Hpe hub banner.png

Converged infrastructure firm Nutanix files for $200m IPO

Public market investors may be wary as Nutanix is valued at $2bn but isn't profitable

Nutanix has filed for its long-awaited stock market flotation in a $200m initial public offering (IPO).

The converged hardware infrastructure vendor, which was valued at $2bn at its last private financing round in August 2014, has said that it aims to sell a maximum of $200m in shares in its IPO, and will trade on the Nasdaq Global Select Market under the symbol NTNX. Goldman Sachs, Morgan Stanley, JP Morgan and Credit Suisse are the lead underwriters of the deal.

The San Jose, California-based company has raised more than $312m from investors, with co-founder and CEO Dheeraj Pandey owning 9.2 per cent of the company and other principal shareholders, including Lightspeed Venture Partners (with a 23 per cent stake) and Khosla Ventures (with a 10.9 per cent stake).

The company said that it has 2,100 end-customers, including the likes of Kellogg's, Nintendo, Nasdaq and Fitness First. But despite some high-profile customers, the company is not yet profitable. In the fiscal year to the end of July 2015, it filed a loss of $126.1m, despite bringing in $241.4m in revenues - a 90 per cent increase from 2014.

Nutanix sits within a sub-category of converged infrastructure, what is known as "hyper-converged systems". These typically consist of storage and compute infrastructure with a hypervisor built in, enabling storage and computing loads to be managed through one control system.

The company's popularity, along with others in the software-defined storage space, pushed one of its partners, VMware, into releasing its own product, Virtual-SAN. This covers many functions that Nutanix had been offering for a number of years. Indeed, Nutanix mentions VMware as a competitor in its filing, along with Cisco, HPE, IBM, Lenovo and storage vendors EMC, NetApp and Hitachi Data Systems.

The company also relies heavily on its partners Carahsoft and Promark, which brought in 38 per cent of the company's revenue in 2015. It also relies on Super Micro to test and assemble its hardware, and has partnered with both Dell and Lenovo as original equipment manufacturers.

As of 31 October, Nutanix had 1,368 people working for the company. It has managed to recruit from the likes of Google and Facebook - no mean feat. Computing has spoken with some of those employees to find out why they switched from huge tech companies to an online storage start-up.

Converged infrastructure firm Nutanix files for $200m IPO

Public market investors may be wary as Nutanix is valued at $2bn but isn't profitable

Threats and Risks

Cisco patches critical flaw in Secure Email Gateway appliances

Green

Cloud big three sign open letter urging datacentre kit suppliers to step up

Law

Indian antitrust regulator finds Apple's App Store abuses market power