Ladies and gentlemen, please welcome Chief Communications Officer and Senior Vice President, Corporate Marketing and Investor Relations, Tonya Chin. Welcome to the Nutanix Investor Day. We're so glad that you could join us. I'm Tonya Chin, Chief Communications Officer and Senior Vice President of Investor Relations, and I'll also be the moderator of today's event. We're coming to you from sunny California, where vaccinations have made it safe for us all to be together. We have three exciting hours planned for you. First, I'd love to cover a little bit about the forward-looking statements we'll be making in today's presentation. During today's presentations, management will make forward-looking statements, including but not limited to statements regarding our business plans, goals, strategies, and outlook, including our go-to-market strategy, our competitive position, market opportunity, and projections about the size of our total addressable market, the factors driving our growth, our financial performance in future periods, expected results and targets of our financial and operating model, the timing and impact of our current and future business model transitions, our plans to use new or different metrics to supplement our financial reporting, our ability to maintain and expand upon our customer and partner bases, and the benefits and capabilities of our platform, solutions, products, services, and technology, our plans regarding our new solutions, products, services, and product features and technology, including those that are still under development. These forward-looking statements involve risks and uncertainties, some of which are beyond our control, which could cause actual results to differ materially and adversely from those anticipated by these statements. For a detailed description of these factors, please refer to our SEC filings, including our most recent annual report on Form 10-K and quarterly reports on Form 10-Q. These forward-looking statements apply as of today, and we undertake no obligation to revise these statements after today's presentations. As a result, you should not rely on them as representing our views in the future. Please note, all financial measures we use in today's presentations, except revenue, are expressed on a non-GAAP basis and have been adjusted to exclude certain charges. We have provided, to the extent available, reconciliations of these non-GAAP financial measures to GAAP financial measures in the appendix of the applicable presentation. During our event, we have four presentations. In between, we have a few short videos so you can hear directly from our customers. On the agenda today, our CEO, Rajiv Ramaswami, will be going through his strategy and priorities, as well as an overview of the markets that we serve. Next, Rajiv Mirani will be going through our products and solutions. Chris Kaddaras will come and discuss his go-to-market strategy. We'll wrap up with Duston Williams, who will be giving a financial overview, including a midterm model. A copy of each of the slide decks will be available after each presenter speaks. You can find it by clicking on the presentations tab within this platform or on our investor relations website. You'll have two opportunities to ask questions during today's event. First, after Rajiv Ramaswami speaks, we'll do a short Q&A and we'll ask you to keep your questions just to the content that he covered, strategy and his priorities. You'll have a much longer session available at the end after Duston goes that will include Tarkan Maner, our Chief Commercial Officer. To ask a question, please type your question into the ask box and an event moderator will help you. We'll get to as many questions as we can during the session, and if we aren't able to get to your question, we'll get back to you. With that, I'll turn it over to Rajiv Ramaswami. Rajiv? Hello, and welcome to our Investor Day. I'm here to talk to you today about our company strategy, our product portfolio, our go-to-market, and our expectations for growth and profitability. To get started here, Nutanix pioneered the hyperconverged infrastructure market. We continue to be the market leader with a growing base of 19,000 plus customers who trust us with their critical infrastructure. We're addressing a very large market opportunity of greater than $30 billion. In addition to our core markets, we see substantial growth opportunity in adjacent markets, another $30 billion. As we look forward, we are going from being a hyperconverged infrastructure company to a hybrid multi-cloud company. We're building a single platform for hybrid multi-cloud with unparalleled simplicity. From a go-to-market perspective, as we move forward and complete our journey to subscription, we expect to see substantial go-to-market leverage through our renewals business coming in, as well as our move to solution selling and leverage of partnerships. Over the next few years here through FY 2025, we expect to grow our top line at 25%. We expect to be cash flow positive in 18 months by the end of next calendar year, which will be the first half of fiscal 2023. We expect to be operating income positive in FY 2023 as well. Against that backdrop, let's get started. I've been here for about six months, and I want to start by giving you my initial impressions of what's going well. Customers love Nutanix. I've spoken to hundreds of customers who uniformly say that they love to partner with us. They like the product experience. They like the simplicity. They like working with us overall. That comes from a true culture of customer obsession at Nutanix. Every employee from our engineer to our frontline salesperson to our support folks are committed to customer success, and that ultimately translates into customer loyalty and long-term partnerships with our customers. We have an exceptional talent base and a strong culture of innovation. All in all, a solid foundation that we are building upon for the future. Now let's talk about what is really changing with the company going forward. Historically, we've been focused as an on-prem company, focusing on our customers' data centers. Going forward, we are front and squarely focused on the cloud. Focused on hybrid multicloud and building this hybrid multicloud platform. We've always had great products and a tradition of innovation. As we scale our business, we are looking at going from products to at-scale solutions. Now, historically, as Nutanix started, we were a startup. We had to build everything ourselves. We had to go to market ourselves, and there was a culture where we had to do everything ourselves. Again, as we scale our business going forward for the next five to 10 years, we are leveraging our partnerships. We are leveraging our partnerships across our OEM partners, our cloud partners, our ecosystem partners, and last but not the least, our channel partners. As we move to a subscription company, we're moving from just landing and expanding at our customers to focusing on customer adoption, customer consumption, and renewals. As COVID has taught us, in the past, we were very much physical event-oriented. Our marketing efforts were all very much physical. We've learned how to be very efficient at digital marketing, and those learnings will stay with us as we come out of COVID into this new world, and they're helping drive significant efficiency, at the same time maintaining great pipeline. Now, in the past, we were focused largely on growth, and we would spend whatever it took to drive the growth we needed. Going forward, we're going to be very disciplined in our investments. We're going to focus on growth first, for sure, but also profitability. Finally, in the past, growing up as a startup, we had a good culture of diversity, but it was opportunistic. Going forward, I look at diversity as a competitive advantage and a competitive differentiator for us. We want Nutanix to be a place where everybody can bring their true selves to work and be part of the mission. We're going to dive into details here next. Let's talk about the market. Ever since analysts started tracking the market, we've been the market leader in HCI. After all, this is a category that we pioneered, and we continue to be the leader here today with north of 50% in market share. This is true in terms of whether it's Gartner or Forrester, all the analysts tracking the market acknowledge this. As we look at the addressable market opportunity here, it's very large. It's the entire three-tier market for virtualization software as well as storage software, and it's a large market. It was $21 billion in 2020, and it's growing to $30-plus billion by FY 2025. If you look at this large market, HCI, hyperconverged infrastructure, continues to eat away into this market and take on more and more of this market. In 2020, HCI was a $3 billion market. In 2025, HCI is expected to grow to $7 billion, and that still leaves plenty of room to continue to eat into this market. The reason this is happening is because today, HCI is a platform for all workloads. HCI can handle pretty much any application that enterprise customers have. We started out with virtual desktop infrastructure, VDI, but today we've expanded with HCI to handle any workload that's available in the enterprise. We can handle all of the core business apps, we can handle IT infrastructure, and we can handle a set of web apps and others. Essentially, anything that can be virtualized on an x86 today can be run well on a HCI platform. That leaves plenty of opportunity for additional growth. We're not stopping there. As we go forward, we are focused on how we can continue to expand the addressable markets that we play in. Here is the core HCI market, as we discussed in the previous slide. Now, we see an opportunity to