Silicon Valley company beefs up Triangle presence with new regional hub

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Occupancy at the The Measurement Building at Morris Ridge building in downtown Durham has improved to 79 percent with its recent fourth floor lease to California-based Nutanix.

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Lauren K. Ohnesorge

Staff Writer- Triangle Business Journal

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Nutanix is trying to create the iPhone of the data center, says its CEO Dheeraj Pandey of Silicon Valley-based Nutanix.

Pandey is a metaphor guy, and the iPhone is his favorite analogy.
It's how he explains his innovation to those not hunched over computer screens 24/7. It's an innovation that has spread from Silicon Valley across the globe. Durham is one of four large regional hubs, and has gone from zero to 50 employees in a matter of months.
Pandey had his first visit Tuesday – in town to celebrate the local headcount's recent move to the new Measurement Building hub in Durham. And he brought his metaphors.
"There was a Blackberry," he says, taking a sip of a Diet Snapple. He's sitting against a window with a sunset backdrop of downtown. "It had sort of revolutionized the smartphone world. And email was the killer app on that smartphone. Nobody thought that you would do yet another smartphone. For what? What's the killer app."
Then there was Apple.
"Apple proved you could basically build a killer app," he says.
Apple, he'll tell you, combined the iPod with the phone.
And that's what he's trying to do – converge different data center tiers.
"To us, the question was, what is the killer app for this converged architecture?" he says. "We could have chosen anything. We could have chosen networking or security... But we chose the right killer app. It was storage."
He's trying to combine applications with storage, a risky endeavor – because he's not talking about just a filing system. He's talking about mission critical operations for the likes of banks and retailers, where if something goes wrong, business stops.
For the first five years of the company, he focused on building that "killer app" for converged infrastructure. And the next five years? He'll be building out the rest of the metaphor. Because Apple didn't stop with music.
"Look at your iPhone," he says, noting the camera, the flashlight, the calculator, physical things that became pure software. "That's what is happening as we speak in the data center. There are a lot of these special purpose devices that used to do one thing, and the one thing is becoming pure software."
The rest of the metaphor isn't iBooks or email. It's switches, firewalls.
And he's bullish that the market is getting his message.
In its first five years, the firm has snagged 1,000 customers from across multiple sectors.
And it's snagged about $320 million in capital to play in a space formerly occupied by the mammoths – NetApp (Nasdaq: NTAP), EMC Corp. (NYSE: EMC).
Pandey's background is in data management, building distributed systems – infrastructure that doesn't work on a single machine, but "a bunch of machines that look like a single machine."
His first opportunity came when he took a leave of absence from his doctorate program at University of Texas, Austin. It was the height of the bubble in the 90s. And Trilogy Software came calling.
Within a year, he had moved to Silicon Valley, where he'd take a job at ill-fated Zambeel, which wouldn't survive the bubble.
"The premise of the company was the bubble," he says. "They were building for the bubble economy."
Pandey, who has a no-regrets attitude, says he learned a lot from the failed server company – lessons that will help Nutanix succeed.
"One was fiscal responsibility," he says. "The bubble was heavy for everybody. People thought there was infinite money to be had. The bubble sobers you. If you've lived in the bubble... You know if there are highs right now, there will be lows tomorrow, so be prepared for it. That company wasted $65 million over three years without a product out the door."
Nutanix, however, went off of a "minimal viable product" model -MVP. You get a product. You make sure it works. You put it on the market, and use feedback to make the product better.
"The art of building a startup is knowing your MVP," he says. Then you go after early adopters. "Don't waste their time using them as testers... Give them something that's reliable."
For Nutanix, it took two years to get the MVP to market.
And Nutanix took another efficiency lesson from bubble builders of the past: Building up.
"You first have to hire doers, a ton of doers who actually build stuff," he says. "Then, when you have enough doers that are creating chaos, you bring in leaders."
Too many top-heavy companies start on the assumption of chaos, he says.
His doers set about their project "like a science project," he says.
"The two things that we're trying to meld together were so independent," he says. "It's like bringing an iPod to a phone."
The Eureka moment came not when the product worked – but when naysayers became customers, he says. And it's still happening.
And to accommodate the innovation he's expecting to deliver, he's hiring.
The Durham operation will have a little bit of everything – from sales to research and development, he says. Chosen due to its proximity to the universities and tech talent at NetApp, IBM and EMC, Durham is just part of his global plan. Recently, the firm opened a hub in Seattle.
The company has 750 employees overall, with half in Silicon Valley. The rest are scattered across 35 countries, with four big hubs in Seattle, Durham, Amsterdam and Bangalore. It's a lot of ground to cover, but Pandey says he'll be coming back to Durham.
"I think I've realized I'll have to spend a whole lot more time here," he says. "My job is now to act as the glue of this company."
It starts today. That's when fellow execs will gather with the Durham headcount for its first Durham all-staff meeting. But Tuesday night was about networking in a more casual setting. The company celebrated its move with a party – attended by about 80 people.

Lauren Ohnesorge covers information technology and entrepreneurship.