Dec
29
2020
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VMware files suit against former exec for moving to rival company

Earlier this month, when Nutanix announced it was hiring former VMware COO Rajiv Ramaswami as CEO, it looked like a good match. What’s more, it pulled a key player from a market rival. Well, it seems VMware took exception to losing the executive, and filed a lawsuit against him yesterday for breach of contract.

The company is claiming that Ramaswami had inside knowledge of the key plans of his former company and that he should have told them that he was interviewing for a job at a rival organization.

Rajiv Ramaswami failed to honor his fiduciary and contractual obligations to VMware. For at least two months before resigning from the company, at the same time he was working with senior leadership to shape VMware’s key strategic vision and direction, Mr. Ramaswami also was secretly meeting with at least the CEO, CFO, and apparently the entire Board of Directors of Nutanix, Inc. to become Nutanix’s Chief Executive Officer. He joined Nutanix as its CEO only two days after leaving VMware,” the company wrote in a statement.

As you can imagine, Nutanix didn’t agree, countering in a statement of its own that, “VMware’s lawsuit seeks to make interviewing for a new job wrongful. We view VMware’s misguided action as a response to losing a deeply valued and respected member of its leadership team. Mr. Ramaswami and Nutanix have gone above and beyond to be proactive and cooperative with VMware throughout the transition.”

At the time of the hiring, analyst Holger Mueller from Constellation Research noted that the two companies were primary competitors and hiring Ramawami was was a big win for Nutanix. “So hiring Ramaswami brings both an expert for multi-cloud to the Nutanix helm, as well as weakening a key competitor from a talent perspective,” he told me earlier this month.

Mueller doesn’t see much chance of the suit succeeding. “It’s been a long time since the last lawsuit happened in Silicon Valley [involving] a tech exec jumping ship. Being an ‘Employment at Will’ state, these suits are typically unsuccessful,” he told me this morning.

He added, “The interesting part of the VMware vs Nutanix lawsuit is, does a high ranking executive interviewing a competitor equal a break of confidentiality by itself, or does material information have to be breached to reach the point. Traditionally the right to (confidentially) interview has been protected by the courts,” he said.

It’s unclear what the end game would be in this type of legal action, but it does complicate matters for Nutanix as it transitions to a new chief executive. Ramaswami took over from co-founder Dheeraj Pandey, who announced plans to leave the post last summer.

The lawsuit was filed Monday in Superior Court of the State of California, County of Santa Clara.

Dec
09
2020
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Nutanix brings in former VMware exec as new CEO

Nutanix announced today that it was bringing in former VMware executive Rajiv Ramaswami as president and CEO. Ramaswami replaces co-founder Dheeraj Pandey, who announced his plans to retire in August.

The new CEO brings 30 years of industry experience to the position, including stints with Broadcom, Cisco, Nortel and IBM — in addition to his most recent gig at VMware as chief operating officer of Products and Cloud Services.

At his position at VMware, Ramaswami had the opportunity to see Nutanix up close as a key competitor, and he now has the opportunity to lead the company into its next phase. “I have long admired Nutanix as a formidable competitor, a pioneer in hyperconverged infrastructure solutions and a leader in cloud software,” he said in a statement. He hopes to build on his industry knowledge to continue growing the company.

Sohaib Abbasi, lead independent director of Nutanix, says that as a candidate, Ramaswami’s experience really stood out. “Rajiv distinguished himself among the CEO candidates with his rare combination of operational discipline, business acumen, technology vision and inclusive leadership skills,” he said in a statement.

Holger Mueller, an analyst at Constellation Research, says the hiring makes a lot of sense, as VMware is quickly becoming the company’s primary competitor. “Nutanix and VMware want to be the same in the future — the virtualization and workload portability Switzerland across cloud and on premise compute infrastructures,” he told me.

What’s more, it allows Nutanix to grab a talented executive. “So hiring Ramaswami brings both an expert for multi-cloud to the Nutanix helm, as well as weakening a key competitor from a talent perspective,” he said.

Nutanix was founded in 2009. It raised more than $600 million from firms like Khosla Ventures, Lightspeed Ventures, Sapphire Ventures, Fidelity and Wellington Management, according to Crunchbase data. The company went public in 2016. Investors seem pleased by the announcement, with the company stock price up 1.29% as of publication.

May
07
2020
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As private investment cools, enterprise startups may try tapping corporate dollars

Founders hunting down capital in the middle of this pandemic may feel like they’re on a fool’s errand, but some investors are still offering financing, even if the terms might not be as good as they once were. One avenue that appears to remain open: corporate venture capital.

The corporate route offers its own set of unique challenges, depending on the philosophy of the organization’s investment arm. Some are looking strictly for companies that fit neatly into their platform, while others believe a solid investment is more important than a perfect fit.

Regardless of style, these firms want their investment targets to succeed on their own merits, rather than as part of the organization the funding arm represents. To get the lay of the land, we spoke to a couple of firms that take very different approaches to their investments: Dell Technologies Capital and Salesforce Ventures.

Corporate venture is a different animal

Corporate venture funds aren’t typically as large as private ones, but they have a lot to offer, such as global sales and marketing support and a depth of knowledge that offers direct benefits to a young upstart. This can help founders avoid mistakes, but there is danger in becoming too dependent on the company.

The good news is that these companies are often not leading the round, but are instead providing some cash and guidance, which leaves entrepreneurs to develop and grow on their own. While the pandemic is forcing many changes in approaches to investment, the two corporate venture capital firms we spoke to said they will continue to invest, and their theses remains pretty much the same.