expand HCI and make HCI the platform for hybrid multi-cloud. As we do that, we are focused on what we call hybrid cloud infrastructure, which is a superset of HCI and expands our market to be able to capture workloads running in public cloud as well, in addition to those running on-premises. On top of that hybrid cloud infrastructure, which we are going to talk a lot more about, we also have significant adjacent opportunities with our emerging products in areas like disaster recovery, cloud management, files and object storage, database automation, and database as a service, which is one of our hottest products, and desktop as a service. Together, this represents over a $60 billion market opportunity for us. We are fundamentally not limited by market opportunity. It's all about execution and capturing our fair share of this huge market in front of us. Let's talk about cloud. Here's a recent survey from Morgan Stanley that talks about where applications or workloads are landing. The one thing that's very clear here is even by 2023, enterprise workloads are going to be everywhere. They're going to be in the data centers, they're going to be in edge locations, they're going to be in public clouds, and some of them are going to be in colos and managed hosted providers. This is driven by a number of factors, including data governance, data privacy, security, compliance, edge use cases where you need low latency and you need to run your workloads right at the edge, and as well as public cloud costs. Public cloud costs are an important factor here. Some of you may have read about a recent article from my friend Martin Casado at Andreessen Horowitz, what he said is very simple. If you're operating at scale, the cost of cloud can at least double your infrastructure bill. Fundamentally, what this says is if you build out your infrastructure yourself and manage it well, you can be super cost efficient. This combination of factors will mean that application workloads in the enterprise are going to be running everywhere, not just only in the public cloud, or not just only in on-prem. That said, we all agree that public clouds are going to be an integral part of enterprise infrastructure going forward. Let's talk about how companies are using the public cloud. Here's data from another survey talking about the mode of deployment. What this says really is that hybrid cloud is the preferred multi-cloud deployment. If you look at the survey data, very few companies are only using an on-prem data center or only using a single public cloud. About 10% of the companies surveyed, and only 10%, were exclusively using multiple public clouds without an on-prem presence. The vast majority of companies surveyed, 82%, operate in a true multi-cloud hybrid world where they have both their private on-prem data centers and one or more public clouds. That is the world we're going to live in for the next many, many years. In this world, Nutanix sees a significant opportunity to provide a cloud platform. We got our start by busting IT silos across compute, storage, and networking. We put those together and drove dramatic TCO, total cost of ownership, reductions for our customers, provided simplicity in operations. We essentially consolidated data centers and built what we call a one-click private cloud. Going forward, we see the exact same opportunities in the multi-cloud world. Today, each cloud is a silo by itself. Each cloud has a unique set of services, a unique set of capabilities, and APIs. IT staff needs to be trained specifically for each of these clouds. We see an opportunity to bust these cloud silos by providing a single hybrid multi-cloud platform that hides all these underlying complexities. That is a true opportunity, and a big one, in front of Nutanix. As we look at our company vision going forward, this is what we say, make clouds invisible. Hide the underlying complexities of all these clouds. Why? That our customers can focus on running their businesses and focus on their business outcomes without having to worry about how to manage and operate across all of these cloud silos. That's our vision. How are we going to deliver to that vision? Here's our mission. We want to maintain our tradition of delighting our customers. Every word here, by the way, is chosen very carefully. We want to delight our customers with a simple, maintain our hallmark simplicity. Open. We want to be open. We want to provide flexibility and choice for our customers across choice of hardware, choice of hypervisors, choice of clouds going forward. Hybrid multi-cloud platform, software platform, and our tradition of being really good at how we manage and store data. By providing a rich set of data services with the goal of helping our customers build, run, and manage any application. This is really what we are about going forward as a company. How are we doing that? What is our product portfolio? Now, in the past, you heard about many of our product names, and we had a great history of innovating and building many products, including our core AOS product and a number of new products along with that. As we move forward, we are bringing those products together and simplifying how those get delivered to our customers. This one platform for our hybrid multi-cloud starts out with hybrid cloud infrastructure as the foundation, where we bring our compute, storage, network virtualization all together into this cloud infrastructure platform. We complement that with cloud management, which includes application automation, it includes AI-powered operations, it includes governance, and it includes self-service capabilities for our customers to operate these services. On top of this, we provide a set of very specific services around unified storage, files and objects, around database automation, database as a service, and desktops as a service. This is how we're going to be bringing our products together into solutions that our customers can easily buy, easily consume, easily deploy. This product portfolio, you're going to hear more about this from Rajiv Mirani and how we're going to roll this out over the next several quarters. With this product portfolio, we can address any application, traditional applications, modern cloud-native applications, the emerging AI/ML workloads, these new edge workloads, pretty much any applications that companies run. We can run any of those applications anywhere they want to. In these private clouds, as well as in the public clouds of their choice, or if they want to go partner with a managed service provider or a telco, we can enable that to happen as well. This is the Nutanix Hybrid Multi-Cloud Platform. Let's talk about how all of this comes to life in a real-world customer example. Estes is a full-service freight transportation provider. They're the nation's largest privately owned freight shipping company. Estes' new CIO brought in a cloud-first mandate. Their disaster recovery solution was nearing their refresh cycle, and their IT teams were looking to explore using the public cloud for their DR workloads as a first step in their hybrid cloud journey. Estes was already a Nutanix customer, using Nutanix's private cloud platform for their VDI workloads. They love the performance, scalability, and ease of use and wanted to leverage this in the public cloud for DR. Our cluster solution helped them quickly move their DR to AWS, reducing their DR costs while continuing to use the same familiar, easy-to-use management interface to manage private and public clouds. Clusters showed quick time to value and has now become the preferred technology for their hybrid cloud deployment. We are seeing an increasing number of customers using our hybrid multi-cloud solution for disaster recovery, data center consolidation, and elasticity. Now, with our hybrid multi-cloud platform, we also see a huge opportunity to get leverage through strategic partners who can both create add-ons and extensions to the platform itself, but also help us from a go-to-market perspective. We start out with our global OEM partners, especially HPE and Lenovo. You've seen how, for example, Lenovo announced their TruScale offering, which takes our platform, combines it with their PCs and servers, and delivers a complete solution for virtual desktops as a service in a subscription model. We see the same kind of collaboration happening with HPE, and we're also seeing strong interworking at the account level between our sales teams partnering to win deals together. We also have a growing set of cloud partnerships. Our first public cloud offering was on AWS using AWS' bare metal offerings. We now have a deep partnership with collaboration with Azure. We are among the first to be using Azure's bare metal service to go deploy our cluster solution. We also talked about how Azure Arc can be used to manage Kubernetes clusters on top of Nutanix running on-prem. We are also building out a growing base of managed service providers who can take the Nutanix Hybrid Multi-Cloud Platform and deliver that as-a-service to their customers. As you look at our ecosystem, our customers can confidently put together solutions from best-of-breed providers, our hybrid multi-cloud stack, together with security solutions from Palo Alto, together with virtual desktop solutions from Citrix, and get solutions that meet their entire business needs. This is critically important for us and helps us scale as we grow our next $ several billion. I'll give you an example here of how these partnerships come to play in a real-world customer example. This is with a large global bulge bracket bank. They were looking to modernize their global virtual desktop deployment, serving about 100,000 users, very large-scale deployment. They wanted to improve the performance, they wanted