Technology
SPR’s latest channel checks indicate that large deals are finally progressing after previous delays as enterprises were still evaluating their alternatives and negotiating with Broadcom. However, some channels criticise NTNX for its rigid pricing strategy, suggesting the firm should adopt a more aggressive sales approach like Pure Storage. As expected the Dell / NTNX partnership continues to grow and SPR also believes NTNX is making progress on enhancing its Acropolis Hypervisor (ACH), that some estimated previously had ~80% of the functionality of VMware ESX. Enhancements to ACH will make it easier for NTNX to replace VMware, especially in complex operating environments.
Edition: 206
- 07 March, 2025
Technology
Sales Pulse continue to pick up more positive views of the tailwinds for Nutanix and examples of deals that are driven by Broadcom’s acquisition of VMware however, channels are quick to state that the move from VMware is challenging, at least for large users. In Nutanix upcoming report we expect to see more evidence of growth from the Broadcom/VMware acquisition as well as the other catalyst that we have discussed in recent notes (increase in partnerships including Cisco, Dell and additional VARs), but rapid acceleration seems unlikely. Many speakers at Nutanix’ Next Conference in Barcelona discussed their move from VMware to Nutanix.
Edition: 188
- 14 June, 2024
Broadcom's uplift in pricing shocks VMware users
Technology
SPR provides recent field feedback on AVGO’s actions, users reactions and vendors who are benefitting. While many acquisitions do not produce the increases in revenue and cost synergies that were promised, based upon AVGO’s aggressive approach, SPR expects it will immediately deliver strong results for both metrics. Despite the disruption and animosity it is creating, SPR is picking up many examples of end users who are paying much more to AVGO then they were prior to this acquisition (price hikes of 100-1000% have been reported). These end users are locked into some or all the VMware products. The cost of switching is very high and, in some cases, will take years. Other vendors discussed include Nutanix, IBM Red Hat and HashiCorp.
Edition: 183
- 05 April, 2024
Tech Trends: Key themes and questions for 2024
Technology
Areas of focus for Sales Pulse in the year ahead will include: 1) Cybersecurity - changing end user priorities and competitive dynamics. 2) UC/CC/CP - will a reduction in seat count negate increased ARPU from AI features? How will continued M&A impact this market? 3) Vendors benefitting from the rapid growth in DevOps / DevSecOps. 4) Gap in orders in 1H24 for networking market as end users digest backlog and we await ramp of next generation. 5) Broadcom acquisition of VMware driving end users to look at alternatives, to the benefit of IBM Red Hat and Nutanix. 6) Ramp of funding for Broadband Infrastructure. 7) Impact of CSP Marketplaces on Distributors and VARs.
Edition: 177
- 12 January, 2024
Technology
Sales have fallen for three quarters, from a growth rate of 51% last June to -23% in the quarter just ended. Margins have collapsed (gross margins down from 48% to 42% and EBITDA margins from 39% to 31%) and the company has added $1bn of debt since 2017. The share price is only down 13% YTD and is still 10% higher than a year ago. Eric Fernandez believes UI warrants a closer look as a potential short candidate with the stock trading at high multiples of both sales and earnings (46x Jun 22 and 35x 2023 earnings). Other companies flagged in Eric's ‘Breaking Estimates’ model are Nutanix, Upstart and Corsair Gaming.
Edition: 137
- 10 June, 2022
Best short ideas in Software
Technology
Former software engineer, Srini Nandury, who was the original bear on Nutanix and JFrog, highlights three names that continue to offer material downside…
Gitlab (GTLB) - Reminds Srini of JFrog; market fragmentation and intense competition will limit growth.
HashiCorp (HCP) - Growth to slow more quickly than investors realise; VMware catching on faster as it did with Nutanix. Stock could easily fall to $22.
UiPath (PATH) - Turned bearish with the stock at $70 last June. Expensive solution in a commoditising market; Microsoft is quickly vaulting to the leadership position in RPA.
Edition: 131
- 18 March, 2022