Key Takeaways From The Nutanix NEXT Conference

Following its attendance of Nutanix Inc NTNX's NEXT Conference held last week, Oppenheimer said it came away increasingly confident in the company's growth prospects, technology roadmap, customer dynamics and its ability to adjust to market shifts.

Positive Buying Bias Of Customers

Giving their findings based on a survey of 25 customers — all of whom attended the conference — analysts Ittai Kidron, George Iwanyc and Michael Leonard said customers have a strong positive spending bias for the company. The analysts noted that 72 percent of those surveyed showed a strong bias for Nutanix spending over the next 12 months; 28 percent expressed flat spending; none indicating a scale back.

Expanding Usage

Oppenheimer noted that customers are comfortable shifting more and more of their workloads to HCI solutions, as legacy equipment is retired and new apps ramp. About half of those surveyed are early in their HCI adoption, indicating a quick shift over the next 12 months, the firm revealed.

Impressive Roadmap

The firm also found that customers are positive on Nutanix's roadmap and value proposition, including Acropolis/Prism/Xi-Cloud/X-Ray, AHV etc, citing simplicity as the key to their use. This, according to the firm, positions the company's HCI strongly versus Cisco Systems, Inc. CSCO's HyperFlex and Dell EMC/VMware, Inc. VMW's VxRail.

Healthy Partnership With Dell EMC

Oppenheimer believes the Dell EMC commitment remains healthy. The firm noted that Dell EMC channel partners/employees echoed comfort in selling Nutanix-based XC products. That said, the firm thinks Dell EMC has set guidelines where VxRail and XC are positioned with customers.

"Customer feedback was positive on Dell EMC solutions, but suggested Nutanix's NX had power/space/deployment advantages," the firm added.

Supporting its investment thesis, Oppenheimer said Nutanix would benefit long term from:

• The disruptive nature of its differentiated hyperconverged technology.
• Large addressable data center equipment market.
• Effective land-and-expand business model, having potential to grow in terms of customer base, international sales and recurring revenue.

As such, Oppenheimer reiterated its Outperform rating and $34 price target on the shares of the company.

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