Despite supply chain shortages and rising memory prices, Nutanix had success selling its hybrid cloud software stack last quarter due to an expanding channel and AI adoption.

Nutanix reported total revenue of $703.1 million for last quarter, up 10% year-over-year and $16.7 million better than analysts expected. Its GAAP net income of $72.1 million was up from $63.4 million a year ago. Nutanix picked up 730 new customers in the quarter.

Nutanix CEO Rajiv Ramaswami said success came despite pricing and supply issues that elongated buying cycles of servers. He said Nutanix overcame those hurdles because its software runs on all the major vendors’ servers and also in the public cloud. Both of those options can help customers implement AI.

In an interview after the Nutanix earnings call, I asked Ramaswami what an AI sale looks like for Nutanix. He said Nutanix enterprise customers build and operate their GPU clusters and use Nutanix’s software stack, and neoclouds offer GPU-as-a-service to power AI and compete with the hyperscalers. The neocloud option is still emerging, based on a Nutanix AI solution that is starting to roll out.

“That's more recent and more nascent,” Ramaswami said. “We're starting to work with some of these cloud providers to help them. If you look at the big cloud providers, they have their own software development teams, and they do their own stack, but there's a number of service providers out there that do not have the ability to go build their own stack. For them, our stack helps them build this turnkey environment on top of it so they can deliver services.”Rajiv Ramaswami

Ramaswami said it was too soon to reveal the neoclouds Nutanix is working with. He did say all of Nutanix’s business is going through the channel, though. He said new partners are coming on board, aided by customers migrating off VMware under Broadcom.

“Everything we do is transacted through the channel,” he said. “We have been recruiting a number of new channel partners over the last few years, thanks to the exodus from Broadcom. The channel has been quite successful in terms of helping us get new logos, and we do provide incentive for channel partners to get us logos that may not be new for them, but logos that are new to Nutanix.

“We continue to want the channel to do even more, sell our full portfolio, get trained in terms of some of our modern offerings like the Kubernetes offerings and AI offerings. We want them not to just be a fulfilment vehicle for us, but to be able to go identify the opportunities and prosecute the opportunities more and more, so that we can truly get the leverage we're looking for from the channel.”