3 Stages To The Nutanix Strategy Going Forward

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In a note released on Monday, Credit Suisse highlighted the three stages that would help Nutanix Inc NTNX achieve its three-pronged vision. The firm noted that the company's vision is to make IT infrastructure invisible so that IT resources may be dedicated to business outcome and market competition.

Analyst Kulbinder Garcha listed the three parts of the company's vision as follows:

  • Nutanix' solution is web-scale, allowing the system to scale infinitely, enabling the customers to reap advantages of savings on both operating expenditure and capital expenditure.
  • The management is simple, which suggests reduced operating expenditure and productivity gain.
  • Solution helps link private cloud with public cloud to maximize cost effectiveness of overall IT infrastructure.

Citi also reflected on the three stages to the achieve the vision:

  • Nutanix is to develop a software-defined storage solution compatible with ESXi and Hyper-V. The company's distributed file system virtualizes storage within each Nutanix appliance to form a storage fabric with advanced storage services.
  • The company would also make virtualization invisible with its own proprietary Acropolis hypervisor, with Distributed Storage Fabric and App Mobility Fabric serving as two pillars.
  • Make cloud invisible by managing both private and public cloud on a single interface called Prism.

Citi initiated coverage of the company with an Outperform rating and a $38 price target, as it believes the company has a unique technological advantage that will disrupt the IT infrastructure market, specifically in the form of hyperconvergence. The firm sees sustained financial performance due to a sizable total addressable market, an effective sales motion and a well considered business model that relies on software IP.

At time of writing Nutanix shares were down 2.22 percent at $29.11. The stock has been up about 12.34 percent from its listed price of $26.50, although has come off from the closing high of $44.46 reached on October 3.

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Posted In: Analyst ColorPrice TargetInitiationAnalyst RatingsCitiKulbinder Garcha
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