Hyperconverged infrastructure provider Nutanix is now a public company after raising almost $238 million in its initial public offering.
Company officials on Sept. 29 announced it had sold 14.87 million shares of its common stock at a price of $16, which was more than the expected price range of $13 to $15. Nutanix debuted Sept. 30 on the NASDAQ under the symbol "NTNX." The company reported is valued at more than $2 billion.
Nutanix co-founder, Chairman and CEO Dheeraj Pandey rung the opening bell at the NASDAQ Sept. 30.
The vendor's march to its much-anticipated IPO was longer than initially expected. Nutanix officials initially filed their IPO prospectus in December 2015 and had expected launch its IPO the following month. However, they delayed the IPO as market for IPOs in the tech space took a downturn. Financial analysts are taking the fact that shares of the company's stock sold above the expected price as a good sign for the tech industry.
Nutanix, which is not yet profitable, saw revenue in its fiscal year 2016 reach about $445 million. Over the course of the year, the vendor bought cloud companies PernixData and Calm.io.
Nutanix plays in the fast-growing hyperconverged space, competing with a broad range of established companies like VMware and smaller vendors like SimpliVity and Pivot3. Such companies sell software for hyperconverged environments, which grew out of efforts by OEMs to sell converged systems that offer pre-integrated compute hardware, disk storage, networking gear and systems management software in response to customer demand for infrastructure that is to deploy, manage and scale, is cost-effective and is virtualized. Organizations are looking for ways to simplify their data centers environments, which have become increasingly complex due to such trends as mobility, data analytics, the proliferation of mobile devices, the growing adoption of virtualization and the cloud.
Hyperconverged infrastructure arose in 2014, with a key difference being that they combine storage and compute functionality into a single, highly virtualized server-based solution. Systems makers are building out their hyperconverged portfolios, often in partnership with the growing number of software vendors, including Nutanix.
The hyperconverged segment is now the fastest growing segment in the larger converged infrastructure market. In the second quarter, while the overall converged infrastructure space grew 12.1 percent year-over-year to $2.9 billion, revenue in the hyperconverged segment jumped 137.5 percent, to $480.6 million, according to IDC analysts. They expect the hyperconverged market to grow from $981.91 million last year to more than $4.7 billion by 2019.
Kumar Srikantan, CEO of Nutanix partner Pluribus Networks, said in an email to eWEEK that the performance of the company's IPO is an indication about the needs of the IT industry.
"Nutanix is part of the new generation of information technologies that challenges the status quo for organizations that have traditionally needed to build bespoke systems that are complicated and expensive," Srikantan wrote. "The market's reaction is a clear indication that there is a need to simplify the process of delivering IT services, and build agile systems that can be responsive to new business demands."
Editor's note: This story was updated to correct the revenue figure for Nutanix and to add the comment from Pluribus Networks.