanix but we got to go to cloud, what's the positioning? >> Well our positioning is that cloud has to be about software. It has to seep everywhere, it has to be injected everywhere, our software should run no just on prim but in an AWS bare metal. There's a bare metal service and our software should run there. There will be an Azure bare metal. We already run in GCP metal so our software can run on top of GCP as well. Of course it is on prem and we are already working on our own disaster recovery as a service, desktop as a service where we become the service provider for many of these hybrid services that customers actually need from us. So cloud is about ubiquity, it's about portability, I mean the strength of any software company is portability. If we can make ourselves available in every server, every hypervisor, and every cloud, I think we've done a very good job. >> My final question I want to ask you is when you go to your event coming up invisible clouds, visible IT, you got to give the customer the 20 mile stare. You got to show 'em the 20 mile vision and the bridge to the future that they want to cross with you, that's the main value every company has to do as CEO. What is that story, what's the pitch to the customer saying we've got you covered today as you're organically building that operational cloud path, but I really want to know that I have a partner for the next generation, what's that story that you tell them? >> Yeah, I mean, even as I said before. Any big project, whether it's Panama Canal Suez Canal, Eurotunnel, you have to dig it from both sides and then you eventually shake hands and it becomes a historic picture, which is what we've known about the way the English side and the French side met. I think the way CIOs are talking about the cloud, the way grassroots is perceiving more of the cloud as you called it operationalizing. I think we really have to do it from both sides. And we really don't talk about the three D's. Data, we've done so well in data. We've done so well in design, we've done so well in delivery, and then at times we've actually screwed up like in the last two, three, four years, we might have gotten more complicated, we might have gotten more complex, so we go and even ask for forgiveness and open ourselves up, talk about the evaluability of the company and people like that, they didn't want to connect to an auto machine, but they wanted to connect to humans on this other side. As a business, we are not machines. We're actually humans, and that's what resonates in the conference. >> Dheeraj, thanks for coming in and sharing your insight, great to see you again, congratulations on the business performance, we'll see you at Nutanix Next in May, May 7th, thanks for coming in. >> Thank you, my pleasure. >> I'm John Furrier here in Palo Alto for CUBE Conversation, thanks for watching. (jazz music)

>> Live from London, England, it's theCUBE, covering .NEXT Conference Europe 2018. Brought to you by Nutanix. >> Welcome back to London, England. I'm Stu Miniman with my cohost, Eup Piscar, and we're going to dig into one of the partnerships that Nutanix have. Joining me, two CUBE alums, Michael Cade, who's a technologist with Veeam. Had you on the program last year in Nice, and welcome back a little closer to home for you, here in London. >> Yeah cheers Stu, Hidey-ho. >> And welcome, six months with Nutanix, someone I've known. CUBE alumni. So, wherever you go, you know, there are CUBE alumnis always. So Jay Chitnis, who's the head of Global Strategic Alliances with Nutanix. Jay, thanks for joining us. >> Stu, thanks for having me. It's great to be here, guys. >> Alright, first of all You know, Michael, what's it mean having the show here in London, and would love your opinion, having kind of, how Nutanix's doing with Europe adoption. >> Yeah, so, obviously being in London means I don't have to go on a plane and travel anywhere, right? So, that's one benefit, but one thing, I was there last year, obviously, we spoke. I think one of the things I can see here is how many people are here. Feel's like its doubled in numbers, doubled in size. Doubled the conversations, obviously with us, with our product coming out in July/August of this year. Only a version one but we're seeing good feedback, good strong feedback and lots of questions around that. >> Yeah absolutely, 3500 is the number I heard here. Jay, we're going to talk about with Veeam, so set the stage for us, data protection, what's going, Nutanix positioning, and what you look to that. >> Yeah, its a vibrant landscape, right? So, just to kind of pick up a little bit on the thread around the European side. We've got over 50 partners here. Over 50 technology partners and a number of channel partners. There's just a vibrant buzz and one of the first things that people always talk about is we're in the the nation of GDPR. If you start to think about just where's this nation, this notion of data and where does it reside, data mobility and that