IT capabilities’ resiliency, agility, flexibility, and scalability have become significant competitive differentiators and play an important role in driving business success. Internet companies, in particular, faced extreme dependency on IT as they aggressively competed for first-mover advantage in markets that often presented minimal barriers to entry for new competitors. 

These companies required IT infrastructure to enable rapid development and deployment of new applications and services, effectively handle unpredictable and large-scale usage demands, and minimize capital and operating expenditures. 

Traditional IT infrastructure solutions failed to meet these requirements. As a result, these companies developed their infrastructure stacks built with web-scale architectures based on advanced distributed systems technology. These infrastructure stacks, driven by powerful proprietary software, provided greater agility, highly automated operations, predictable and linear scalability, and lower total cost of ownership.

Today, organizations of all sizes across all industries are seeking to leverage IT capabilities as a competitive advantage and are also experiencing the challenges associated with traditional IT solutions. Nutanix came up with a Cloud Platform that consists of software solutions and cloud services that power customers’ enterprise infrastructure. In this strategy story, we analyzed the business model of Nutanix and learned what does Nutanix do and how does it work.

What does Nutanix do? How does Nutanix work?

Nutanix, founded in 2009, is an American cloud computing company that sells software, cloud services (such as desktops as a service, disaster recovery as a service, and cloud monitoring), and software-defined storage. Nutanix aims to provide a single, simple, open software platform for all hybrid and multi-cloud applications and their data. 

Nutanix offers a cloud operating model across the edge, private-, hybrid- and multi-cloud environments for all applications and their data. Nutanix’s solutions allow organizations to simply move their workloads, including enterprise applications, high-performance databases, end-user computing, virtual desktop infrastructure (“VDI”) services, container-based modern applications, and analytics applications between on-premises and public clouds.

Nutanix has pioneered the hyper-converged infrastructure (“HCI”) category, initially combining the disparate IT silos of compute, storage, and networking into a single on-premises product which offered simplicity, the lower total cost of ownership, scalability, and customer choice. 

Nutanix continued to innovate and develop Acropolis Hypervisor (“AHV”) – Nutanix’s native hypervisor designed to run all virtualized applications. To give Nutanix’s customers even more choices, Nutanix engineered its software solutions to run on a variety of server platforms, decoupling Nutanix’s software from its Nutanix-branded hardware appliances and powering a variety of on-premises private cloud deployments.

That transition has continued with the adoption of “cloud” as a mainstream IT paradigm, which has motivated IT professionals to move toward hybrid cloud architectures that allow businesses to simultaneously utilize a private cloud powered by Nutanix software and third-party, public cloud infrastructures for maximum flexibility. 

Although today Nutanix’s customers primarily use Nutanix’s enterprise cloud platform to power their on-premises private cloud deployments today. However, Nutanix’s solutions simplify the complexities of multi-cloud environments with a single management console for automation, cost governance, and compliance. 

The result will be an enterprise cloud platform that empowers Nutanix’s customers to unify operations, infrastructure, and data services from the edge to private and public clouds, allowing IT to choose the right cloud for each application. 

What is the business model of Nutanix?


Leveraging the foundation of Nutanix’s core HCI technology, the Nutanix Cloud Platform delivers a rich set of products, solutions, and services to enable Nutanix’s customers to simply manage their private cloud and, increasingly, their public and hybrid multi-cloud environments. All of Nutanix’s offerings are supported by a unified control plane, unified Application Programming Interfaces (“APIs”), security, and lifecycle management. 

The Nutanix Cloud Platform is available in private cloud deployment and is increasingly available on public cloud, through managed service providers and telcos, and in the future, as-a-Service. 

Nutanix Cloud Infrastructure (NCI) – Nutanix’s offerings in hybrid cloud infrastructure combine Nutanix’s core HCI software stack (AOS) and Nutanix’s native, enterprise-grade hypervisor (AHV), and also add in support for virtual networking, disaster recovery, network and data security and Kubernetes container runtime. 

Nutanix Cloud Management (NCM) – Nutanix’s offerings in cloud management include Nutanix’s control plane providing management and analytics across the Nutanix Cloud Platform, which delivers integrated management, capacity planning, robust operational analytics, automated remediation, self-service capabilities, and one-click administration (previously known as Prism Pro/Ultimate). 

Nutanix Unified Storage (NUS) – Nutanix’s Unified Storage product offering includes scale-out storage services that consolidate the management of structured and unstructured data. Nutanix customers can simplify storage operations while delivering enterprise-grade NFS and SMB file services (Nutanix Files) and S3-compatible object services (Nutanix Objects) at nearly any scale. 

