Tech skills shortages hampering Australian businesses: Nutanix

New data released by Nutanix has found that 63% of Australian businesses have trouble retaining IT talent and are scrambling to keep pace with emerging technologies such as artificial intelligence (AI) and blockchain.

The firm’s first annual Enterprise Cloud Index, which polled IT decision makers in medium-to-large enterprises in Australia, revealed that almost 90% of Australian respondents were racing to reskill IT teams, and that AI and machine learning were the top skills IT departments are currently lacking, followed closely by blockchain.

The survey also found that, despite widespread concern over AI’s impact on jobs – recently highlighted by a Frost & Sullivan report that indicated 40% of high-routine and low-skilled tasks would be replaced by 2025-2030[1] – respondents welcomed the technology with almost three quarters reporting it was having a positive impact on their organisations. Only 4% reported a negative impact.

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Nutanix ASEAN, ANZ & India VP  Neville Vincent

“The positive reaction towards the likes of AI and blockchain is testament to Australia’s propensity to react well to emerging technologies,” said Nutanix ASEAN, ANZ & India VP  Neville Vincent. “But the skills gap in successfully using these technologies is a major concern and could prevent Australia from capitalising on the boom markets they will bring. AI and automation alone are tipped to be worth potential trillions of dollars to the Australian economy over the next 15 years.”[2]

“While initiatives such as the Federal Government’s Inspiring All Australians in Digital Literacy and STEM measures show promise to normalise coding and digital skills among the workforce, they will take time to reap rewards, so the fact that organisations are embracing these technologies and training their workforce to get up to speed is reassuring” said Vincent.

Public cloud meeting requirements, but at a cost

The survey also revealed that Australian organisations were behind global peers in terms of cloud adoption but were moving faster in that direction. In the next two years, more than 80% public cloud adoption is expected, versus just over 50% now.

Satisfaction among public cloud users is high, with expectations either fully or partially being met among all respondents, with performance, data security and compliance the top benefits. However, almost 30% of organisations using cloud are breaking their budgets to get these benefits.

“All the signs point towards continued public cloud adoption among Australian enterprises, with other research predicting it will hit $5.6 billion by 2019,” added Vincent. “But there is a danger in costs spinning out of control.”

“Australian organisations are already paying a lot to enjoy the benefits of public cloud, and we can see from other regions ahead in the cloud race that this problem tends to worsen. With the Internet of Things (IoT), smart cities, and a host of other IT-intensive, cloud-reliant digital innovation underway, organisations need to watch their step and not take a ‘she’ll be right’ attitude to cloud investment” said Vincent.

The research highlighted that while public cloud was the current trend, businesses would actually favour hybrid cloud*, using at least one each of public and private cloud services working in tandem. Flexibility in choosing the right cloud for each application and the consolidation of cloud management and operations were the main reasons for this.

“This supports what we’re seeing in Australia and around the world,” said Vincent. “Local enterprises know hybrid cloud is the best mix, but while there is a gap in linking public and private cloud, organisations are favouring public and willing to pay over the odds for it.”

“The research shows that a lack of IT skills will continue to be an issue for Australian organisations, and so the underlying infrastructure needs to be kept simple to reduce that pressure and enable the businesses to be able to benefit from new technologies. The IT industry needs to make sure true hybrid cloud is available for businesses to maximise these benefits.”

[1] AI Disrupting Labor Ecosystems, Automation to Replace Human Element in Routine and Low-Skilled Jobs by 2030, Predicts Frost & Sullivan

[2] The Automation Advantage – AlphaBeta

Nutanix moves IoT intelligence to the edge

New Xi IoT service enables best practice for edge computing

Nutanix has flagged the general availability of Xi IoT, a new edge computing service offered as part of the telco’s Xi Cloud suite.

“Combining core Nutanix services with a streamlined approach, Xi IoT eliminates complexity, accelerates the speed of deployment and elevates developers to focus on the business logic powering IoT applications and services,” Nutanix said.

It added that in 2017, three billion enterprise Internet of Things edge devices generated up to 30 times more data (256 ZB) than the 30+ million nodes across public and private cloud data centres.

“But the current IoT model, in which the massive amounts of data on edge devices is sent back to a centralised cloud for processing, has severely limited the ability of customers to make real-time, actionable decisions from intelligence gained at the edge,” said Nutanix. “For customers, deriving value from this massive amount of data is rife with latency issues, lack of scalability, lack of autonomy, and compliance and privacy issues.”