to improve the resiliency of the platform, and quickly scale based on their business needs. They looked at obviously every vendor that is out there, and Nutanix's partnerships with key providers, Citrix and HPE, were critical to allow them to select Nutanix as their partner. Citrix was an incumbent VDI solution. They did a proof of concept, they picked Nutanix. Our tight integration with HPE helped make this easy and seamless for them. At the same time, we also worked with all the global systems integrators that this particular bank was working with, and every one of them ultimately baked Nutanix into the solution that they were proposing. The customer ultimately chose to go with Atos. Again, this relationship during this process of how our field teams work together across our teams working with the HPE sales teams, with the Citrix sales teams, and partnering with the GSI Atos, was critical in us being able to win a large deal like this. This freedom of choice that we provide to our customers, along with the focus on partnerships, helps deliver a well-integrated solution to our customers who are looking to put together best-of-breed providers and build world-class infrastructure solutions. Let's move forward now and focus on our go-to-market transformation. We've talked about our journey to subscription, and a lot of this is about building out this efficient subscription go-to-market engine. Over the last several quarters, Chris and the team have done a great job with sales execution. We've been very consistent in terms of being able to predict and overachieve. We have moved our entire sales team to be compensated on ACV, annual contract value, away from total contract value. This provides great flexibility to customers. They can pick shorter terms if they choose to. It helps us get better deal economics, and it helps us attach more emerging products to upsize our deals. We are also very focused on helping our sellers be more productive and driving new ACV productivity. Things like solution selling, partner leverage, all of these help us. We are front and center focused on building our renewals engine. These subscription renewals can be done at much lower cost than new ACV. 80% lower acquisition cost for subscriptions comparable to other industry benchmarks. Our high customer satisfaction also leads to great retention rates for us. Last but not least, we are also focused on marketing efficiency. We've talked a lot about how we are going to be a much more digitally focused marketing team here going forward. It helps us build our pipelines much more efficiently, and also over the last several quarters, develop a much higher quality pipeline. Chris and the team are doing a great job here along with Ben. Chris will be covering this in more detail. The net effect of all of this is that our sales and marketing costs going forward are going to come down. They're going to come down from being 79% of revenue in FY 2020 to about 43%-47% of revenue in FY 2025. Through a combination of all of these productivity gains, efficiencies, and building up of this renewal stream at a much lower cost, together are going to drive us to much more efficient go-to-market. Now let's talk about the financials and what we can expect here as all of this starts coming together, our product portfolio, our go-to-market subscription transformation as they all come together. We've talked about this growing base of renewals that we've been building over the last few years. As those renewals come and mature, they're going to continue to grow. We see over the next few years here, renewals growing at 50% CAGR for us through FY 2025. As we talked about, we are very much engaged in terms of driving that efficiently, driving that with high retention rates, and doing so cost-effectively as well. That's a great underlying base that we did not have until now, and it's just starting to build up. 50% CAGR, driving a big chunk of our growth. Then on top of that, you layer in new ACV. This is new business that our sellers, our reps are going out there and getting. You've seen the market sizes there that we have, and you've seen that the core market itself, HCI market, if you ask Gartner, is growing at 15%-16% CAGR. We certainly can grow at that pace, if not faster, because we also have not just being leaders in the core, but also all these emerging products that get on top. 15% CAGR for new business is I think very, very doable. All we need to do is 15% to drive a total growth here of 25% CAGR over the next few years as a company. We are again focused on things like higher rep productivity, continuing to focus on managing our rep count and increasing reps wherever we need to, as well as driving both core and emerging products to get to this total picture. Again, you can expect us to drive 25% top-line growth over the next several years. At the same time we're driving top-line growth, we are also focused on profitability. We have a clear path to profitability. If you look at free cash flow, we expect to be free cash flow positive by the end of next calendar year, 18 months from now, which is the first half of our fiscal 2023. Going forward beyond that, continuing to generate good free cash flow. Not just there, we also expect to get to profitability for operating income. Operating profit, we expect to be profitable by the second half of fiscal 2023 or the first half of fiscal 2024, beyond that, continuing to drive steady operating profit. Duston's going to cover this in more detail. Profitability is driven by our growth in renewals. These renewals happen at much lower cost, as well as the go-to-market efficiencies that we are driving across the company. As we move forward, the one thing that does not change for us is our obsession with customers. If we make our customers successful, everything else will fall in place. Today, we have a base of over 19,000 customers, and we're adding about 700 new customers every quarter. Our retention rates are north of 90%. Our customers love doing business with us. Our net promoter score over the last four quarters is at 93. We've been able to maintain that even as we've scaled our customer base. Our customers like to do more with us over time. Among our larger customer base, which is the Global 2000, a typical customer, after their initial purchase, spends 16 times as much with us over the next several years after the initial purchase. I want to leave you with our key takeaways. We are the clear leader in this fast-growing hyperconverged infrastructure market, addressing a market of more than $30 billion. We are building on that by extending our hyperconverged infrastructure platform to a true hybrid multi-cloud platform, growing our addressable market to include public clouds. On top of that, building a set of emerging solutions that lead to our ability to address an additional $30 billion of market opportunity. We're doing that by creating a single platform, one platform for hybrid multi-cloud, that has great simplicity and allows our customers to seamlessly operate in a multi-cloud world. We're getting significant go-to-market leverage through our focus on renewals, driving that efficiently, our focus on solution selling, and our focus on leveraging partnerships. From a financials perspective, we expect to grow our top line at 25% CAGR through FY 2025. At the same time as we're driving our top-line growth, we're also focused on profitability. We expect to be cash flow positive by the second half of calendar 2022, which is only 18 months from now, or the first half of our fiscal 2023, and we expect to be operating profit positive soon thereafter. With that, I'll hand it over to Tonya to lead us through Q&A. Tonya? Hi, everybody. Welcome to the first portion of Q&A for our session today. Rajiv, great presentation. Thank you. Thanks so much for that. Thank you. As a reminder, if you want to ask a question, please click Ask at the lower right-hand part of your screen. With that, we'll get started. Our first question comes from Katy Huberty from Morgan Stanley. Go ahead, Katy. Rajiv, after six months in the CEO role, talk to us about what has surprised you, both on the upside as well as where do you feel like there's the most work to do, particularly as it relates to the path to profitability that you just rolled out? Thank you, Katy. I talked about some of this in the presentation, but as I came in from the outside, I had a good view that Nutanix had a solid platform with a lot of customer loyalty. The more time I spent with both the team and our customer base, that actually got reinforced in spades. The customers love working with us. The product works. It's simple, it's resilient, it's high-performance. That was a good pleasant surprise, even more so on the upside than I'd anticipated coming in from the outside. The foundation was there, very much so. On the other side of the question, I think you also talked about what were some of the other on the downside piece. I think I saw a lot of innovation in the company, which was a big positive, I also saw a lot of individual local optimization rather than a set of global priorities that the company was executing to. We set those priorities now, and now it's all about executing to those priorities. Great. Thanks so much, Rajiv. Our next question comes from the audience, and it's, could you characterize the customer feedback on Clusters and how they perceive it versus other hybrid multi-cloud offerings? Sure. Clusters is fairly early. We've had it in the market for about nine months now. The initial traction is quite good with several customers adopting it for some very specific use cases, which are data center consolidation, elastic capacity expansion into the public cloud, disaster recovery. As we talked about in the examples, we have