The big news being discussed at VMworld 2014 this morning is the Nutanix, Inc. Series E funding round, which generated $140 million in financing. Nutanix, which provides a cost-effective method to move data around in the enterprise, is now valued at $2 billion, having raised a total of over $300 million in funding. That valuation is nearly ten times the projected run rate revenues that Co-Founder and CEO Dheeraj Pandey had previously mentioned to theCUBE hosts at last year’s VMworld conference, leading one analyst to wonder of Nutanix could’ve raised more money.

During the Intro segment to SiliconANGLE’s third day of live coverage from VMworld with theCUBE, hosts John Furrier and Dave Vellante discuss Nutanix’s valuation with Wikibon.org Senior Analyst Stu Miniman. Furrier thinks the valuation is low, saying Pandey “could have got more.”

Vellante chimed in, citing the San Jose Mercury news, which says “Nutanix is on track to become the next Oracle, Corp. or VMware, Inc.” Certainly that software stack model has proven itself financially, said Furrier, “they’ve got some meat on the bone, some revenues there.”

A force to be reckoned with

Solid revenues and a growing client base are traits that make Nutanix worthy of being likened to Oracle and VMware. With 300 employees and a presence in 25 countries, Nutanix is quickly becoming a force to be reckoned with in the enterprise data center. As Pandey detailed on theCUBE at VMworld 2013, his company’s success is founded on its Virtual Computing Platform, which collapses compute and storage into a unified resource tier that more reliable and easier to manage than traditional SANs and NAS.

“The convergence of servers, storage and networking in the datacenter has created one of the largest business opportunities in enterprise technology, and Nutanix is at the epicenter of this transformation,” said Pandey in a statement.

Nutanix claims annual bookings exceeding a run rate of $200 million, with over 800 customers, nearly 30 of which have spent more than $1 million on Nutanix products and services. The company’s tactics around converged infrastructure have also landed Nutanix key partners in its expansion, including a landmark OEM agreement with Dell, Inc. to build the XC Web-scale Converged Appliance.

Flush with cash and supported by a burgeoning ecosystem, Nutanix is positioned to take a notable portion of the converged infrastructure market. As the enterprise looks to simplify IT and run more efficient data centers, converged infrastructure offerings are beginning to take precedence. Spending on converged infrastructure is projected to exceed $17 billion by 2016, according to an IDC report, as interest only rises, growing at a compound annual growth rate (CAGR) of 54.7 percent, from $2.0 billion in 2011 to $17.8 billion in 2016. Converged infrastructure is expected to account for 12.8 percent of total storage, server, networking and software spending by 2016, up from only 3.9 percent in 2012, the IDC estimates.

To meet growing demand, Nutanix has built an international distribution channel to raise awareness and increase accessibility of its technology. This year has been particularly busy for Nutanix, growing its sales departments after a hefty funding round in January that led to analyst buzz around an initial public offering (IPO), along with a string of strategic partnership announcements through the summer. Aside from the Dell team up, Nutanix signed distribution agreements with Arrow Electronics, Inc. and Avnet, Inc.

Regarding today’s funding round, Nutanix has not disclosed the name of its investors, saying only that “the round was led by two premier Boston-based public market investors” in a statement. However, Reuters reports that the two unnamed lead investors are Fidelity Investments and Wellington Management, signaling east-coast ties that could broaden Nutanix’s international growth goals and possibly lead to an IPO.

What’s after convergence for Nutanix?

Next for Nutanix is a further exploration of data center efficiencies, as the company looks to tackle web-scaling pertaining to storage configurations and data migration.

“We have come a long way since we’ve started,” said Binny Gill on Monday. The Chief Architect at Nutanix was among the first executives to sit down with theCUBE at VMworld this week.  “Early on we talked about converging the hardware. We’ve gone through all of that, now the entire world understands why convergence is a good thing. Now we’re talking about web scale,” providing a solution for the large scale at which the storage functions, Gill explained.

To achieve Nutanix’s evolving dream, Gill said that data silos within the enterprise need to be dissolved, especially if data migration is to be seamless and cost-effective. See the video below, where he details exactly how Nutanix can address these issues.

 .

Contributors: Rachel Schramm

feature image by SiliconANGLE