- Nutanix CEO Dheeraj Pandey is leading the 11-year-old tech company through another crisis, after the coronavirus caused its new growth strategy to stall.
- Pandey and two other cofounders launched Nutanix a decade ago in the middle of the Great Recession, creating a rising star of enterprise technology.
- Pandey says that his number-one goal is to do the hard work of building a durable company that can weather any storm. He also dismissed persistent rumors that an acquisition is on the table. "What we do is keep building for the long haul," he says.
- He sat down with Business Insider to recall his personal journey as a young man from a lower middle class family in India awed by the "stoic endurance" of his parents to CEO of an emerging powerhouse.
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Nutanix CEO Dheeraj Pandey and his cofounders used a software program to suggest a name for their startup before they launched in 2009.
They were naturally hoping for a brand that's catchy, searchable and available, but they weren't too thrilled with the top choice: Nutanic.
"Wow, that's very close to Titanic," was his reaction, Pandey told Business Insider, laughing.
But they fixed that problem with a minor tweak, replacing the 'c' with an 'x,' and they even added a play button to the letter on the Nutanix logo, which Pandey says speaks to what the company is about. "It's like playing music," he said. "You can stream infrastructure from anywhere. The play button is extremely emblematic of easy and simple."
The irony is that easy and simple is not exactly how one would describe Pandey's own journey as a technology leader. While it makes sense that he wouldn't want a startup name that evokes the memory of a disaster, Nutanix was actually born in the middle of an economic cataclysm, the Great Recession.
As Nutanix reels once again from another time of severe crisis, marked by a global pandemic that threatens to plunge the world into another recession, Pandey is drawing from key lessons from his odyssey - from a young man from a lower middle class family in India awed by the "stoic endurance" of his parents to a tech entrepreneur who launched a company at the height of a downturn, that is battling it out with bigger rivals in a fast-changing, highly competitive market.
"I look at this as just part of the journey," Pandey said of the company's coronavirus-related turbulence. "When you do these big things in the public eye, it's like changing the wings of a plane at 35,000 feet."
"You can't be swayed by public markets. You need patience and stability of emotion. What it means is stoic endurance," he also said.
'Stoic endurance'
In fact, "stoic endurance" and "adversity" are two of Pandey's favorite phrases, and used them repeatedly in a recent interview.
"I very much believe in the opportunity lying behind adversity is very important for any company, any entity, any initiative," he said.
He was explaining Nutanix's most recent encounter with adversity: coronavirus. Like most tech companies, Nutanix saw its shares tumble in the wake of the health crisis. But it's been particularly painful for the cloud software company, which reported quarterly financials late last month.
Nutanix, whose software makes it easier for businesses to manage their networks in the cloud and in private data centers, beat Wall Street's expectations, but the Silicon Valley company posted a downbeat outlook which Pandey himself attributed to the global health crisis.
"We're in an environment that is murky due to the impact of the coronavirus," Pandey told analysts on the earnings call.
The good news is that Nutanix still has fans on Wall Street. William Blair analyst Jason Ader said the company was "like a box of chocolates." The outlook reduction due to the coronavirus crisis was disappointing, but the company was making "continued progress on multiple fronts," he told clients in a note.
The coronavirus crisis hit at a time when Nutanix is in the middle of a major pivot to a subscription-based business model, a transformation closely watched by Wall Street but which has now stalled.
'I look at this as just part of the journey'
The stoic approach is an attitude rooted in his Pandey's own life story.
He grew up in northeastern India in a family that wrestled constantly with financial problems. His father was a government employee in one of India's poorest state. "My father used to get paid once every six to nine months, if at all," he said. "So, stoic endurance."
His mother was a teacher who had to walk miles to go to school because she couldn't afford public transportation. The family relied on relatives who were also struggling. Things got so bad, her mother was forced to sell her jewellery from her wedding day so he and his siblings could go to school. "My mom had to go through a lot," Pandey said.
His parents' sacrifices defined his youth and shaped his journey as an adult: "It's the imagery of my childhood, the stoic endurance of those first 17 years before I stepped out of college."
Pandey went to the respected India Institute of Technology and subsequently got a post-graduate fellowship at the University of Texas at Austin.
"I didn't have the money to fly to the US," he said. But he secured a $3,000 grant from local foundations for his move. "I bought a ticket for $1,000, then left a thousand dollars to my parents and had $900 in my pocket with two suitcases," he said. Pandey was then 22 and it was his first time to fly. "One of my cousins told me how to tie a seatbelt," he said.
He arrived in Texas in 1997 at the height of the dot-com boom. He thrived at the University of Texas, he said. But he also had to worry about "economic pressures back home," including the need to buy a home for his parents.