Nutanix Database Service (NDB) – Nutanix also provides automated database management to simplify database administration and to efficiently manage database copies that proliferate in most IT environments (previously known as Nutanix Era).

Desktop-as-a-Service – Nutanix’s Desktop-as-a-Service product offering provides a rich set of end-user computing (“EUC”) services that can reduce the cost of delivering virtualized desktops and applications while improving performance and scalability. 

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Nutanix’s Partners

Nutanix has established relationships with the channel, OEM, ecosystem, and cloud partners, all of which help to drive the adoption and sale of Nutanix’s solutions with Nutanix’s end customers. 

  • Channel Partners: Nutanix’s channel partners sell Nutanix’s solutions to end customers and, in certain cases, may also deliver Nutanix’s solutions to end customers through a managed or integrated offering. 
  • OEM Partners: OEMs (Dell, Lenovo, etc.) typically pre-install Nutanix’s software on hardware appliances and sell it to end customers. Nutanix’s offerings may also be sold through Nutanix’s OEMs and delivered directly to Nutanix’s end customers. 
  • Ecosystem Partners: Nutanix has developed relationships with Nutanix’s developer, application, networking and security, data protection, hardware, and infrastructure partners to validate and integrate their products with Nutanix solutions and engage in joint sales training and enablement. 
  • Cloud Partners: Nutanix has partnered with cloud providers like AWS and Microsoft to realize its vision of a hybrid multi-cloud. 

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Nutanix’s End Customers 

Nutanix’s solutions serve a broad range of workloads, including enterprise applications, databases, virtual desktop infrastructure, unified communications, and big data analytics, and Nutanix supports both virtualized and container-based applications. 

Nutanix has end customers across various industries, such as automotive, consumer goods, education, energy, financial services, healthcare, manufacturing, media, the public sector, retail, technology, and telecommunications. 

Nutanix also sells to service providers who utilize Nutanix’s enterprise cloud platform to provide a variety of cloud-based services to their customers. Nutanix had a base of over 22,000 end customers as of July 2022, including approximately 980 Global 2000 enterprises. 

Revenue model

Nutanix made $1.58 billion in FY22. Nutanix primarily has a subscription-based business model. Nutanix generates revenue primarily from the sale of Nutanix’s enterprise cloud platform, which can be deployed on a variety of qualified hardware platforms or, in the case of Nutanix’s cloud-based SaaS offerings, via hosted service or delivered pre-installed on an appliance that is configured to order. 

Revenue by Service

Product revenue — Product revenue consists of software and hardware revenue. A majority of Nutanix’s product revenue is generated from the sale of Nutanix’s enterprise cloud operating system. Nutanix also sells renewals of previously purchased software licenses and SaaS offerings. Product contributed ~48% to Nutanix’s revenue in FY22.

Support, entitlements, and other services revenue — In this segment, Nutanix generates revenue primarily from software entitlement and support subscriptions, including the right to software upgrades and enhancements and technical support. This segment contributed ~52% to Nutanix’s revenue in FY22.

Before fiscal 2019, Nutanix delivered most of its solutions on an appliance. Thus, Nutanix’s revenue included the revenue associated with the appliance and the included non-portable software, which lasts for the life of the associated appliance. 

However, starting in fiscal 2018, Nutanix transitioned its business model transition toward software-only sales and subscription-based. More of its customers began buying appliances directly from OEMs while separately buying licenses for Nutanix’s software solutions from Nutanix or one of its channel partners. 

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Revenue by Type

  • Subscription revenue — Subscription revenue is generated from selling software entitlement and support subscriptions, subscription software licenses, and cloud-based software as service offerings. Subscription is the primary business model of Nutanix that contributed 90% to its revenue in FY22.
  • Non-portable software revenue — Non-portable software revenue includes sales of Nutanix’s enterprise cloud platform when delivered on a configured-to-order appliance by one of Nutanix’s OEM partners or Nutanix. 
  • Hardware revenue — In transactions where the hardware appliance is purchased directly from Nutanix, Nutanix considers itself the principal in the transaction.
  • Professional services revenue — Nutanix also sells professional services with Nutanix’s products. 

Results of Operations

As per Nutanix’s FY22 annual report,


A passionate writer and a business enthusiast having 6 years of industry experience in a variety of industries and functions. I just love telling stories and share my learning. Connect with me on LinkedIn. Let's chat...

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