If you have an enterprise focus and you can convince these firms to take a chance, they offer some interesting perks a private firm might not be able to, or at the very least provide a piece of your funding puzzle in these difficult times.

Feb
01
2020
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What Nutanix got right (and wrong) in its IPO roadshow

Back in 2016, Nutanix decided to take the big step of going public. Part of that process was creating a pitch deck and presenting it during its roadshow, a coming-out party when a company goes on tour prior to its IPO and pitches itself to investors of all stripes.

It’s a huge moment in the life of any company, and after talking to CEO Dheeraj Pandey and CFO Duston Williams, one we better understood. They spoke about how every detail helped define their company and demonstrate its long-term investment value to investors who might not have been entirely familiar with the startup or its technology.

Pandey and Williams reported going through more than 100 versions of the deck before they finished the one they took on the road. Pandey said they had a data room checking every fact, every number — which they then checked yet again.

In a separate Extra Crunch post, we looked at the process of building that deck. Today, we’re looking more closely at the content of the deck itself, especially the numbers Nutanix presented to the world. We want to see what investors did more than three years ago and what’s happened since — did the company live up to its promises?

Plan of attack

Jan
28
2020
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Nutanix execs discuss how they built their 2016 IPO roadshow deck

Bringing a startup from idea to IPO isn’t an easy task, but if you can build something successful, one major milestone is to go public. Before your Nasdaq debut, however, there’s a major step — building a deck and taking it on the road for investors.

Cloud computing company Nutanix went public in 2016, so we spoke to CEO Dheeraj Pandey and CFO Duston Williams, both of whom were with the company for the big event, to learn about how a company should define itself for investors as it seeks to go public.

Who are you?

Building a roadshow deck is an exercise in communications as founders attempt to carefully lay out their company’s core purpose and how they built it, along with their ethics, aspirations, financials and value proposition. In a nutshell, an effective roadshow deck summarizes who you are, what you stand for and why your company will make a good investment.

CEO Pandey says that in addition to investment bank Goldman Sachs, a number of people from the company helped craft the presentation. “Fifteen people across different functions were involved in building the deck. That included product and marketing, to finance and corporate communications, to legal. I think there were at least six different departments,” he said.

Aug
13
2019
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Clumio raises $51M to bring enterprise backup into the 21st century

Creating backups for massive enterprise deployments may feel like a solved problem, but for the most part, we’re still talking about complex hardware and software setups. Clumio, which is coming out of stealth today, wants to modernize enterprise data protection by eliminating the on-premise hardware in favor of a flexible, SaaS-style cloud-based backup solution.

For the first time, Clumio also today announced that it has raised a total of $51 million in a Series A and B round since it was founded in 2017. The $11 million Series A round closed in October 2017 and the Series B round in November 2018, Clumio founder and CEO Poojan Kumar told me. Kumar’s previous company, storage startup PernixData, was acquired by Nutanix in 2016. It doesn’t look like the investors made their money back, though.

Clumio is backed by investors like Sutter Hill Ventures, which led the Series A, and Index Ventures, which drove the Series B together with Sutter Hill. Other individual investors include Mark Leslie, founder of Veritas Technologies, and John Thompson, chairman of the board at Microsoft .

2019 08 12 1904

“Enterprise workloads are being ‘SaaS-ified’ because IT can no longer afford the time, complexity and expense of building and managing heavy on-prem hardware and software solutions if they are to successfully deliver against their digital transformation initiatives,” said Kumar. “Unlike legacy backup vendors, Clumio SaaS is born in the cloud. We have leveraged the most secure and innovative cloud services available, now and in the future, within our service to ensure that we can meet customer requirements for backup, regardless of where the data is.”

In its current iteration, Clumio can be used to secure data from on-premise, VMware Cloud for AWS and native AWS service workloads. Given this list, it doesn’t come as a surprise that Clumio’s backend, too, makes extensive use of public cloud services.

The company says that it already has several customers, though it didn’t disclose any in today’s announcement.

Jun
28
2017
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Nutanix introduces two new tools in quest to simplify hybrid cloud management

 Nutanix began as a storage company, but always had a broader view of the computing world. As company president Sudeesh Nair told me, they started with storage because they believed legacy storage was holding back data center transformation. Today the company made another step beyond that initial vision, introducing two new products that they see as part of a larger hybrid cloud operating system. Read More

Jun
04
2016
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How chief information officers become chief innovation officers

polygon clouds and balloon In the early 1900s, large organizations needed another type of CEO: Chief Electricity Officer. Before there was an accessible and reliable power grid to plug into, organizations that needed electricity employed a CEO to make sure they had steady and cheap access to this vital commodity. Given the aging data center architecture, it’s now the Chief Innovation Officer who is increasingly… Read More

Jan
29
2016
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Our 2016 Predictions For The IPO Market

New York Stock Exchange 2015 was not a good year for IPOs — it was actually the worst year for tech IPOs since the financial crisis in 2009. More and more startups are opting to remain private for longer periods of time. And while we still haven’t seen any IPOs in 2016, the slowest start since 2009, eventually venture-backed companies need to go public — if only to raise additional financing to… Read More

Aug
27
2014
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Nutanix Lands $140M On $2B+ Valuation, IPO Could Be Next

Data Center Sign Nutanix, a five-year old converged infrastructure provider, announced $140M in Series E funding today, based on a whopping $2B+ valuation. The funding comes from the two biggest Boston public market investors, which chose to remain nameless (but Boston isn’t that big so we’re probably talking Wellington Management and Fidelity).
The company most recently scored $101M in January… Read More

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