Xi IoT enables customers to manage their edge locations through a sophisticated infrastructure and application lifecycle management tool, regardless of platform, it added. “Developers can leverage a rich set of popular open APIs to deploy next-generation data science applications as containerised applications or as functions, which are small snippets of code. This can be integrated into existing CI/CD pipelines, allowing them to make changes quickly from a single location. By leveraging this well-known framework, Xi IoT helps IT organisations reduce training, development and testing costs while eliminating the possibility an organisation is locked in to one public cloud provider.”

“And because data is processed in real-time at the edge, companies are no longer inhibited by the transmission of data back to a core data centre for processing, so decisions can be made based on data autonomously and in real-time,” Nutanix said.

Availability

Nutanix Xi IoT is available as part of Nutanix Xi Cloud Services and will focus on the manufacturing, retail, oil and gas, healthcare, and smart cities markets at launch. Nutanix Xi Cloud Services are available now. Nutanix Leap is available to customers today in East and West availability zones in the United States. Additional availability zones are expected to be available in the UK in calendar Q1 2019.

Nutanix eyes Australian e-learning opportunity

Nutanix has picked up a slew of contracts with Australian education establishments, under which it will deliver its Enterprise Cloud OS offering to a group of 13 schools and colleges seeking to adopt cloud technologies to provide students with a modern digital learning experience.

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Neville Vincent, Vice President, ASEAN, India, ANZ at Nutanix

“Schools are realising the need to innovate and start adopting cloud services to provide the stimulus and eLearning tools modern children require and expect,” said Nutanix  ANZ, ASEAN & India VP Neville Vincent.

“Parents want to see schools using the latest technology to enhance their children’s education and prepare them for a digital future. That’s what we provide.”

Nutanix said the move aligned with STEM education being placed firmly on the national agenda. “The Australian Federal Government announced this year that more teachers with STEM backgrounds would be placed in Australian high schools to increase interest and adoption of those subjects and the careers that flow from them,” it said.

It added that a key benefit the schools in question – primarily in the Canberra region – were finding as part of the Nutanix cloud rollout centred on freeing up human and IT resources to allow development of more digital learning tools for students.

With the additional resources available, Canberra Girls Grammar School (CGGS), has been able to introduce popular online games like Minecraft as part of its curricula to stimulate how students learn about religion. The school expects other subjects to follow soon.

“Operationally, schools are similar to medium-to-large businesses, but with less IT resources,” added Vincent. “As a result, many children are missing out on more creative learning and improved education, as schools are forced to focus on keeping the basic IT facilities running.”

“Enterprise cloud prevents that from happening and maximises the limited resources schools often have, clearing the path for a better learning experience for students,” said Vincent. “Research also shows that exposure to technology in school helps promote STEM careers, which is something Australia needs.”

Global businesses flag sourcing hybrid IT talent as key challenge: study

New Nutanix  data has revealed that while businesses globally see clear benefits of  the hybrid cloud model, respondents list scarcity of hybrid experts as a major obstacle to adoption, with 54% claiming talent retention is part of the problem.

According to Nutanix’  first annual global Enterprise Cloud Index organisations worldwide are hungry for hybrid cloud (91%) yet only 18% have that model today.

Other finding  from the study which surveyed 2,300 respondents  – including ANZ organisations –  include

  • Interoperability between cloud types was the main driver for hybrid cloud, outranking cost and security
  • 71% ranked data security and regulatory compliance as the top factor to determine where to put workloads

The findings also revealed that application mobility across any cloud is a top priority for 97% of respondents – with 88% of respondents saying it would “solve a lot of my problems.”

Additionally, the report found public cloud is not a panacea; IT decision makers ranked matching applications to the right cloud environment as a critical capability, and 35% of organisations using public clouds overspent their annual budget. When asked to rank the primary benefits of hybrid cloud, interoperability between cloud types (23%) and the ability to move applications back and forth between clouds (16%) outranked cost (6%) and security (5%) as the primary benefits.

Nutanix commissioned Vanson Bourne to survey IT decision makers about where they are running their business applications today, where they plan to run them in the future, challenges in setting up their cloud environments and how their cloud initiatives stack up against other IT projects and priorities.