several customers now getting into production with it. The traction is quite strong. They love the fact that it's simple to use, like as with all our products, simple from a license perspective. They can buy a license from us and use it anywhere they want. Competitively, it's proving to be a good differentiator for us in allowing our customers to extend their operations into the public cloud quite seamlessly. Great. Our next question is coming from Ittai Kidron from Oppenheimer. Go ahead, Ittai. Thanks. Hi, Tonya, and hi, Rajiv. Thanks for the presentation today. Great targets you've laid out there. I had a question about the adjacent market opportunities that you laid out. Help me understand what is it about your HCI core that makes it a good place, natural place to consolidate such adjacent opportunities. How critical is it for you to execute on them to deliver on these new great targets that you laid out? What is it about your go-to-market motion, t hat needs to change in order for you to be able to capitalize on them. Okay. Good set of questions there, Ittai. Let me try to make sure I answer all of them. If I don't, Tonya, you can forecast. First of all, I think many of these adjacent market opportunities are really attached to the core. Our core is our cloud infrastructure, right? Hybrid cloud infrastructure that we talked about. If you look at cloud management, operations automation, a lot of that is an attach sale on top of our cloud infrastructure platform and can extend into the public cloud. That's a natural attached motion to what we have. When you look at the other adjacencies, unified storage that we talked about. That again, is very much built on top of our HCI platform. It uses the underlying capabilities of the HCI platform to deliver objects, to deliver files, for example. When you look at database automation, database-as-a-service, that has the potential to be a big standalone market opportunity for us. In its version 1 that we have out there right now, we are leveraging the underlying HCI platform to do a lot of database functions very efficiently. For example, things like copying data, snapshots, being able to restore instantly, create a time machine. These are all critical capabilities for databases for which we leverage the underlying HCI platform. When you run a database on Nutanix HCI platform, you get a lot of simplicity and benefits in terms of how you can manage your databases. That's the attachment, the database side. Container computing has always been a workload, one of our historically, one of the first workloads that landed on HCI. From that perspective, that continues to be a healthy market for us. That's the connection between these adjacent markets and the core. When you look at the go-to-market motion that you talked about. A lot of the GTM here is really an add-on on top of the core, and some of this is going to be packaged that way as well as we talked about in the product portfolio packaging. Some of these will require us to go build more specialist teams, which we have done. For example, when you look at databases, we are selling into database admins, not traditionally our infrastructure folks. Where needed, we will augment, and we have augmented by adding some specialists, especially in our technical pre-sales engineering team. Largely, I think, these adjacent markets are so tied to our core markets that we feel we can expand and we can actually drive the growth that we're talking about. To your last question there in terms of are these an important component of our overall growth? Absolutely, yes. I mean, we've factored that into the financial model that we've talked to you about, which is a combination of both core growth as well as growth in all these adjacent markets. Great. Thank you, Rajiv. Our next question is coming from Jason Ader from William Blair. Sorry, go ahead, Jason. Thanks, Tonya. Hi, Rajiv. I guess my question is on competition and what you see as the biggest long-term competitive threat for the company, your old company, or the cloud guys, Amazon, Microsoft, Google. Yeah. Look, Jason, we compete against both, right? We compete and we partner, right? It's an interesting ecosystem here. As workloads go natively to the public cloud, those are workloads that go away from our platform. Of course, VMware is always a competitor. In terms of how we differentiate and how we create room for ourselves and a unique value proposition. Compared to the public cloud folks, what we deliver is a cloud platform that enables our customers to seamlessly run their workloads across any place they want, any of the public clouds they want. We talk about our customers living in a multi-cloud world, and we provide a platform that allows them to hide the underlying complexities and really run their workloads where they want to. That includes both their existing workloads as well as new workloads. The cloud guys themselves, the public cloud providers are adopting a hybrid strategy. They may come on-prem as well, it's really, either in their cloud or in on-prem. Largely, the public cloud has been used for net new applications. Existing applications running in a public cloud hybrid scenario would likely need to be re-platformed or refactored. That's the differentiation compared to the public cloud folks. When you look at the other player that we talked about, VMware, what we do is, I mean, we talked about how our platform is really simple. It's robust, it's high performance for all workloads. We provide a unique set of data services. We allow our customers to manage all forms of data, structured, unstructured data, and manage that really well. That combined with the freedom and flexibility of choice that we provide, choice of hardware, choice of hypervisors, choice of public clouds, and choice of cloud-native stacks. We are not tied to any single cloud-native stack. We work with every cloud-native stack that's out there. You've seen our announcements with Azure Arc, for example, Google Anthos, et cetera, right? OpenShift, if customers want to run, all of these can be run on top of a Nutanix stack. Great. Thank you, Rajiv. Our next question comes from Jack Andrews from Needham & Company. Jack asks, "What's the hardest problem you're trying to solve right now? Boy, that is a good question. When I came in, I think, the challenge here was actually to align our companies around a set of priorities, which we have now done so. The hard work ahead is actually about executing on all the priorities. We talked about what we're going to do. We've said that. We're going to go off and do it. It's that execution that's the hard problem that we have to go tackle across all the priorities that we've laid out. Great. Thanks, Rajiv. This is our last question for this segment. This comes from Matt Hedberg from RBC. Go ahead, Matt. Hey, good morning, guys. Thanks for taking the time, and Rajiv, this has been great so far. Your ACV billings targets look great, especially when considering this growing renewal portfolio, but also I think the path to profitability is something that we all appreciate. My question is, when thinking about the path to FY 2025 ACV billings targets, what does that mix of SaaS look like out there versus today? Just qualitatively, how should we think about that growing SaaS mix over time? Yes, Matt. As you know, we are continuing to increase the SaaS portion of our product base, and over time, more of our products will get SaaSified. Today, for example, our desktop as a service is delivered as SaaS. Our disaster recovery solution is delivered as a SaaS service. Pure SaaS for us is still a small component of our overall revenue mix. Over time, we expect to take more and more of our product portfolio and offer that as a service. Some of it will be done directly by us, some of it will be done through partners. For example, we've recently announced some partnerships with MSSPs, managed service providers, and they're going to be delivering an as-a-service service themselves. This will be a gradual growth. I don't expect the SaaS offerings to dramatically change our revenue profile during the course of what we've outlined here. I would expect us to be delivering more capabilities as SaaS over time, and that'll be a gradual uptake in the component of revenue that we see. Great. Thank you, Rajiv, and thanks everybody for the great questions. Next up is Rajiv Mirani. First we have a customer video from RNL. Please welcome Chief Technology Officer, Rajiv Mirani. Thanks, Tonya Chin. Wow, that was a great customer video. Hi, welcome to the product section of Nutanix's Investor Day. Over the next few minutes, we're going to cover a couple of topics. The first is our streamlined product portfolio, where we continue to extend our lead on our core HCI and management offerings. We've also taken many of our products and consolidated them down to fewer bigger bets. These are more closely aligned with customer use cases and solutions and represent a significant opportunity for us in terms of our addressable market. The second area we will cover is our hybrid multi-cloud strategy. The hybrid multi-cloud approach takes the best of public and private computing and wraps it with a consistent user experience and unified operations. We feel it's the ideal approach for organizations that are dealing with the complexity of multiple clouds, public, private, and managed clouds. Last year, we introduced our Clusters offering. Clusters takes our entire software stack and makes it available on public cloud bare metal. To complement Clusters, we have added support for cloud-native applications. Between Clusters and cloud-native support, customers can run any application, modern or traditional, on Nutanix infrastructure in the location of their choice. Let's start by taking a