He went on leave to work in what was then a booming tech industry. Pandey ended up dropping out of UT, as he launched a career in tech. He lived through the dot-com bust, and worked for several tech companies, including Oracle.
A startup born during the Great Recession
In 2009, during another downturn, he and three other technologists - Ajeet Singh, now cofounder of ThoughtSpot, a data visualization startup, and Mohit Aron, now CEO and founder of data management firm Cohesity - launched Nutanix.
It was the height of the Great Recession when a severe slump in the tech industry. It was not an ideal time to start a tech company. But Pandey and the Nutanix cofounders decided to go for it.
"The conditions were worse but if we thought that if we just put our head down and build something from scratch the purse strings would open up because of the pent up demand for new things in innovation and creativity and disruption at large," he said.
The gamble paid off.
The market did come back. Nutanix became a trailblazer in a new technology called hyperconverged infrastructure which enables businesses to maximize and manage more efficiently key elements of a data center, from compute, storage and networking. This dramatically cuts the cost of data center costs.
The technology emerged at a time when cloud computing was taking off in enterprise tech. The cloud lets businesses set up networks on web-based platforms run by the likes of Amazon, Microsoft and Google, allowing them to scale down or even abandon private data centers.
Nutanix quickly became a rising star of enterprise tech. The company had a blockbuster IPO in 2016 when its stock more than doubled. It now has more than 6,000 employees and more than 15,000 customers.
But being the new kid on the block was also rough for Nutanix and for Pandey.
Feud with VMware
Nutanix found itself competing with VMware, the software giant founded in 1998, whose virtualization platform let businesses tap disparate computer systems in private data centers or the cloud as one network and use that computing capacity based on needs.
The competition turned nasty at times. Last year, Pandey wrote a blog post accusing VMware - in particular, Chief Operating Officer Sanjay Poonen in particular - of using bullying tactics in a market where incumbents and the bigger tech companies often partner with, but at times also use their size to gain an advantage over smaller and newer players. The article was titled "Stop Being a Bully, VMware!"
Pandey said the rivalry with VMware eventually compelled Nutanix to expand its arsenal, saying, "When we were pushed to the corner, we said how do we take control of our destiny? So we built our own operating system so that we could then not be at the mercy of VMware."
But Pandey also said: "We were also humbled by market forces. We knew that we just couldn't shove this thing down their (customers') throat. So in many places we are actually happy to work on top of VMware."
VMware declined to comment on the dispute. But the rivalry has become less toxic and even appeared to morph into a friendly competition. In October, Poonen retweeted a photo of him and Pandey with Poonen flashing a thumbs up sign. His comment read: "We may compete, but I have a ton of respect for what [Pandey] has built!"
The future of Nutanix
Pandey has been at the helm of Nutanix for more than a decade. There have been rumors that Nutanix may be acquired, including by another giant like Google. Pandey dismissed the speculation.
"What we do is just keep building for the long haul," he said. "I think when you do it from that point of view where you're not thinking of exits, best things happen to you...Every religion, every culture has this thing that you don't worry about the result today. You just keep doing the right things. And if you have the right karma, great things happen. So karma was right now is subscription foundation. Karma right now is taking great care of our customers along the way. And Karma to us is about making sure that our investors known why this transition is important."
Pandey said his hope is that they are building a strong company that will last "not just a brand that eventually was acquired by someone else." He has been reflecting on issues on succession and what comes next for the company he launched in the middle of a downturn.
"I go back to this notion of a company that's bigger than me, which is very important and a very humbling thing to think about," he said. "It's important to think about leaving a legacy that others could also manage and grow. I think it's top of mind for every good founder. Did you have a company that is not tied to you?"
The strongest tech companies have CEOs who are "able to look around the corners," he said. That's a tough challenge given that "tech changes so fast." But his hope is that encounters with adversity, including the ongoing one with the coronavirus, hopefully is making his company stronger and more resilient.
Hope for his children
And that's also his hope for his own family, particularly his son and twin daughters. They lead much better lives than the one Pandey had in India, to be sure. And his children would surely never have to witness their parents' "stoic endurance" to provide for them -- as he did.
In an odd way, that bugs Pandey.
"I want to make sure that they actually experience adversity, because that's the way real careers and real characters are molded," he said.
He said that's one reason he doesn't sell a lot of his Nutanix stock and is reluctant to flaunt his wealth, thinking his children would be less likely to understand the importance of facing adversity and challenges "if they see money."
"If you end up having a lot in life, there's so much to lose," he said. "If you embrace adversity, you will actually do bigger, better things."
It's a worldview that sprang from his youth in India, his vivid memories of his parents and what they endured.
"When I look back at all that the imagery of them enduring I'm like, you know, how do I make my children endure?" he said. "Because it matters. I struggle with that."
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