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Cloud Stocks: Nutanix Focuses on the Hybrid Cloud

Posted on Thursday, Oct 15th 2020

According to a Research and Markets report, the global cloud computing market is expected to grow from $371.4 billion in 2020 to $832.1 billion by 2025 at a CAGR of 17.5%. The research reveals that the Covid-19 crisis has accelerated digital business transformation as organizations, educational institutions, and government agencies are all looking to cloud-based solutions and services. Enterprise cloud computing player Nutanix (Nasdaq: NTNX) is reaping the benefits of this growth.

Nutanix’s Financials

For the fourth quarter of the year, revenues grew 9% to $327.9 million, ahead of the market’s forecast of $319.4 million. Billings grew 5% to $388.5 million. Net loss was $185.3 million, compared with a loss of $194.3 million a year ago. Adjusted loss was $0.39 per share compared with a loss of $0.57 per share a year ago. The market was looking for an adjusted loss of $0.67 per share.

By segment, Nutanix’s Product revenues grew 4% to $179.1 million while revenues from support, entitlements, and other services grew 30% to $148.8 million.

Software and support revenues grew 14% to $326.5 million. Billings for the segment grew 8% to $387.1 million. Subscriptions accounted for 88% of its total billings for the quarter. It ended the quarter with 17,360 end-customers.

Nutanix ended the year with revenues of $1.31 billion and a net loss of $872.9 million. On an adjusted basis, net loss was at $2.39 per share.

Nutanix’s Product Expansion

During the quarter, Nutanix announced the general availability of Nutanix Hybrid Cloud Infrastructure on Amazon Web Services. The launch extends Nutanix’s software to the public cloud. It eliminates the complexity of multi-cloud environments with its unified operations and adds seamless app mobility across locations, thus addressing the major technical and operational challenge of hybrid cloud computing.

Earlier last quarter, it released Nutanix Clusters that allows organizations to build a hybrid cloud in under an hour with disaster recovery sites and data insensitive workloads. It grants a single-click access to the enterprise’s most critical workloads, such as databases and latency sensitive application and DR sites. Nutanix Clusters provides customers the ability to deploy any application in the cloud with license portability across both private and public locations, protecting customers’ investment in software infrastructure.

It also strengthened its Xi Frame by adding various new capabilities such as enhanced onboarding for on-premises desktop workloads on Nutanix AVH, greater support for user profile management, and the ability to convert Windows apps to Progressive Web Apps. Additionally, Nutanix launched new solutions allowing IT teams to deploy, upgrade, and troubleshoot their cloud infrastructure from anywhere. The solutions are included as part of its core software available to its customers.

Nutanix’s PaaS Strategy: Developer or APIs

Nutanix currently allows developers access to its platform using REST APIs. Its developer community can access pre-defined code samples that operate on various languages including Python, C#, and PowerShell.

Nutanix’s PaaS Strategy: Developer Community

Nutanix has more than 100,750 developers on its portal that are building codes that can streamline the deployment of new and rebuilt Nutanix clusters.

Nutanix’s PaaS Strategy: Marketplace and Metrics

While Nutanix allows developers to leverage its API and code library to build integrations, it does not have an app-based platform strategy that allows developers to create and share apps within a marketplace. As I mentioned earlier, I think Nutanix will have to expand its PaaS capabilities to allow the developer community to become more engaged with its product.

Its stock is currently trading at $23.41 with a market capitalization of $4.8 billion. It was trading at a year high of $37.86 in February this year. It fell to a year low of $11.31 in March this year amid the turmoil.

Photo Credit: ElasticComputeFarm / Pixabay

This segment is a part in the series : Cloud Stocks


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