Nutanix Rides On Solid HCI Portfolio, Adds New Features

Nutanix (NASDAQ:NTNX) is benefiting from the transition to software-only sales. The company’s software-defined hyper converged infrastructure (HCI) solutions support multi-hypervisor and multi-cloud with unified management. The company’s solutions are primarily deployed in large and centralized data centers. The company’s built-in hypervisor has been gaining significant traction as customers continue to select it as a low-cost alternative compared to other vendor offerings.

Notably, in its last reported quarter, the company’s software and support revenues grew 13.7% year over year to $338.2 million. Moreover, the company’s hypervisor, AHV, experienced a 47% increase in adoption on a rolling four-quarter basis.

The company recently expanded the Nutanix platform by incorporating new features for Big Data and analytics applications as well as unstructured data storage. These features include the management of object data across multiple Nutanix clusters, higher object storage capacity per node and formal Splunk (NASDAQ:SPLK) SmartStore certification. The integration of object storage services with Nutanix’s HCI solution will enable the cloud platform to improve performance, achieve scale, and reduce costs by maximizing unused resources.

Siloes, complexity and operational inefficiencies are the main challenges for IT professionals because of the dependence of companies on business data to create personalized customer experiences. For Big Data workloads, strong cloud environments are required that can handle large volumes of unstructured data, while analyzing them in real time to generate insights.

Nutanix’s multi-cluster support and Splunk SmartStore certification will enable massive scale and performance to meet the workload requirements.

Nutanix’s software is scalable and simple, and features built-in automation and one-click operations. This eliminates the need for data scientists and security teams to focus on extracting value from data.

Prospects of Hyper Converged Market Bode Well

Nutanix is a leading player in the HCI market, holding a 13% market share as of the third quarter of 2019, per International Data Corporation (IDC). The HCI market is projected to grow rapidly in the long term. The research firm also noted that revenues from hyper converged systems increased 3.5% year over year to $3.75 billion during the third quarter of 2019.

Further, market research firm, Gartner, announced Nutanix as a leader in its “Magic Quadrant for Hyperconverged Infrastructure” in November last year.

Nutanix is expected to benefit from the strong growth prospects of the HCI market, owing to its portfolio strength, over the long term. The company’s HCI partnerships with Alphabet’s (NASDAQ:GOOGL) Google and Dell (NYSE:DELL) are positives as well.

Nutanix currently carries a Zacks Rank #3 (Hold).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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