Businessmodel of Nutanix

Customer Segments

Nutanix has a mass market business model, with no significant differentiation between customer groups. The company targets its offerings at organizations of all industries and sizes.

Value Proposition

Nutanix offers four primary value propositions: convenience, innovation, performance, and brand/status.

The company offers convenience by making life easier for clients. It simplifies datacenter infrastructure by integrating storage and server resources into a turnkey appliance that can be deployed in just 30 - 60 minutes. It also scales storage quickly, going from three servers to thousands.

The company has embraced innovation as a part of its culture. Its Enterprise Cloud Platform leverages hyperconvergence and Intel x86-based servers to natively integrate storage, compute, and virtualization in scale-out clusters. It replaces the need for separate management processes.

The company demonstrates strong performance through tangible results. It claims to have an 8x faster time-to-value in buying, implementing, and managing than any other hyperconvergence solution. Also, research firm IDC projected in 2015 that on average, organizations’ use of IT solutions powered by Nutanix software would yield five-year discounted benefits worth $7.85 million, a return on investment of 510%, a payback period of 7.5 months, and a reduction in their total cost of ownership by 58.3% over five years. Specific examples of positive outcomes for clients include:

• Insurance firm ADD used Nutanix’s solutions to speed up the installation of a virtual desktop infrastructure, reducing the time taken from three months to 14 days
• Agilis Networks used Nutanix’s solutions to implement a new storage solution, resulting in savings of $12,000 in power and electricity costs over 3 years
• Akron Public Schools used Nutanix’s solutios to replace its infrastructure, resulting in savings of over 20 hours of compute time per week
• ASL Airlines France used Nutanix’s solutions to install new infrastructure, resulting in a reduction in the time taken for computer systems to connect to sessions, from three minutes to 20 seconds The company reduces costs by offering flexibility. It operates the Nutanix GSOFlex Services Credit program, which enables clients to earn credits when they purchase its products. These credits can be used to purchase consulting, training, and other services in the future. The program includes packaged services that provide built-in volume discounts.

The company has established a strong brand due to its success. IDC indicates that it generated 52% of all hyperconverged revenue worldwide during the first half of 2014. It has a Net Promoter Score of 92 and a 9.6 Customer Satisfaction Rating, one of the highest customer satisfaction scores in the hyperconvergence industry. It has over 4,400 customers in over 90 countries. It claims its clients include the #1 companies in the drug, home retail, media, medical, auto, beverage, and electronics industries. Lastly, it has won many honors, including the following:

• Recognition as Technology Innovator of the Year at the 2016 V3 Technology Awards
• Recognized as part of CNBC’s 2015 Disruptor 50 list
• The Best of Show and Cloud Computing Awards for Nutanix OS 4.1.1 at Citrix Synergy 2015
• The Omega NorthFace Award for Exceptional Customer Satisfaction and Loyalty
• The Information Management Award for Most Promising Storage Management Solution ### Channels

Nutanix’s main channels are its sales and business development teams. It also sells its offerings through various resellers. The company promotes its offerings through its website, social media pages, and participation in conferences.

Customer Relationships

Nutanix’s customer relationship is primarily of a personal assistance nature. The company assists customers in the following ways:

• Support Services – Nutranix provides customer service on a 24x7x365 basis. Its support specialists have an average of 10 years’ experience, and have multiple industry certifications in networking, Unix administration, virtualization, and various enterprise applications (SQL, VDI, Exchange). The company also assigns a Technical Relationship Manager (TRM) to clients who depend on its offerings for mission-critical applications.
• Training Services – Nutanix operates Nutanix nu.school, a training program on its offerings and hyperconvergence technology in general. The program provides courses in instructor-led virtual delivery and in-person formats. In-person courses are held at training centers or at the client site. Nutanix also enables customers to receive professional certification in designated skill areas.
• Consulting Services – Nutanix offers pre-deployment architectural assessment, deployment design and implementation, and post-deployment optimization and validation services. The company’s IP and best practices are integrated in the delivery of these services. Despite this orientation, there is a self-service component. The company maintains the Nutanix Education Portal, which provides training courses on a self-paced basis. Also, its website provides answers to frequently asked questions and useful resources such as analyst reports, white papers, eBooks, infographics, solution briefs, best practice guides, datasheets, webinars, and videos. Lastly, there is a community element in the form of a forum where clients can interact with peers.

Key Activities

Nutanix’s business model entails designing and developing its software and delivering related services for customers.

Key Partners

Nutanix’s key partners are the firms that it works with to sell its offerings in order to expand its reach. It provides these firms with training and marketing support.

Nutanix operates a “Customer Advisory Board“ that consists of forward-thinking clients who gather to exchanges ideas and verify that the Nutanix product road map aligns with their vision. It also operates a “Technical Advisory Board“, a group of forward-thinking architects and administrators who provide feedback to the company’s engineers and product managers.

Key Resources

Nutanix’x main resources are its human resources, who include the engineers that design and develop its software, the sales employees that promote it, the training/consulting employees that provide instruction/advice, and the customer service employees that provide support. Lastly, as a startup it has relied on funding, raising $312.2 million as of September 2016.

Cost Structure

Nutanix has a value-driven structure, aiming to provide a premium proposition through significant personal service and frequent service enhancements. Its biggest cost driver is sales/marketing, a fixed cost. Other major drivers are cost of sales, a variable expense, and research/development, a fixed cost.

Revenue Streams

Nutanix has two revenue streams: revenues it generates from sales of its products and revenues it generates from sales of its support services.