The survey resulted in approximately 2,300 respondents from multiple industries, business sizes and geographies in the Americas; Europe, the Middle East, Africa (EMEA); and Asia-Pacific and Japan (APJ) regions.

In roles centred on agility and digital transformation, IT teams understand that runtime environments for enterprise apps change constantly. Respondents indicated a need for greater orchestration and application mobility across cloud environments, as they seek flexibility to move apps to the “right” cloud on a more dynamic basis.

In addition, shadow IT practices that circumvent enterprise IT teams are posing a significant challenge to forecasting and controlling public cloud spend with well over half of respondents (57%) reporting one or more incidents of shadow IT

 

Nutanix offers CIOs improved visibility, optimisation with SaaS product upgrade

Nutanix has announced new updates to Beam which extend its cost visibility and optimisation capabilities into on-prem deployments.

With these new updates, Nutanix customers can get full visibility and insight into the entirety of their infrastructure environment, including public and private clouds, so they can choose the right cloud for every application.

Applications that are more predictable, such as data back-up, databases and enterprise applications can be more cost-effective when operating in private clouds, while less predictable workloads like mobile/digital and IoT services can be more suitable for public cloud infrastructure.

“Hybrid cloud is no longer considered a brief stopping point in the journey toward an all public cloud future. It’s a first-class destination as customers realise they want the complementary benefits of the public and private cloud,” said Sunil Potti, Chief Product and Development Officer at Nutanix.

hqdefault“For this to be successful, companies need to understand how they’re using infrastructure no matter what the platform and from a single view. Nutanix Beam now provides that visibility so customers can finally make informed decisions about their entire infrastructure.”

Beam will also now provide a global multi-cloud view so customers can visualise cloud spend patterns from a single dashboard, making it easier to make decisions which save their business money and ensure compliance with regulations.

According to a recent survey from IDC[1], “80% of customers report repatriating workloads from public cloud environments” and “the complexity of managing an increasingly disaggregated application portfolio across multiple landing zones is driving a sharper focus on TCO and performance for discrete elements.”

As organisations focus on wrangling public cloud deployments to gain more visibility into what is being consumed, existing private cloud deployments, including potential cost savings, are often ignored, resulting in an incomplete picture of a company’s enterprise infrastructure.

Beam will now provide customers with cost visibility into Nutanix software licenses so they can understand the cost associated with their Nutanix private cloud environments, as well as with public cloud deployments on popular cloud platforms.

In addition to having complete visibility across the entirety of their public cloud consumption, Nutanix customers will now be able to see how much they are spending on each Nutanix cluster they’ve set up and get advance notification when they need to add more software based on current consumption trends, all within a single management dashboard. This global view will finally enable customers to manage their entire IT infrastructure environment.

Adding to existing support for all major public cloud platforms, providing customers with visibility and governance across their public cloud deployments, Beam’s newly added support for cost governance on Nutanix clusters provides:

  • Unified governance for all clouds – CIOs and I&O leaders can centrally control consumption across private, public and hybrid clouds, and make decisions on future consumption more efficiently
  • Continuous cost optimisation – Beam conducts intelligent analysis of cloud consumption trends to provide a list of the type of product and timeline for future purchases to keep the cloud cost optimised for both private and public clouds
  • Cluster level cost analysis – Customers will be able to see the cost of their Nutanix clusters that have been deployed and cost of software licenses allocated to each cluster

Nutanix reports Fourth Quarter and fiscal 2018 financial results

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SYDNEY, Australia – Nutanix, Inc. (NASDAQ: NTNX), a leader in enterprise cloud computing, today announced financial results for its fourth quarter and fiscal year ended July 31, 2018.

