Thirty Minutes with Dheeraj Pandey, Co-Founder and CEO of Nutanix

Dheeraj PandeyI am really excited to share with you the interview I did with the CEO of my company, Nutanix. It is exciting to me because I get to bring you a personal side to one of the most dynamic and fastest growing companies in the tech industry. I have never worked for a company where the CEO would give me any time (except to meet with a really large customer) but as I was new at Nutanix I thought “what the heck…just ask him”. So I did…and he graciously accepted. I think you’ll discover at the end of this why I am so happy to call Nutanix home and why Dheeraj has not only been named to the CNBC Top 50 Disruptors list, but also the EY 2015 Entrepreneur of the Year in Northern California for Emerging Technologies.

DM: First of all, thank you for taking the time out of your calendar to sit down with me. I know you have a lot of other demands for your time so I appreciate it. Before we get started, I wanted to let you know that I have changed some of the questions I was going to ask because as I was interviewing others – Steven Poitras and Sudheesh Nair, the questions and their answers just seemed to flow together without my having to lead them. Kind of fascinating really. It’s like everyone is in lock-step in their own way and I am suspecting that is one reason why Nutanix is able to execute like we do. There is a real passion here. Not only a passion about what they are doing, but people are actually having fun doing it. I have been at places where the people were talented, but they were certainly not having any fun. It was a job. But here, in the five weeks I have been onboard it is clear that things are different.  know I just got here, but I am having the time of my life working here.

DP: Let’s talk in one more year and see if you are still having fun, because that is the real test of any corporate culture. Can you do it at scale. When we were a company of fifty we used to talk about culture. When we got to one hundred I would lose sleep wondering if we could keep the culture alive at two hundred, then four hundred. By and large we have been able to sustain it until now, but you never know when that tipping point comes and something breaks.

DM: That’s a good lead-in to my next question, because one of the things that I have heard both inside and outside the company is that Nutanix is one of the fastest, if not the fastest growing infrastructure companies since Sun Microsystems. I don’t know if that is true or not and how exactly someone would measure that using todays standards, but clearly there is a rapid acceleration taking place. We saw it at Citrix Synergy with the amazing interest that people had in the technology there. I heard from the Events team that the Microsoft Ignite conference was very successful and that VMworld is always one of those “unbelievable” shows for us. Understanding the interest that people have around Nutanix at these events, and considering the customer growth that we have experienced, what is it that a company like Nutanix who is not as large as EMC or someone like that, able to do what Nutanix has done by displacing very well-known solutions, seemingly at will. I know at one of my jobs I lost deals to Nutanix every single time I went up against it. I am talking about companies with seemingly unlimited resources. I’d try to give away my product just to keep Nutanix out, and the response was always “that’s great, but I am still buying Nutanix.” These larger legacy companies don’t understand that. They can’t understand why they still lose, even when you offer to give your product away for free.

DP:  From the beginning we said “let’s think about the end-user and the customer, and what is in it for them.” Those companies and the people that work for them are here to do a job just like us. They spend their days running the IT practice for their various companies and they have agendas and goals to meet. If we help them do their jobs better and allow them to have a simpler life in the process, that is a huge win for them personally and professionally. When you do that, it’s easy to compete against free. VMware competed really well against free if you go back to 2006 – 2007 when you look at XenServer and companies like that. So free is not a panacea for everyone,even though there will be those who place cost above everything, because clearly economics is a part of it. There are, after all, other things that go along with that. As a company we have really focused on the word “empathy”. And when I say the word empathy I am talking about empathy for the employees of our customers and partners. We are constantly thinking about them. I mean the corporation is essentially the end result of delighted employees, customers and partners. If we do it right by them I think it comes back to us. That is the way all of us here at Nutanix think as we build this thing. We say “don’t just optimize for the short-term and our company, but think about them and they will give it back to you”. Most people do business with people they actually like. It’s not all about the product and technology. When they shake hands they want to feel good about doing business with the guy on the other side of the desk. So we are trying to be a company that other people like to do business with. Again the question is, can we keep doing that at scale? Only time will be able to answer that, but you certainly hope so.

