Nutanix Shifts Strategy Toward Cloud Platform Beyond Hyperconverged Roots

Nutanix is shifting its strategic focus from hyperconverged infrastructure (HCI) to a broader cloud platform model. The company identified external storage and enterprise AI as primary growth engines for fiscal 2027. This pivot marks a departure from its foundational technology as the company seeks to capture a larger share of the enterprise IT stack.

"Nutanix is no longer a HCI company. That is how we started, that is what got us on the map and brought us to where we were. But today, we are a much broader cloud platform company," said Rajiv Ramaswami, CEO of Nutanix, during the Goldman Sachs Communacopia + Technology Conference.

Strategic Pivot Toward AI Infrastructure

As part of its expansion, Nutanix is investing in internal AI capabilities to reduce reliance on external frontier models. The company recently deployed $20 million in internal GPU clusters designed to handle the majority of its artificial intelligence workloads.

"We invested $20 million in our own clusters, running open weight models, and we expect to service about 80% of our needs through those clusters and go to the frontier model for the remaining 20%. For that 80%, it is a one-time CapEx spend. We spent $20 million. That will go take us for about five years or so," Ramaswami said.

By utilizing open-weight models for 80% of its requirements, Nutanix aims to optimize its operational costs. The firm projects operating margins between 24% and 25% for fiscal 2027, with a long-term objective of pushing those margins beyond 30%.

Expanding Beyond HCI

Nutanix's business model transition is supported by data regarding its current install base. While HCI was the company's entry point into the market, it now accounts for approximately 20% of the firm's total install base. The remaining 80% of the company's footprint utilizes external storage connected to third-party servers, a segment the firm is targeting with its cloud platform offerings.

This transition reflects the company's move from a niche infrastructure provider to a comprehensive software-defined platform. By diversifying its offerings, Nutanix is aligning its revenue streams with the shift toward cloud-agnostic enterprise environments, where customers prioritize flexibility across multiple storage and compute architectures.