Fourth Quarter Fiscal 2018 Financial Highlights

  • Revenue: $303.7 million (at 77.7% non-GAAP gross margin), up from $252.5 million (at 62.6% non-GAAP gross margin) in the fourth quarter of fiscal 2017, reflecting the elimination of approximately $95 million in pass-through hardware revenue in the quarter as the company continues to execute its shift toward increasing software revenue1
  • Software and Support Revenue: $267.9 million, growing 49% year-over-year from $179.6 million in the fourth quarter of fiscal 2017
  • Billings: $395.1 million, growing 37% year-over-year from $289.2 million in the fourth quarter of fiscal 2017
  • Software and Support Billings: $359.2 million, growing 66% year-over-year from $216.3 million in the fourth quarter of fiscal 2017
  • Gross Margin: GAAP gross margin of 75.9%, up from 61.4% in the fourth quarter of fiscal 2017; Non-GAAP gross margin of 77.7%, up from 62.6% in the fourth quarter of fiscal 2017
  • Net Loss: GAAP net loss of $87.4 million, compared to a GAAP net loss of $66.1 million in the fourth quarter of fiscal 2017; Non-GAAP net loss of $19.0 million, compared to a non-GAAP net loss of $26.0 million in the fourth quarter of fiscal 2017
  • Net Loss Per Share: GAAP net loss per share of $0.51, compared to a GAAP net loss per share of $0.43 in the fourth quarter of fiscal 2017; Non-GAAP net loss per share of $0.11, compared to a non-GAAP net loss per share of $0.17 in the fourth quarter of fiscal 2017
  • Cash and Short-term Investments: $934.3 million, up 168% from the fourth quarter of fiscal 2017
  • Deferred Revenue: $631.2 million, up 71% from the fourth quarter of fiscal 2017
  • Operating Cash Flow: $22.7 million, compared to $5.9 million in the fourth quarter of fiscal 2017
  • Free Cash Flow: $6.5 million, compared to negative free cash flow of $6.5 million in the fourth quarter of fiscal 2017

Fiscal Year 2018 Financial Highlights

  • Revenue: $1.16 billion (at 68.1% non-GAAP gross margin), up from $845.9 million (at 63.1% non-GAAP gross margin) in fiscal 2017, reflecting the elimination of approximately $169 million in pass-through hardware revenue in fiscal 2018 as the company continues to execute its shift toward increasing software revenue1
  • Software and Support Revenue: $898.1 million, growing 47% year-over-year from $609.6 million in fiscal 2017
  • Billings: $1.42 billion, growing 43% year-over-year from $990.5 million in fiscal 2017
  • Software and Support Billings: $1.16 billion, growing 54% year-over-year from $754.2 million in fiscal 2017
  • Gross Margin: GAAP gross margin of 66.6%, up from 61.3% in fiscal 2017; Non-GAAP gross margin of 68.1%, up from 63.1% in fiscal 2017
  • Net Loss: GAAP net loss of $297.2 million, compared to a GAAP net loss of $379.6 million in fiscal 2017; Non-GAAP net loss of $101.5 million, compared to a non-GAAP net loss of $120.7 million in fiscal 2017
  • Net Loss Per Share: GAAP net loss per share of $1.81, compared to a GAAP net loss per share of $2.96 in fiscal 2017; Non-GAAP net loss per share of $0.62, compared to a pro forma non-GAAP net loss per share of $0.85 in fiscal 2017
  • Operating Cash Flow: $92.6 million, compared to $13.8 million in fiscal 2017
  • Free Cash Flow: $30.2 million, compared to negative free cash flow of $36.4 million in fiscal 2017

Reconciliations between GAAP and non-GAAP financial measures and key performance measures are provided in the tables of this press release.

“We ended the year on a high note with a record quarter on many fronts, positioning us extremely well for the future. We will continue to invest in talent and hybrid cloud technology while incubating strategic multi-cloud investments such as Netsil, Beam, and now Frame,” said Dheeraj Pandey, Chairman, Founder and CEO of Nutanix. “Frame increases our addressable market, brings another service to our growing platform, and adds employees with insurgent mindsets who will help us continue to challenge the status quo.”

“The company’s strong achievement of 78 per cent non-GAAP gross margin, the best in our history, is the direct result of our successful execution toward a software-defined business model,” said Duston Williams, CFO of Nutanix. “We’re also tracking above our target performance we set using the ‘Rule of 40’ framework, demonstrating our ability to balance growth and cash flow.”

