Hyper-converged infrastructure outfit Nutanix said that its subscription business is proving to be a winner and wants to go deeper with key channel partners.
Nutanix has nearly completed its move from hardware and software sales to software and subscription billing, and as a result, is changing how it reports its financials.
Dheeraj Pandey, chairman, founder, and CEO of Nutanix said the move to a subscription had changed the way it operated its channel.
When asked by an analyst during the question and answer period of the call whether Nutanix’s move away from a hardware focus means the company will be increasing its presence among new channel partners or go deeper with existing channel partners, Pandey replied that he thinks less is more with any relationship.
“We’ve done a good job with a few partners, and we believe that, at least in the U.S., we have a good handle on this. Internationally, there is a lot of fulfilment through partners the channel does, beyond just lead generation. And at the end of the day, we’re lucky if we get a few of them to go deep. And that’s where the focus has been. Sometimes the customers bring their preference, like, ‘I would like to do business with this channel partner,’ and we work with the customer’s interest there. But mostly we work with a few partners and try to give them more business”, Pandey said.
Nutanix still has a lot of work to do in its transition to a hybrid cloud model of licensing, and the company is encouraged by its progress to date, but its subscription transition continues to move along at a rapid pace, Pandey said.
Nutanix’ fourth fiscal quarter 2019, which ended July 31, the company reported revenue of $299.9 million, down 1.3 percent from the $303.7 million the company reported for its fourth fiscal quarter 2018. Nutanix said the drop in revenue reflected the reduction in hard “pass-through” revenue from last year’s $35.9 million to this year’s $13.0 million, along with revenue compression due to the ongoing transition to its subscription focus.