look at why Nutanix wins in the marketplace with our current offerings. The first is the power of simplicity. We make it truly simple for customers to build and operate in a cloud-like manner with capabilities like self-service, built-in automation, built-in security, but most importantly, zero downtime, one-click operations. Our platform also has the scale and resiliency to run any application. We started with relatively simple applications like VDI, but over time have built in the scale to run mission-critical business applications, and now cloud-native and AI/ML workloads as well. We also have best-of-breed data services. This starts with a complete offering of files, objects, database automation, and then we layer in capabilities like data protection, mobility, security, disaster recovery, and so on. Finally, we offer customers the most choice in terms of consuming all our parts of our product portfolio. As an example, we have our own hypervisor, AHV, but customers are free to bring their own. This degree of flexibility extends beyond our product to things like licensing. Customers can use their Nutanix entitlements freely between private data centers and public cloud. These core strengths are at the center of everything we do and shape our thinking as we expand our product portfolio and strategy. Now let's take a look at the product portfolio. If you're familiar with our existing portfolio, you'll remember that we have a lot of products with a lot of interesting names. What we're doing is we're taking these products and combining them into fewer tiered offerings and bundles. The idea is to align these closer with customer solutions and use cases so that a single use case can be addressed by one product or at most two. We also take the opportunity to simplify metering so that our solutions will be available on a single metric, something like cores or terabytes of storage. We also wanted the optionality to provide for a variety of delivery options to our customers on the private data center, on the public cloud, and increasingly as-a-service. Finally, we're aligning our R&D investments around fewer bigger bets and really focusing on a consistent user experience and interoperability between our products. Let's take a look at the new product portfolio. We're building the portfolio around five offerings, hybrid cloud infrastructure, cloud management, and three products with independent go-to-market motions, unified storage with files and objects, database automation and as-a-service, and Desktop-as-a-Service. Double-clicking into hybrid cloud infrastructure. This offering contains everything you need to build public cloud-like infrastructure. It has our core HCI stack, it has our AHV hypervisor, but also adds in support for virtual networking, containers, security, and disaster recovery. In terms of our existing portfolio, hybrid cloud infrastructure falls in AOS, AHV, but also Flow and Karbon. Cloud management is our multi-cloud operations governance and automation product. It contains everything you need to operate in a cloud-like manner with capabilities like self-service, showback, chargeback, and so on. Cloud management truly is multi-cloud. You can use cloud management against our hybrid cloud infrastructure offering, but you can also use it against other on-premises stacks, as well as against public cloud applications. In terms of our current offerings, it falls in Beam, Calm, and Prism Pro. As I said, we have three product offerings that are layered on top of this with desktop as-a-service, database automation and as-a-service, and unified storage. We'll cover a couple of those a little bit later. Underpinning all of this, we have a unified control plane, unified APIs, built-in security, and lifecycle management. To reiterate, the platform runs all applications from VDI to enterprise business critical applications to cloud native. This entire stack is also available on a variety of substrates. This includes private cloud, increasingly public cloud, MSPs and telcos, and going forward as-a-service as well. Let's turn to our core stack, and we'll start by talking about the AHV hypervisor. AHV adoption is strategic for us since it drives adoption of the rest of our portfolio. We've seen this in customer after customer, that customers who use AHV tend to use more of our emerging products. AHV is also central to our hybrid multi-cloud strategy since our clusters offering runs AHV. We've added major new capabilities to AHV, and one of the ones we're most excited about is virtual networking. Virtual networking lets us create multi-tenant overlay networks for a customer on-premises, and we make it really simple for them to do so simply by choosing the right license tier. No professional services required. Virtual networking also enables customers to extend their networks into the public cloud so that they can move workloads back and forth without having to redesign their network or re-IP their workloads. Besides virtual networking, we've added more capabilities around data protection and trusted computing. In fact, AHV today has all the capabilities our enterprise customers want. As a result, AHV adoption's been ticking up so that more than half our nodes today ship with AHV installed on a trailing 4-quarter basis. This sets us up well for our hybrid multi-cloud strategy. Another thing that is central to hybrid multi-cloud is security. Security is cited as a top consideration by our customers in their journey to hybrid multi-cloud. Customers want to have consistent security postures and operations across all their locations. This is a hard problem because security in the public cloud tends to be very different from security in the private data centers. We want to make it as simple for customers to move their security postures with them as they do moving their applications. To do that, we've added a bunch of capabilities around the full spectrum of prevention, detection, and response with a particular focus on data security, which we consider a core strength. As an example, consider ransomware protection. We can automatically detect ransomware attacks in progress, block them from succeeding by preventing writes to storage, and if they were to succeed, recover from such attacks by restoring to an immutable snapshot. We can also prevent lateral spread with our micro-segmentation technology by taking compromised workloads and isolating them from the rest of the network. Now, while we cover prevention, detection, and response, security detection is a problem which we feel we can particularly shine in because it's a data analytics and machine learning problem. It's a workload that's ideally suited for the Nutanix platform. In addition to the capabilities we're building on our own, we also have an ecosystem of partners around security, including vendors like Palo Alto Networks, Qualys, and Splunk. As with everything else we do, we stay true to our philosophy of customer choice by letting them pick the best security solutions for themselves. Turning now to our emerging products. One of the areas we're most excited about is our unified storage offering with files and objects. This represents a large market for us. We estimate it to be more than $3.5 billion, and it's been growing rapidly, almost doubling in the last 12 months as we take market share from NetApp, Isilon, and others. Customers choose our storage offerings for several reasons. First of all, we offer them the most flexibility. They can buy storage from us and carve it up as they like. They can use traditional file protocols like NFS and S3, or use object storage with full AWS S3 compatibility. We've also invested in rich data analytics. Customers can get insights on how their storage is being used, they also use these analytics to drive some pretty powerful capabilities. For example, placement optimization and cloud tiering. We can automatically detect when data is not being used very often and move it off to cheaper on-premises storage or to public cloud. For customers, this means that without any manual intervention, they can significantly bring down the cost of storage. We've already talked about ransomware protection as a key differentiator for our files and objects offerings. As a result, we are seeing increasing number of use cases with unified storage. It's part of VDI solutions, often with home directories and department shares, but we're also seeing increasing adoption in big data workloads, AI/ML workloads, and cloud-native applications. Let's take a look at a customer example. Assurant is a leading provider of insurance services. They have over 300 million consumers and provide services like mobile device lifecycle management, multifamily housing, vehicle protection services, and a lot more. There are 14,000 employees and an annual revenue of over $9 billion. Assurant was looking for a technology partner that could help them address the growing demands of the business. Economics of capital expenditure of traditional CapEx did not work for them because of the diverse business portfolio, which drives an unpredictability in demand. Nutanix's flexible consumption model allowed Assurant to start small and grow as per the needs of the business. Over the years, they've expanded their deployment on Nutanix with a scalable, cost-efficient, predictable performing, and simple-to-use cloud platform. Assurant was able to start small with select workloads and add capacity as they needed to. More recently, they've also started using more of our emerging products, specifically Prism Pro and file storage. Of course, Nutanix support was a big factor in giving assurance to Assurant, trying that three times first, that Nutanix was the right partner for them. Other area that we're very excited about is our database automation