Investors knight Nutanix as new hardware superstar with $101M round

Top enterprise-focused investors have selected a new darling: Nutanix, a company that makes boxes that combine servers and storage.

Today Nutanix pulled the cover off a seriously large $101 million investment.

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Nutanix stuffs fast flash drives, reliable disk drives, and basic servers into a single box, taking inspiration from web properties operating at giant scale, like Amazon.com, Facebook, and Google. But the company isn’t dead-set on getting such companies on its customer list; it concentrates more on signing up staid enterprises. So the news of Nutanix’s big funding could be interpreted as a confirmation that enterprises still take out their wallets for hardware for their own data centers.

At the same time, the bet on Nutanix specifically shows support for the idea that big companies are looking out for opportunities to minimize their IT footprint and consolidate spending on equipment and power.

The devices integrate well in data centers where other servers are virtualized, or chopped up into virtual slices, letting multiple applications depend on a single server. Over the past decade or so, virtualized environments have become quite common, so Nutanix has a big sweet spot to target.

Nutanix now sits beside Pure Storage as one of the most well funded private technology infrastructure companies around.

The company, based in San Jose, Calif., has racked up around 500 customers, including eBay, PricewaterhouseCoopers, and a bevy of U.S. government agencies. It employs around 400 people in 25 countries, Pandey said.

Riverwood Capital and SAP Ventures led the round. New investors Greenspring Associates and Morgan Stanley Expansion Capital participated, along with existing investors Battery Ventures, Khosla Ventures, and Lightspeed Venture Partners. To date the company has raised $172.2 million.

And Nutanix now boasts a $1 billion valuation and plans to make an initial public offering (IPO) in the next four or five quarters, founder and chief executive Dheeraj Pandey said in an interview with VentureBeat.

“I think, you know, this year is a seminal year for us,” Pandey said. His company would be profitable if it were to stop growing, he said, but “the goal right now is to go for this land grab.” Toward that end, Nutanix will spend on research and development and simultaneously expand its foothold globally.

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Of course, Nutanix isn’t the only one with the good idea of mashing compute and storage components into a single box. Legacy technology vendors such as Cisco and IBM sell their own spins on the concept, as do storage vendors EMC and NetApp.

And Nutanix isn’t the only one going up against the heavyweights. Other up-and-coming companies like Pivot3, Scale Computing, and SimpliVity push boxes containing servers and storage. although Pandey didn’t sound very concerned about the competition from those firms.

Still, now that Nutanix has succeeded in raising such a large funding round, vendors will surely put more effort behind displacing the company. Nutanix’s new money should help it defend itself while growing bigger.