Nutanix On Collision Course With SMB HCI Vendors

Nutanix has gone down-market with its new Xpress product line, which it says is “designed to bring the power of the Nutanix enterprise cloud platform to small and medium businesses (SMBs).” This is a curious development, particularly given Nutanix’s aggressive positioning as a “web-scale” company.

Just under a year ago, Nutanix released its own Acropolis hypervisor, an alternate hypervisor to [entity display=”VMware's” type=”organization” subtype=”company” active=”true” activated=”true” deactivated=”false” key=”vmware” ticker=”VMW” exchange=”NYSE” natural_id=”fred/company/5897″]VMware’s[/entity] vSphere that had been the main hypervisor used by Nutanix. Having its own hypervisor means Nutanix can keep more margin to itself, instead of sharing with [entity display=”VMware” type=”organization” subtype=”company” active=”false” activated=”false” deactivated=”true” key=”vmware” ticker=”VMW” exchange=”NYSE” natural_id=”fred/company/5897″]VMware[/entity], which aids profitability in its run to an IPO. The company filed its S-1 back in December 2015, but things have gone quiet since then as the market has softened, and it’s unclear when the IPO might eventually be.

Acropolis is based on the KVM hypervisor, and this is where things start to get murky.

Scale Computing also sells a hyperconverged infrastructure appliance with a hypervisor based on KVM. Unlike Nutanix, Scale has been consistent in marketing itself as for the SMB market for many years. Other analysts and commentators have praised Scale’s focus on this market and it appears to be largely paying off for the company. Scale co-founder Jason Collier told me they had over 1500 customers, “coming up on 1600 customers”, but only just under one hundred staff. Scale Computing recently unveiled new, all-flash versions of their HC3 product line which boost the I/O performance of the platform, but it remains firmly aimed at the SMB market.

“SMB is our focus,” said Scale Co-Founder Jason Collier. “We saw it as an under-served market, and we wanted to develop products that we wanted to use, because we were those small to mid-size folks.”

Then there’s SimpliVity, which recently made headlines with its appearance on HBO’s Silicon Valley as the [entity display=”Box” type=”organization” subtype=”company” active=”true” activated=”true” deactivated=”false” key=”box” natural_id=”fred/company/102487″]Box[/entity]. (Pure Storage had previously made an appearance on the show. What is it with storage companies and TV shows?) SimpliVity also sells hyperconverged infrastructure, but it has a fancy accelerator card as well as fancy software on commodity hardware, and also sells into the higher end of the SMB market, as well as enterprise.

And then we get into the plethora of other companies also doing HCI in the mid-market: Pivot3, which just bought Nexgen (which spun out of [entity display=”SanDisk” type=”organization” subtype=”company” active=”true” activated=”true” deactivated=”false” key=”sandisk” ticker=”SNDK” exchange=”NASDAQ” natural_id=”fred/company/3735″]SanDisk[/entity] earlier this year) which is growing strongly.

Not to mention [entity display=”VMware's” type=”organization” subtype=”company” active=”false” activated=”false” deactivated=”true” key=”vmware” ticker=”VMW” exchange=”NYSE” natural_id=”fred/company/5897″]VMware’s[/entity] VSAN, which recently released version 6.2 which added many of the features that analysts decried as missing, making the product much more compelling than earlier versions.

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