and as-a-service product, Era. Era also has a large market opportunity, over $5 billion according to our estimates, and has been one of our fastest-growing products to date. Era brings a number of unique capabilities to database management, automatically provisioning databases, patching them, providing for copy data management, and backup and restore from a time machine. So we're taking all this innovation that's happening in the public cloud and making it available for traditional enterprise customers in their private data centers. Era supports a variety of databases, both proprietary, Oracle and SQL Server, and open source, Postgres and MongoDB. In fact, we're adding end-to-end support for Postgres so that customers will have a complete database solution from Nutanix. Now, Era can run both in the private data center and in the public cloud via our Clusters offering. Going forward, though, we are investing in decoupling Era from the Nutanix cloud platform so that it can run natively against public cloud instances. For example, against AWS EC2. What this means is that customers will be able to run Era and get the same consistency of operations and policies, no matter whether their workload's running on the Nutanix cloud platform or natively in public cloud. Turning now to our cloud strategy. Last year, we introduced Clusters. Clusters takes our entire software stack and makes it available on AWS bare metal. We are also working on a port to Azure and expect to have a public preview in the second half of this year. Nutanix Cloud Clusters is unique in that it actually is deployed directly in customers' cloud accounts. This means customers can take advantage of their cloud credits and also provides for easy interoperability with their native cloud workloads. Customers have flexibility in how they license Nutanix Cloud Clusters. They can use their existing Nutanix licenses, port them to public cloud, or they can use more cloud-like metering based on consumption. We have the same software stack available on-premises and in the cloud, which means that customers can move workloads with no refactoring whatsoever. They get similar levels of performance, similar SLAs, unified management, unified operations, and in fact, the same teams with same skill sets can manage all their locations. At the same time, we have made it easy for them to take advantage of the elasticity of public cloud, so they can very easily expand Clusters, shrink them back down as needed. These two factors, the ease of lift and shift and the elasticity of public cloud, have driven our Clusters adoption over the last few months since we've gone GA. Some of our customers are going through a data center consolidation exercise. They're terminating data center leases and want to move quickly to public cloud. Clusters lets them do so without refactoring, and should they choose to do so, they can do refactoring at a later stage. Elasticity also has driven a bunch of use cases, things around cloud bursting, test and dev, and most importantly, around disaster recovery. Disaster recovery is actually an ideal use case for Clusters. Customers can start with a very small footprint in the public cloud. Just enough for replication, and only in the event of a failure when they actually need more capacity, they can quickly expand their clusters, run their workloads in the public cloud, and then shrink back down once they're failed back. There's no need now to build a second data center that's mostly lying idle, simply waiting for a disaster to happen. Clusters make it easy for customers to take their traditional applications that were born in the private data center, and move them to public cloud. There's a second half to this equation, though. Customers who started in the public cloud, who built cloud-native applications, should also be able to move them back into their on-premises data centers when they need to. These applications tend to be built on technologies like containers and Kubernetes, which makes some of this easy. Things like compute and networking can be moved back and forth relatively easy. Storage remains a problem. In fact, cloud-native applications have to use more forms of storage than traditional applications: files, blocks, objects, databases, and so on. Nutanix is unique that we have very few vendors who can actually provide support for all these data formats. Layered on this, we also provide rich services for containers around data mobility, security, data protection, and disaster recovery. In addition, with our Karbon offering, we make it easy for customers to create and provision Kubernetes clusters. They can automatically deploy them, patch them, scale them as necessary. Essentially, between Karbon and our storage services, we make it easy for IT to provide a full cloud-native platform for their customers, usually developers. For developers, on the other hand, we wanted to give them the maximum choice in terms of being able to bring their own favorite platform as a service runtime. While Karbon does have some PaaS capabilities, we also offer developers a choice to bring their favorite runtime. They can bring a Google Cloud Anthos deployment, an Azure Arc data services deployment, Red Hat OpenShift, and so on. Essentially, we want to make all of these platforms as easy to deploy on Nutanix as Karbon is. One more thing. The data services that we talked about are just as important in public cloud as they are on-premises. Things like data protection, mobility, security, and disaster recovery are just as relevant for workloads that run natively in public cloud as ones that run on-premises. Directionally, going forward, what we're doing is we're taking these services and decoupling them from the Nutanix Cloud Platform. Customers will be able to take advantage of these offerings even when they're not adopting the rest of the Nutanix Cloud Platform. Stay tuned for more on that. We covered two major areas today. The first one is our simplified product portfolio. We'll be extending our lead on our core HCI management offerings and also consolidating around fewer emerging products. We're especially excited about Era and unified storage going forward. We also covered our hybrid multi-cloud strategy with the twin pillars of Clusters and cloud-native support. Between the two of these offerings, we can enable customers to run any application in the location of their choice. Thanks for your time today. We'll take questions later, but now over to Chris. Before that, though, let's take a look at an Era video. Enterprises everywhere face a common challenge: how to manage, protect, and monetize their ever-growing data. Databases harness this data, powering your mission-critical applications that set your business apart. Every company today leverages a variety of database software from many different vendors, both on-premises and in the cloud. Siloed database operations are complex, expensive, slow, and less secure. Many of the major data breaches you read about in the news stem from database security lapses. Enter Nutanix Era, the industry's only true hybrid and multi-cloud database-as-a-service solution. Era simplifies, standardizes, and speeds up database operations across a variety of database solutions, making it really easy to manage and protect databases while you deploy them in the location of your choice. Conduct vital database operations, such as provisioning, patching, and cloning with a single click, even for thousands of databases, slashing administration tasks by 90%, freeing your staff to focus on innovation and business strategy. Built-in automation virtually eliminates unplanned downtime, which according to industry research, prevents costs of $35,000 of downtime per hour in database outages. Era lets you scale databases instantly to meet the growing demand. For example, your developers get access to resources when they need it to build new products and services quickly. Era also provides fully integrated disaster recovery across the entire database estate, ensuring zero data loss with no impact on performance. For many of our customers, this unmatched operational simplicity has led to 8 times faster time to market, all while improving database performance by 6 times. Thanks to these efficiencies, many customers have achieved over 290% return on investment, and Era has paid for itself in under six months. Hundreds of organizations today, including JetBlue and RBL Bank, are already using Nutanix Era to simplify their database operations. Data is one of the most valuable assets for any company. It fuels the enterprise, Nutanix Era provides that simple and secure hybrid and multi-cloud database operations that companies need to monetize data and make better business decisions. I'm excited to introduce you to Tilo Kunze. He's a Senior Infrastructure Architect at Optum Care. Optum Care is an ambulatory care company that gives customers access to a complete view of their health with personalized insights to improving care. Tilo ensures that Optum Care's database solutions, powered by Nutanix Era, support the remote workforce, telemedicine solutions, and the growing patient population. Yeah, hi. My name's Tilo Kunze. I'm a senior infrastructure architect for Optum Care. Optum Care is an ambulatory care company. One of the big challenges is consolidation. We've got 18-plus care delivery organizations. Databases are extremely important. Pretty much every system that houses patient information is stored on a database. We have a lot of EMR systems. Analytics, data analytics team, they've got close to 30 terabytes worth of Oracle and SQL. In IT, you have to do your due diligence. You have to look at what's available. Pure Storage, NetApp, they can do similar things, but we found that Era was just a complete package. Era