When good enough isn’t

“We’re throwing HCI out and going back to 3-tier.”

These words came as a bit of a shock. I had provided an analysis for a healthcare organization comparing the TCO of refreshing their legacy 3-tier architecture versus moving to an enterprise cloud. They liked the compelling value proposition of Nutanix, but their long-time datacenter vendor seduced them with a ridiculously low cost for its own HCI solution. After months of instability, they’d had enough and were now evaluating which new SAN to buy.

HCI is Rapidly Becoming the New Datacenter Standard

Back around the time when I joined Nutanix in early 2013, the leading storage manufacturers scoffed at the notion of hyperconvergence. Five years later, and every leading datacenter manufacturer with the exception of Oracle now has, or claims to have (see Welcome NetApp to HCIish) one or more HCI offerings. With 40 different HCI players, you might think that the technology is easy to develop as an enterprise-ready solution. This is simply not the case, as the healthcare organization so painfully discovered.

If you’re running a virtualized environment, you can lose a server and not miss a beat. Losing a SAN may be painful, but 3-tier enterprises often run multiple SANs and models enabling them to still hobble along. But when organizations embrace the software-defined architecture of hyperconvergence, they are in deep trouble should the environment fail.

According to IDC, hyperconvergence sales were a billion dollars last quarter with a 68% year over year growth rate. Converged infrastructure, while still ahead of HCI with $1.4B in sales, grew at only 1.3%. The writing is on the wall. This year Gartner published its first HCI Magic Quadrant covering 12 HCI manufacturers; Nutanix is positioned as a Leader based on its ability to execute and completeness of vision.

HCI Conviction

“I didn’t invent the hamburger. I just took it more seriously than anyone else…We take the hamburger business more seriously than anyone else.”                                         

    – McDonald’s founder Ray Kroc

Unlike Ray Kroc, Nutanix did invent HCI for the enterprise. A world class HCI foundation is a requirement for bringing public cloud-like agility to the enterprise datacenter. Nutanix is arguably the only HCI manufacturer with the conviction that hyperconvergence is the best architecture for even the most critical of workloads.

Continued accolades for industry-leading customer support bear witness to this conviction. This is the fourth year in a row that Nutanix’s Net Promoter Score (NPS) has averaged over 90 – compared to the technology industry average in the mid 30’s. And this is despite an explosion in Nutanix revenues from just $30M in fiscal 2013 to $767M in fiscal year 2017.

Goldman Sachs last year said that Nutanix is a, “once in a decade opportunity.”  This is my second favorite financial analyst quote. My favorite is from William Blair last July who wrote in a report on Nutanix, The firm did not find a single user with a negative comment, with the refrain being that Nutanix delivers on its promises, listens to customer needs, and provides unparalleled customer service.”

Unlike Nutanix, other HCI players tend to look at hyperconvergence as a corner case still not suitable for business-critical applications and production workloads. Even Dell/EMC/VMware who, along with Nutanix dominates the market with a combined software-based HCI market share of 70%, is reluctant to go all in with its product for demanding workloads. ComputerWeekly reported Dell EMC’s European CTO’s view as, “Customers should look to move all workloads to hyper-converged infrastructure (HCI), except mission-critical ones.”  And in a Cube interview at last year’s VMworld, VMware’s CIO said:

“No, you don’t throw out all your arrays… what you see in the market is happening in my datacenters as well…there’s more and more vSAN nodes now but you have mission-critical SAP and Oracle stuff, I don’t necessarily want to save dollars, I want something that is mission-critical, proven, ready, certified, etc. So, the other things don’t go away.”


“Imagine,” I said to the health care company looking to go back to a SAN, “That it’s 2005 and you were considering virtualizing your physical servers using the hypervisor of a relatively young company called VMware. But your long-time datacenter supplier, Microsoft, gives you Virtual Server (Hyper-V predecessor) for a much lower cost so you go with that instead. Perhaps your experience with Virtual Server in those early days of virtualization fails to meet your expectations in terms of reliability or performance – would you then conclude that this whole virtualization thing makes no sense and go back to physical servers? Because that is exactly what you’re about to do with hyperconvergence.”

Fortunately, the healthcare org instead deployed Nutanix – and they’ve been very happy with the results. The manufacturer of their first HCI solution refused to provide them boxes in which to send back their product. The CIO sent me a picture of the old nodes packed up in his Nutanix boxes.

Disclaimer: The views expressed in this blog are those of the author and not necessarily those of Nutanix, Inc. or any of its other employees or affiliates.

See Also

In Customer Service, It’s Little Things That Matter. 04/02/2018. David Sangster. Nutanix.
Nutanix Aims to Bridge HCI and Cloud with Acquisitions. 03/14/2018. Steve McDowell. Forbes.

IDC: hyper-converged platforms outgrows converged infrastructures. 02/28/2017. Gary Franz. SearchStorage.com.

How do You Win at HCI? It’s SimpliVity…or Maybe Not, Right Dell? 02/12/2018. Chris Mellor. The Register.

Here’s Who Made Gartner’s 2018 Magic Quadrant For Hyper-Converged Infrastructure. 02/12/2018. Mark Haranas. CRN.

Who’s King of the Hyperconverged Castle? Dell or Nutanix? It’s not as Clear-cut as it Seems. 01/03/2018. Chris Mellor. The Register.

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One Response to When good enough isn’t

  1. This is a great write up and I do agree with 90% of your opinion. Yes, Nutanix is basically in the same position that VMware was when they were “new”, but at the same time does HCI from Nutanix replace the 3 tier infrastructure? I believe the answer is no, I believe it compliments it. As with many businesses the success with infrastructure comes in having a hybrid approach. What solution fits the situation that you are in?

    Not everything is cookie cutter. You look at what you need to accomplish and what options will solve that solution. Anyone who puts all their eggs in one basket, if you will, is being ignorant. Every problem should be addressed with both eyes open. Will HCI replace 3 tier infrastructure? I don’t think it will replace it, I think it compliments it.

    That is the direction that the major players should propose their solution as. Not as the replacement but the compliment to it. Then as technology moves forward so does the datacetner and just like hypervisors have done so will HCI, but that comes with time, not dominance.

    Just my opinion.

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