DM: That’s true as I can tell you from my experience in competing against Nutanix. Your customers actually liked their reps. I have worked for companies where my customers would tell me “I like your products, but please don’t bring your sales rep with you any more. We don’t really care to talk to them.” That attitude kind of shocked me, but when I looked at the way the reps at some of those companies did things, it was pretty hard to say you liked them. But down in Florida, one of the Nutanix reps Fred Moscone…his customers absolutely love him. Not only because he’s a nice guy, but the product that he is representing really does make the lives of his customers easier and less complicated when it comes to meeting the goals you mentioned earlier. And he is excited about representing it. Like all Nutanix reps he truly believes in it. Take that one step more though. When I ate lunch in the cafeteria the other day I was amazed that everyone got their lunch, and then rather than running back to their desk they hung out and enjoyed each others company. They appear to really like each other. Not just small groups of two and three people, but entire tables are pushed together like one big family, and that is not something I am used to coming from larger legacy companies.

DP: It goes back to the culture of the company, because culture is more than just how our employees are taken care of or how they are able to do their job day in and day out in a way that works for them. Culture is also very much how we interact with our customers and the way we behave with partners as well. This trilogy of employees, customers and partners is to us what culture really means. We are all in this together with a set of common goals, so that tends to help bring people together.

DM: At Citrix Synergy we had some customers that were speaking at our booth and it was clear that they felt like they were a part of the Nutanix family. It was good to see because they really felt involved with the product and the company. As a new employee that is something that is very nice to see. I love happy customers because it is nice to have them want to see you when you walk in the door.

But let’s shift gears for a minute. When you think back to the Linux “wars” with people flaming each other about which version of Linux is better than another and I know at one point there were over forty distributions of Linux that people were maintaining. In the end though it really boiled down to just a few that are widely used in the Enterprise today. Linux went from a college project to a mainstream technology and somehow survived the wars to get where it is. When you think about the Hypervisors, and I am not asking you to name names, how do you see the Hypervisor battle shaking out? What I mean by that is when you consider Acropolis and all that it does, it may be one of the most important and innovative products in the history of the Hypervisor and Virtualization.

DP: If you look at what your Mac OSX did to FreeBSD, or what Android did to Linux, they elevated the discussion to something that was higher-level than the base technology. We don’t relate Mac OSX to an underlying Open Source operating system. We don’t relate Android to an underlying Open Source operating system. We firmly believe that the Hypervisor needs to get elevated to a higher level abstraction where it is about ease of use and really, we are talking about the advent of a Cloud-generation operating system. Ten years ago nobody expected us to be talking about the software defend data center. Hypervisors were built for tens or hundreds of machines. In the new Cloud world of today where there are a lot of service providers and a lot of consolidation happening there is a lot of consolidation happening, companies are leveraging multiple service providers as part of their operations strategy. The IT world is looking for a “Cloud Generation” Hypervisor, or Cloud Generation operating environment where you have RESTful interfaces with consumer-grade graphical user interfaces for people who may not want to script things. You need the world’s best storage stack to move data back and forth between Clouds and between the Cloud and the data center. You need paranoid security and all of these things need to be native to the product. When that happens you are really taking about the next generation operating environment. The operating environment is not what was conceived back in the day when we were talking about tens or hundreds of virtual machines being the entire data center. That is part of our goal…how do we elevate this technology to the next level and if possible build the “vMotion” of the next decade? The ability to drag and drop applications from one Cloud to another Cloud or from the Cloud to the data center…that is what the vMotion of the next decade looks like. Like most things in life today mobility is vital. VMware sold mobility with vMotion. And mobility, if you go deeper, is really about choice. When you can drag and drop an app from here to there; when you can easily service the hardware or upgrade the Hypervisor non-disruptively you have commoditized the underlying technology. That is why cell phones have evolved as they have. Voice over IP phone didn’t really take off because there was a limit with regards to the network it was attached to. But the cell phone allows you to go virtually anywhere. So when you think about the Hypervisor we really need to think about providing that mobility so the Hypervisor and hardware are not the limiting factors.

DM: I have always been curious about something. What keeps the CEO of a company like Nutanix or any start-up, up at night?

