Here’s something a little ironic: Nutanix, a company that first championed abstraction of hardware with software, then backed away from hardware, has now noticed that some customers’ software buying behavior is tied to hardware availability.
Pandemic-pumped supply chains are the cause of this oddity, CEO Rajiv Ramaswami told investors today on the company’s Q2 2022 earnings call.
“We’ve seen a few customers pulling forward orders in some cases to get an early access to hardware,” he said. Nutanix has also worn it when “other customers … have placing delayed orders to confirm expected late deliveries of hardware.”
One feature of Nutanix’s second quarter was an unexpected surge in early renewals of subscription deals. In conversation with The Register Ramaswami, said inflation and the potential for future price rises did not drive those transactions, nor did Nutanix push for early deals. Some customers signed early to consolidate multiple contracts, he said, while others just happened to have the wherewithal to make a deal.
Whatever the reason for the enthusiastic buying, it propelled the company to $413.1 million revenue for the quarter, year on year growth of 19 percent, and pushed annual recurring revenue beyond a billion dollars, up 55 per cent year on year.
Free cash flow landed at $17m, the first positive quarter for three years. The company still posted a net loss of $115m but raised the floor of its full-year guidance to a predicted revenue range of $1.625bn to $1.63bn, up from the previous prediction of $1.615bn to $1.630bn.
That growth probably won’t come from 5G related work, an issue The Register raised as the likes of Dell, VMware, and Red Hat have recently made much of their hybrid cloud infrastructure being marvelously applicable to the new network standard’s requirement for compute resources in many locations. Ramaswami said Nutanix’s ability to host virtualized workloads makes it suitable for deployment in 5G rigs, but the company is “not doing specific work today” to address the 5G market.
The company is, however, working hard on its transition to a new product packaging and pricing package. Ramaswami said customers have responded well to that new scheme.
“They like the simplification,” he said. And clearly, they like it even more when they can also get some hardware they like.