Recent Company Highlights

  • Completed the Acquisition of Frame: Acquired Frame, a leader in cloud-based Windows desktop and application delivery, increasing the company’s addressable market. IDC estimates that the desktops-as-a-service (DaaS) software market is forecast to grow to $3 billion in 2021 at a compound annual growth rate of 32%.2 With the addition of Frame, Nutanix customers will be able to deliver desktops-as-a-service from multiple clouds, combining the consumer-grade simplicity and web-scale design of cloud applications with the functionality of traditional virtual desktop applications.
  • Achieved Milestone of $1 Billion+ in Annual Revenue in Less Than a Decade from Inception: Grew fiscal 2018 revenue to $1.16 billion, excluding $169 million in pass-through hardware revenue eliminated, crossing the $1 billion milestone.
  • Expanded Customer Base Hitting Milestone 10,000+ Customers and Signed Largest Deal in History: Nutanix ended the fourth quarter of fiscal 2018 with 10,6103 end-customers, adding 1,000 new end-customers in the quarter. Notably, the company passed an important milestone, adding its 10,000th customer during the quarter. The company also expanded an existing customer engagement by closing a deal greater than $20 million in the quarter, the largest in Nutanix history.
  • Successfully Continued Transition to a Software-Defined Business Model: Grew software and support billings by 66 per cent year-over-year in the fourth quarter. Pass-through hardware billings decreased to 9 per cent of total billings in the quarter, down from 25 per cent in the fourth quarter of fiscal 2017.
  • Launched 12 Culture Principles Representative of Company Values: Codified the company’s corporate values with the articulation and launch of 12 culture principles. These principles serve as the foundation for how Nutanix employees work with each other, with partners, and with customers.
  • Added Two New Executives in Key Functions: Prabha Krishna joined Nutanix as the SVP of People and Places, and is responsible for the HR and facilities teams worldwide. In addition, Ben Ravani joined as the SVP of Xi Reliability Engineering to oversee building and operating Xi Cloud Services as well as serve as the General Manager of the Nutanix Seattle site.
  • Introduced New Velocity Program for Scaling Growth in the Mid-Market: The company launched its Velocity channel program in June, aimed at accelerating the selling processes, incentives, and marketing investments for strategic, mid-market focused channel partners. The program provides a frictionless experience for channel partners, giving them more leverage to grow their business.
  • Expanded its Global Workforce: Nutanix has rapidly increased and evolved its operations in India over the past five years and recently ranked second on “India’s Great Mid-Size Workplaces 2018” list. Additionally, the company continues to increase its headcount in Bangalore, Belgrade and Berlin as it further disrupts traditional enterprise IT incumbents with an increasingly global workforce.
  • Certified as the First Hyperconvergence-Based Solution for SAP HANA®: In August, the company received certification from SAP for its AHV hypervisor and Enterprise Cloud OS platform as the first Hyperconverged Infrastructure (HCI) solution to pass SAP’s stringent criteria for running production SAP HANA® deployments. With this milestone achievement, customers combine the cost and operational benefits of modernised IT infrastructure with the scale and performance required for SAP HANA. For Nutanix, this presents a significant opportunity to broaden penetration in Global 2000 accounts.

Q1 Fiscal 2019 Financial Outlook

For the first quarter of fiscal 2019, Nutanix expects:

  • Revenue between $295 and $310 million, implying software and support revenue growth of approximately 40-45% YoY;
  • Billings between $370 and $390 million, implying software and support billings growth of 50-55% YoY;
  • Bill-to-revenue ratio of approximately 1.26x;
  • Non-GAAP gross margin between 78% and 79%;
  • Non-GAAP operating expenses between $280 and $290 million;
  • Non-GAAP loss per share between $0.26 and $0.28, using approximately 176 million weighted shares outstanding

First quarter guidance reflects a faster removal of pass-through hardware than originally anticipated, accelerating the reduction of zero margin billings and revenue with the benefit of improved gross margins. Additionally, the Q1 expected bill-to-revenue ratio of 1.26x is higher than street consensus of 1.21x, implying an approximate $12 million in deferred revenue that would have otherwise been in revenue and gross profit.

Nutanix targets mid-market with new partner program

Nutanix has launched a new channel partner program, aimed at key partners focused on the mid-market.

The firm’s new Velocity program includes accelerated selling processes, incentives and marketing investments for strategic, mid-market focused channel partners. As part of the program, Lenovo is teaming with Nutanix to provide specific HX product bundles for mid-market customers based on the HX appliance.

In addition, the companies are launching a new hyperconverged software-ready product offering, dubbed Lenovo ThinkAgile HX Certified Nodes, designed specifically for enterprise customers.

“Legacy channel programs have revolved around benefits based only on revenue achievement, but Nutanix is looking to prioritise and reward partners who invest the most in our business,” said Nutanix Global Channel Sales VP Rodney Foreman.