sort of thing. That's one of the first things that we get hit with all the time; we get asked a lot. And so, it's really core to what we do. That's where the relationship really comes in. >> I love the little commentary there at that GDPR. Cause I remember last year, like most of last year, every show that had data protection, everything, we talked about GDPR a lot. To be honest, once we got past May, we didn't talk about it a lot. I mean, we said we knew it's real when there were some lawsuits and that happened rather fast to some of the really large companies, but is this still a major conversation with costumers, where are we and? >> Yeah, yeah, massively so that sovereignty of data, where is resides is something that, speaking to enterprise and mid-market customers over in Europe, there absolutely still top of mind is, why are we keeping that data? Where are we keeping that data? How do we leverage our tool set to understand where that data is? And then actually provide some insight into where it is, and report against things like violations between different locations. And just, We obviously had to go through that process of becoming GDPR compliant ourselves, and obviously as a global company, you have to kind of eat your own dog food. And understand, you have to know your own data, understand what that's doing, why we're keeping that? How it's being stored, and the message we just relay back into content and let our customers then use that. >> So what does that look? Maybe from a technology perspective, if you had to deal with GDPR, from an Nutanix standpoint, from a Veeam standpoint. What does it change, right? What does it change in terms of backing up? What does it change in terms of storing it? In a cloud or on print? Have you seen any majors changes in how that works for customers? >> Yeah, so the good the is that thinking about what that data is and where it's being stored. They know that in Germany that data may not be able to leave Germany or that data may not be able to leave the UK or Ireland and they might have offices in remote locations in various different countries. So, a simple thing that we put in was the ability to put tagging on repositories, on our physical constructs so that we knew the data path and the workflow. And then be able to use then Veeam one to be able to report against that so you understood where that data was going but also flag up any of those violations that may be where a backup job has pushed it to a different location. We need to know about that and we need to fix it as fast as possible. So that's one of the areas that we're talking >> So, I can imagine that this is not only has had an impact from a technology perspective from a vendor's side, but also in the service provider market. I guess a lot of service providers have gone into that phase to be able to help customers with their GDPR issues. >> Yeah, yeah, absolutely, so we were already aligned with our VCSP program. 20,000 VCSP partners out there and their model is as a service, so being able to provide, as a service and help them understand what that data is and know where that data is residing, is key to, that those customers that can't necessarily put their workloads into the public cloud but they can put it into a trusted service provider of VCSP. >> Or a trusted, like an enterprise private cloud. Or, one of the things that we're seeing is, when you start to think about data and where it resides, it's not just the cloud. It's not a discussion of is it on prem, is it in the cloud. There's this notion about this distributed cloud, some of this stuff that we talked about earlier this morning around what does that mean when you start to think about where, first of all, the amount of data that's sitting in everything other than what we would consider an enterprise cloud. That's one. The second thing is, how do you protect it? How do you back it up? What do you do at things that at the edge, right? That requires a fundamentally different way of looking at things. Just the size and the volume of the data. >> Yeah, one of the key things that we're seeing is that sprawl of data. Not necessarily, it doesn't really matter where that data resides. Whether it is on premises or whether it's in the public cloud. It's the data and that sprawl of data that can sit on many different platforms. >> Alright, Want to pivot the conversation a little bit lets talk about AHV. So, in the earnings announcement earlier this week, the number I heard was 38% looking at the last four quarters trailing, so strong growth. I actually, when I had asked Dheeraj about two years ago and said, "okay well what's the goal?" He said "Look, we're going to keep building and do it, and customers will have choice." You know, if we get to 50%, that felt about right to him then, when I talked to him he said "This seems right." It's not like we're going to eradicate everybody's other virtualization. That's not the goal. It's to do what makes sense. I remember one of