Nutanix CEO Pandey to step aside as Bain Capital steps in

maze
Nutanix CEO Dheeraj Pandey announces he will be stepping down from the company he co-founded once his replacement is found. (Pixabay)

In a move seemingly out of leftfield, Nutanix CEO Dheeraj Pandey announced Thursday he would be leaving the company he co-founded in 2009.

Also on Thursday, Nutanix announced that private-equity firm Bain Capital would become the company's leading investor by buying $750 million in convertible senior notes. That transaction is slated to close next month.

The third piece of big news for Nutanix on Thursday was the company decided to announce its Q4 2020 earnings five days early.

FREE DAILY NEWSLETTER

Like this story? Subscribe to FierceTelecom!

The Telecom industry is an ever-changing world where big ideas come along daily. Our subscribers rely on FierceTelecom as their must-read source for the latest news, analysis and data on the intersection of telecom and media. Sign up today to get telecom news and updates delivered to your inbox and read on the go.

Nutanix saw its stock increase by almost 17% Thursday night after Bain's investment and Pandey's exit were announced. Bain will place two of its managing directors onto Nutanix's board.

While the timing of Pandey's planned departure and Bain's investment could indicate that the latter had lost faith in Pandey, Nutanix wasn't exactly struggling to make ends meet. As one of the first hyperconverged infrastructure (HCI) vendors, Pandey grew Nutanix into a $1.6 billion software company that added hybrid cloud software and services to its portfolio.

“Co-founding and leading Nutanix for the last 11 years has been the single most rewarding experience of my professional career," Pandey said in a statement. "Guided by a vision of making IT infrastructure so simple that it becomes invisible, our team has built Nutanix into a leader in cloud software and a pioneer in hybrid cloud infrastructure solutions. I am confident there is no better time for me to make this transition to a new leader who can guide Nutanix through its next decade of growth and success.”

Among others, Nutanix competes against large companies such as VMware, Cisco, HPE and Red Hat. According to research by Omdia, HCI shipments were estimated to have grown 24% year-over-year from 2018 to 2019, and are expected to chalk up a 56%, five-year CAGR by 2023. In the second quarter of last year, HCI revenue totaled $1.9 billion, which was a 27% year-over-year increase.

RELATED: Thriving software-defined-storage market will ramp up to $86B by 2023: report

Pandey plans to leave once Nutanix finds his replacement. A CEO search committee of the Nutanix board of directors is currently underway to find a replacement. The Nutanix board will interview candidates with the help of a leading global executive search firm.

“Silicon Valley’s history is filled with storied founders and legendary visionaries and Dheeraj Pandey has earned a place among them," said Nutanix board member Ravi Mhatre, in a statement.

On Thursday, Nutanix reported fourth quarter earnings of $328 million, up 9% year over year. Nutanix posted a net loss of $185.3 million in Q4.

Nutanix ended the fourth quarter with 17,360 end-customers. Fourth quarter customer wins included AIB Group, Cadence Design Systems, Dongfeng Renault, MayBank Singapore, and QBE Insurance, among others.