DP: The CEO of a start-up is supposed to be a “fixer”. And really, that is the job of the CEO of any company. A fixer of relationships or a fixer of almost anything that is broken. There are enough leaders for departments or divisions. It is the cross-function, cross-company stuff that needs to be taken care of, so we don’t think of it from a very narrow prism. We tend to look at things holistically whether it is a customer, partner or whatever. We also want to build the culture of innovation, of hacking, of development, or thinking about how we can make things better for the customer. We want to think about career development for our employees, creating win-win situations for partners…that stuff. Are we doing those intangibles (right brain things) right? Because before you know it your company is in the mode of managing tangibles. Top line, gross margin, EPS…that stuff. Wall Street’s job is to keep you focused on the tangibles which is the left brain of a company. That is important, but the job of a good CEO is to find that balance between the right and left brain. It is that balance that will make a company become a long-lasting company

DM: One of the other things that I am continually amazed by was how approachable you are whether it is on Social Media or in a direct email requesting an interview. I am not used to that. I mean, I copy my direct manager on anything I send you, but I don’t feel the need to go through every layer of management to communicate and that’s different from where I have been in the past. At the other companies I have been at, writing the CEO directly requesting an interview would have been a career-limiting move. I don’t get that feeling here are all. In fact, when I first wrote you asking for the interview I called you Mr. Pandey and your reply was “Please call me Dheeraj”. I appreciate that. Can you tell me is that a leadership style that you learned, or did you look around and say “I’ve seen how everyone else does things. I want to be different”. Can you tell me a little about that?

DP: I think there are several reasons I think that way. The way I grew up and the way that people helped me. Some of these values are just intrinsic to egalitarianism and a lack of class / caste, hierarchies and things like that. Having come to this country I realized what Democracy means. So when you consider all of those things along with the intrinsic value of human to human touch, respecting others and getting the respect back…it’s one of the most powerful things that good leaders can do. The best leaders also have large hearts. I’m not saying I have one, but I always keep reminding myself that at the end of the day, a large heart really means you are thinking for the big picture…the long term, instead of just think about the short-term. You need to be results oriented and execution minded, but there is nothing saying you can’t balance that with culture and thinking about others. You can suck it in from everyone else, but that only goes so far. But if you really think about what win-win means, I think good things happen that way for everyone.

DM: One of the companies that I worked with was a start-up that was the founder’s sixth company that he personally started. He had sold the other five for somewhere around two billion dollars, so when he was interviewing me I just had to ask him why he was still doing this. He didn’t need the money, but I had to know. His answer was not what I expected. He told me he enjoys seeing how many millionaires he can make after a sale. Did anything like that go through your mind at the beginning of this?

DP: Yes actually, but let’s think about what that means, because it’s about more than the money. It’s the fact that people feel accomplished at the end of every day. Obviously it sets them free to start their own companies once they have made millions, but it’s also the sense of accomplishment that they have when they can say “I helped build this”, and I constantly think about that. It’s one of the reasons we have never really built this company for an acquisition. We said “let’s build a large company where people build their careers and their families, friendships and relationships. I’d love for people to ask themselves “can I retire here?”

DM: That question actually leads me to another. When someone is a part of what I’ll call the “start-up family”, are they watched closely and when they do well, are they offered another opportunity to do another start-up? I mean, is it something where if you don’t knock it out of the park that’s it…no second start-up for you. Talk about that for a moment if you don’t mind.

DP: Building a start-up is not all that different from building a career if you think about it, and what happens along the way is that there are going to be successes and there are going to be bumps in the road. Sometimes big bumps. You’re not always going to succeed every time. But people also look at your work ethic. Anyone who works hard and who gives it their best, at least to me and the management team, we’re trying to figure out how to improve the environment so they can enhance their productivity because sometimes hard work does not equate to productivity for various reasons. But this is what constantly learning is all about. Can we learn as a company about building a more productive environment, and can the employee learn about working smarter, not harder. This company is about the people. It is built on the backs of people who believed and invested, and without people there is no company. No manufacturing, no development, no sales. By giving people a way to work smarter and be successful, we’ll build this and hopefully they were have a lot of fun in the process.

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