the .NEXT's when Veeam said "We're going to go down the path to adopt AHV". There are actually tears in the audience. So, we know that ecosystem is super important to AHV. So Jim, maybe set the table for us with the guideline as to where we are with the partner eco system. Obviously Veeam's got some good, exciting stuff recently. But overall? >> Look, at the end of the day, the 38% number that you mentioned is critical, right? One of the things that we look at is, this is it's, our philosophy has always been about freedom and, so, some semblance of choice. And it doesn't matter whether you have a preference for a private cloud, a public cloud, a hypervisor. What we really are focused on is, how do we enhance incremental value add, especially in a management staff, right? So it's not necessarily a, we absolutely want to become a Hypervisor company. That's not the goal here. In order to, when you look at our partner landscape, and our partner ecosystem, it kind of fits into a few things. First and foremost, it's about customers who want, when they buy Nutanix, it's because they're buying Nutanix to fit in to a certain environment. Data protection, management, management and orchestration, networking and security. And then there's obviously customers who buy Nutanix for running something on top us, right? An, ISV, and enterprise ISV, big data applications, cloud native applications and things of that nature. One of the cornerstones for that ecosystem is to support AHV and we're starting to see a significant amount of our partners, not only looking at supporting AHV but actually going further and deeper. So, we look at things in terms of the breadth of the ecosystem, which is great, we want to grow that, but we also look as the depth. And someone like Veeam, who said, "Hey look, we were partnering with you on the breadth, where we were doing some stuff around supporting ESX." But really, the game changer was AHV. AHV support which was what, August? >> Yeah, yeah, beginning of August. I think the same premise as to what you were just saying Jay, so bring that simplicity model, we don't really care about what that is sitting on top. With a management layer, we're offering this hardware up as a service, or this layer of abstraction. From a Veeam, obviously, form a Veeam perspective, it's all about the ease of use, the reliability, but also the flexibility. And that's something that we kind of have that synergistic approach. >> I think that's a very shared common vision, right? It's making sure that you provide a seamless experience. One click sort of experience. But, being able to do so in a more cohesive manner. >> Michael, I want you to bring us inside. I remember back when Veeam supported Microsoft Hyper-V. It was a big deal. There's a lot of engineering work that goes into it. And a move, Veeam was more than just a virtualization company. Today Veeam is multi-cloud, they can play in lots of environment. Give us a little insight as to what happened and what's special has been done for the interface and the technology to fully support AHV with Veeam. >> Yeah, I think, so 12 years ago, Veeam started out protecting those virtual workloads. Virtualization first, Vmware first, then Hyper-V. And then the physical agents came and really that platform started to get broadened. What then happened is the AHV adoption rate from you guys was obviously rising so saw that and went in, and, but we took a different approach in terms of, okay, just because of what we've done in a Vmware and Hyper_V world, doesn't necessarily mean that that will fit our Nutanix AHV customers. So we went out, we seeded the market, understood what that looked like, how it looked from both a Nutanix point of view and also existing AHV customers. And then built the new AHV platform that we have to be able to protect them. But we still wanted to keep that agentless approach. But from a management perspective, we offer out a web interface that allows us to look very similar to the prism interface, the management layout. So that, an admin doesn't have to shift his command stature, his knowledge of working in management into that mind set. So, version one, and again, there's a considerable amount of effort gone into that has a pretty, pretty full-on feature list of features in that version one and that's going to continue to roll out over 2019 and beyond. >> So looking at this from a customers perspective, you know, back when I built an IS platform based on Nutanix, based on VH, one of the things that was high on my list was a AVH support. Simply because AVH over hypervisor, it became a commodity. I, even as a service provider, even as an IS provider, I didn't really care what hypervisor I ran. And so, support from VM to actually be able to back up VM's on AHV, and that was top priority for me. And seeing you guys use that different UI, even though it was a little bit over shot, because you know, we've been using VM for maybe a decade already. We're used to it. A little