allows us to do quite a few things today that we were not able to do. They needed a dev environment, as well as a report environment that would have cost about $40,000. Tier one storage is expensive. The memory compute to run it. What we ended up doing solving for that is using Nutanix Era to create clones, mount them to a test dev server, and then refresh that to give them a new environment. Basically, ended up using, most days, 800 GB of space. A really big win on cost savings as well as efficiencies. Because they were having to work on production, they were limited to four to six people developing and running reports at one time. After the change, we're able to get 18 users working simultaneously, so probably over 60% productivity increase. One of the other awesome features is deployment of SQL. Instead of a server, maybe a database server, taking several days to get out there, we'll have it in minutes. I've been working with Nutanix for almost 10 years now. It's always been a great experience compared to other vendors that I work with. I definitely give them an A. Free time due to efficiencies, unfortunately, always ends up doing the same thing. You get to do more work in the same amount of time. Now please welcome Chief Revenue Officer Chris Kaddaras. Good morning, good afternoon, and good evening. Thank you for joining me for this go-to-market session. I want to thank Rajiv and Rajiv, great presentation on the company strategy. What a great video on database management. Thank you, Monica, for that. It was a great example of how we help customers solve problems every day. Let's jump into it. I'm going to talk to you today about go-to-market. I'm going to cover five key things. The first one is sales execution. How the sales team is doing a much better job of executing from years past. We think we have a lot of headroom moving forward as well. Great job done by the team. The second part is move to ACV. How ACV, and that move to compensation on ACV, as some of you may know, we moved at the beginning of this year, has really helped us align to customers, and it helped our sales reps position what customers require and need in the marketplace. The third piece is our market opportunity, and I'm going to cover how we see more market opportunity within the HCI segment, that's hyper-converged infrastructure, as well as hybrid cloud, emerging products, and a segment specific to G2K. The fourth piece I'm going to cover is productivity and how we're going to accelerate productivity in the market, specifically around solution selling and the road to solution selling and partner leverage in the marketplace. I'm going to finish up with go-to-market and how we're driving go-to-market efficiencies by driving lower costs based upon our renewals business, as well as digital marketing and some other things within the sales organization. Let's jump in. First part, sales execution. We measure a lot of KPIs on our sales organization and how we execute to make sure that we're executing well. Some of the three most important KPIs are, one, how we do against goal. Two, linearity. That's how we book business within the quarter to show our pace and how well our pace is during the quarter. The third piece is how we actually do solution selling in the marketplace and how we attach some of our emerging products, which are differentiators in the market. I'll tell you, the sales team has done a great job this year. This year, all of our sales teams, based upon every theater, every major theater, is at 100% of goal for Q1 through Q3. This is a marked improvement from previous years, and I'm really happy with the work that the sales team has done. The other piece is linearity, the way that we measure linearity is how we book our business in the quarter. I would say world-class linearity for any sales organization is if you get above 50% of your goal by the end of month two. I'm proud to say the sales team has done a great job here. They've been at 50% of their goal Q1, Q2, and Q3 at the end of month two. This shows the pace and really the attention to detail of the sales organization. I'm really happy with the foundation we've built there. As I mentioned to you, the third piece is how well we attach some of our differentiated products. This year, we're at 39% attach rate. That's of our HCI core product, we attach an emerging product 39% of the time. This is our road to solution selling. When we do this, we position better at our customers, we solve more problems, and we win more. It's a great stat for the sales team in regards to how we're executing in the marketplace. How have we done that? I talked to you a few years ago, and I'll talk about it a little bit later in the presentation about establishing a sales leadership framework and a sales management framework in the organization. I feel that we've done a really good job here. I want to commend all of our sales leadership worldwide. We've really built up the pace of the organization, and I'm happy with that framework that's been put in place. That framework has really helped us build a pipeline culture so that we're doing a much better job of building more pipeline at a higher quality than we've ever done in the sales organization previously. Great job done by our sales team. We've also helped this with channel incentives and sales incentives to try to drive the right behavior in the marketplace. Moving on from this, I want to talk to you a little bit about ACV. Now, as I mentioned earlier, at the beginning of this year, we moved to an ACV comp plan, and this is paying our sales reps on annual contract value versus total contract value. This has been a huge win in the marketplace for us. Now, earlier in these presentations, you heard Rajiv and Rajiv talk about our key differentiator in the marketplace is choice. Choice on technology, hypervisor, hardware, and cloud. Customers can choose. Rajiv also talked about choice on subscription, where a customer's license portability can move from compute architecture to compute architecture, on-prem, off-prem, allowing the customer to make more choice about how they build their architectures in the marketplace. This has also been a huge differentiator competitively in the marketplace. One thing that we haven't talked about is choice specifically to term. Now, what I'll tell you is this has really unshackled our sales organization in the marketplace. It's allowed them to position what a customer requires in a cloud consumption model. Where customers may want one-year, two-year, or three-year terms, they can choose what they need. A sales rep is not looking to maximize TCV or total contract value. A few other things that this has done, not only provide the customer with choice, but also it provides better economics for Nutanix. A shorter-term deal is a better margin deal from a software perspective for Nutanix, and it's renewable sooner in the life cycle. So it's a win-win for our customers on choice and for our Nutanix sales teams and for Nutanix overall. A great example of this is TotalEnergies Gas & Power, the leading B2B energy supplier in the U.K., a subsidiary of TotalEnergies Group. Now, like a lot of the customers that we work with, TotalEnergies Gas & Power was looking to modernize three-tier legacy infrastructure and also simplify database management, but they did not want a multi-year CapEx spend. We were able to give TotalEnergies Gas & Power a single management platform to drive great operating efficiencies. It was also the end of a budget year for Total, they were looking for something that could address their infrastructure but do it within the current budget requirements. We were able to provide them with a one-year license duration, both for their HCI infrastructure and for their database management software to hit what Total is looking for and give them the requirements that they needed. Great win by the team, great win-win for us to be able to position ACV in the marketplace. Moving on to the market opportunity. As you've seen in Rajiv's presentation, we see a great market opportunity within HCI today, within hyperconverged infrastructure. Today, that market is around a $21 billion market going to $30 billion in the future. We see some key workloads and some key use cases driving this in the marketplace. The first one is around security. A lot of customers have initiatives around securing their environment today. Those initiatives are driving a tremendous amount of data in the environment and a lot of analytics around that data. Nutanix is a highly secure platform and scales very well for data analytics for security environments. We're seeing a lot of opportunities in the marketplace. The other area is around performance of current applications. As you know, hyperconverged infrastructure is one of the most highly performant infrastructures in the data center today. We see customers moving a lot of their high-performance data requirements to HCI, and therefore we're taking a lot more workloads in the HCI space today. The other one is around expansion of other workloads. Things like Splunk in the environment, data analytics, things like database in most customer environments. Typically, when we've entered into a customer scenario, we enter on one workload, and typically most of our accounts were in one to two workloads, I would say. There's probably four or five that we can expand to today, and the team's doing a great job of helping customers expand to those workloads. I would actually commend our engineering teams because they've actually brought HCI to a point where HCI or hyperconverged infrastructure can really run any workload in the data center. It's a great win for us and a great win for our customers. Now, building on top of this market opportunity, we see hybrid cloud infrastructure