bit of a culture shock to start using it, but when you do, it becomes a totally different experience because it is aligned with Nutanix. So maybe tell us about why you've taken that approach of using the way of integrating with the Nutanix UI instead of staying at your old UI? >> Yeah, and so exactly, so mostly around Nutanix admins and their feedback around, if we could just have another tab that looks and feels exactly how our management plane looks like. Then that would be of more of a benefit. Now, obviously we didn't feedback on replication. There's still visibility of those jobs, there's no configuration, lettered out, that's one of the biggest asks that we're getting in the forums, in the public forums, is when can we have exactly what you're asking for there. Is it around how can we bring that central management back into VBR because they may have Nutanix clusters running different hypervisors and that's all supported from us but then, but, then, now we've got to go outside of that single management interface into the prism-like management for that, so, I kind of see that from that perspective. But, so that was really the main key for version one is, get something out that's the same as what our Nutanix administrators are used to. >> So, if we're talking about future, right, so what's next for VM and Nutanix? Real short question, short answer maybe. >> Yeah, without being fired, I'm but... (Jay laughs) So, version two, update one, so 1.1. That will be out in the next few, let's say weeks, months. And that really doesn't bring any major features or changes. That's the generic bug fixes, there's a few things that needed to be ironed out in the interface but also as the process. So that will be relatively soon. Then, the good thing around the ability to develop against what we're doing with AHV, is that because it's so separate from the VBR piece. It allows us to hopefully keep that much more frequent cadence of release. So we'll be starting to see more news about version two as we get into early 2019. >> Just a last thing, wondering what you could say about adoption so far? How much pent up demand was there? You know, I'd like to hear first from the Veeam standpoint. How many customers, if you can share anything about that? And then, Jay, what this means for AHV adoption? >> So, I don't know specific numbers, up to date numbers, but I have seen the sales force numbers grow from an opportunity perspective, and that's specifically where Veeam availability and Nutanix AHV is included in that sales force opportunity. So one of the things, though, is that we're seeing, if you're familiar with the Veeam forums, that, in particular, forum thread is growing and growing because people are understanding that we can help shape what we do here, we want those customers that are using it on a daily business to give us that feedback. >> Do you expect there to be new Veeam customers due to this offering? >> Yeah, yeah, absolutely. >> Yeah, I think we absolutely expect new Veeam customers. I think at the end of the day, going back your question around AVH, having a healthy ecosystem is really what's going to drive AHV adoption. So partners like Veeam who've done that is really what is providing some choice back. So you're question around what do we expect in the next few months, quarters, what we're seeing is a lot demand on, what's the right way, We're seeing a lot more demand on additional functionality that people customers would like to add into their grate. So AHV is just the beginning of the platform. It's not the end state and then, we're starting to see is a lot of customers, partners who are taking on things like, "Oh, well that's interesting, now I can do something with files, or buckets, or add on top of it where now all of a sudden, I can derive even more value. So AHV is just step one if you will, right? >> Yeah, I think that's important as well. So we've got update four coming out early next year that's going to bring the ability to leverage the Nutanix buckets that we've heard about this week. There's also other cloud mobility, but for the option of being able to convert those machines and send the up into Azure or AWS to be able to run tests and development up there. But, that whole cloud mobility about movement of data and making it seamless using the same tool set. One of the key differentiators is the VBK format. So those who know Veeam, they use the VBK format and that's exactly the same format that the Nutanix AHV product uses as well. >> Yeah, yeah, absolutely. Well, congratulations. Really looked at, as I said, this is really opening the door to start the journey as to where your customers are going. I've been hearing feedback from customers that have been waiting for this for a while and excited to see how this matures as things go forward. So, Jay, Michael, thanks so much for joining us and stay with us, full day of coverage here at Nutanix .NEXT 2018 in London. Thanks of watching theCUBE. (electronic beat)