as the next big opportunity in the marketplace. We're seeing a lot of wins, and I'll go over some. You've heard some already previously from Rajiv, but I'll go over some in today's presentation. We see that there's really two use cases that are driving this in the market. The first one is around disaster recovery, where customers do not want to really build out a secondary data center for DR. They'd rather use the public cloud in some instances to do DR. With our Nutanix Cloud Clusters, we give them the ability to do this in a hybrid cloud manner. The other place is in elasticity. A lot of customers have to burst to the cloud. They may have cyclical needs based upon their data requirements, right? It could be retail that needs to burst to the cloud on a yearly basis based upon the retail cycle. It could be based upon pandemic conditions, where they want to burst to the cloud because they need more bandwidth and they need more data requirements for end-user computing, for people working from home. This is another great requirement, and we're seeing customers consume hybrid cloud offerings from Nutanix and other vendors, honestly, and this is a marketplace that we think we can win and we can continue to do well in. I would tell you the third area of market opportunity for us, I mentioned earlier, is emerging products. You can see we built on a huge market opportunity here. We think this market completes our total market opportunity by 2025 to $61 billion in the marketplace. A few of the key use cases that we see is around data. Our ability to expand beyond just managing VMs with hyperconverged and manage files and objects is strategic. It's big. We're seeing this in the market all day, specifically around files and objects, because a lot of customers are building out object instances within their environment today. The other area is around management and automation. Management, a good example here is the video that we saw before my presentation around managing databases. We're seeing a huge uptick in that product. Our product is Era, and our customers are looking for more and more database management in the marketplace, and that's resonating very well. The other area is around automation. Automation could be around private cloud. How do I automate my environment to take as much of the inefficiencies out and provide scalability within a private cloud environment, but also how do I automate private to public or hybrid multi-cloud environments? We're seeing a lot of customers engage with Nutanix on how to automate that process. We see that there's a significant market opportunity to continue to evolve for Nutanix in the market. A great example of this, and I'm going to go through three. I'll go through one example on HCI, and then I'll go through another example on hybrid cloud, and then the third example will be on emerging products. The first great customer example is with CarMax. CarMax is a longtime Nutanix customer, and there's a few workloads that CarMax looked at Nutanix for. The first one was how can they service their 220 locations that are in 41 states? As a lot of you know that are in the U.S., CarMax is the largest retailer of used autos in the U.S. and operates more than 220 locations, as I mentioned, and they were looking for an infrastructure that was easy to manage, and that could be easy to deploy within these 220 locations. We were able to deliver CarMax this remote office branch office solution. Our expansion opportunity was to look at how do we actually help CarMax in the data center. CarMax was looking for specifically an end-user compute or VDI solution that they could deploy for their end users. Nutanix was able to expand the HCI footprint within their data center to help CarMax. Great win in the market. The next example is a multi-cloud example. In this case, I'm going to use an American multinational bank that's a customer of ours. They're a financial services company that also has operations overseas. They were looking to modernize their data center to improve performance, also private cloud and public cloud leverage for elasticity in their environment. One of the key use cases they were looking for was DR. They did not want to establish a data center specifically for DR that they had to own. They decided that this was a great use case to look at Nutanix for, and what they decided to do is build a hybrid cloud with Nutanix to address their DR use case. Another great win in the marketplace. Our last example is an emerging products example, and it is for USPTO. The United States Patent and Trademark Office is a U.S. Department of Commerce agency that grants patents and registers trademarks. The USPTO CTO and CIO had a cloud-first mandate, and they had a requirement and a need to deliver end-user compute or VDI to their clients and their end users. They are also a regulated environment. We were able to provide them with a SaaS-based solution for end-user compute, our product Nutanix Frame, to help them deliver the solution in the marketplace. A great win by the team and a great customer for Nutanix. The last opportunity in regards to market expansion and market opportunity I want to talk to you about is within the G2K, our Global 2000 market segment. Now, Nutanix is lucky enough to be on the data center floor for 50% of the G2K accounts, which is a great opportunity to expand. As I mentioned to you previously, we have, one, an opportunity to expand around HCI, just from one workload to the other, whether that's VDI, database, general server virtualization, security analytics. We're doing a lot of work to make sure we can expand within those existing accounts. The other place is within hybrid cloud and multi-cloud, and a lot of these customers are looking for answers, and we are seeing a lot of pipeline build around this subject. The third place is around our emerging products. Our ability to help those customers with some of our differentiated emerging products is palpable. It's there, and our sales teams are doing a great job of going after those opportunities in the marketplace. Now, I will tell you, we've also set up for this. This is something that's relatively new in the last two or three years with Nutanix, and I'd say it has gained a lot of steam in the last year, where we've segmented our market. Within our key markets, we have enterprise sales teams focused on working with these customers to bring value and to expand within that market. I will tell you that these customers are also great customers. After they buy Nutanix the first time, 90% of the time, they come back and they want to buy again. Typically, we see about a 16 times multiple on what they bought from their initial purchase. This is a great opportunity. We've set up for this opportunity, and I think this will be a real generator for productivity moving forward for Nutanix. Let's talk about a customer here that's a great example. Markel. Markel is a holding company for insurance, reinsurance, and investment operations around the world. As I mentioned to you, they're a G2K. They entered into the Nutanix family in the typical way, which is effectively they wanted to modernize their legacy three-tier infrastructure for performance. They also, though, wanted to enable an infrastructure-as-a-service offering and to optimize their database operations. We were able to help Markel with an HCI foundational platform and also provide them automation on how they provision within their infrastructure and provide them with database management. Great expansion in a G2K account. Now, let's talk about productivity. I want to talk to you about the way that we're seeing enhancing productivity. Now, some of this is already happening, and then some of this will continue to happen. The first way is around multi-product attach. Now, I've talked to you about our emerging products, and they're highly differentiated. Our sales teams are doing a great job of attaching multi-products within accounts. When we do that, we get higher ASPs, higher deal prices. When we get higher ASPs, we also get better unit economics. That drives up sales productivity, and it drives up top line and inherently drives our cost of sale down line. This is working in the marketplace. This is a key foundational indicative point to the sales organization. When you go from a single product company to a multi-product company, you need to be able to leverage that, and our sales teams are doing a great job here. Building on this, we can build this to be a solution-oriented sales team. The next iteration of how we actually build productivity is around how we position solutions to customers. When you position solutions, you get value. For that value, you get margin, you get return. I think it's a win-win for our customers because we can organize and give them a better solution than they've gotten before, and then Nutanix gets more value with the transaction. I would tell you, the way we're going to do this is we're already starting to build reference architectures. We're building validated designs so our customers can really understand how this is going to bring value to their business, and then we're going to package it in this way. First, our sales reps can position better for our customers, our customers can understand the value, and it makes it a lot less friction in the sales campaign for our customers to consume our product. Now we see further boosting productivity by obtaining more partner leverage in the marketplace. I'll talk to you about three areas that I think we can do this. The first one is around channel leverage in the marketplace. We've built a great program in Elevate. Now, Elevate was released about a year ago, and we're getting great feedback from our partners. They're really invested in our program. It's a strong foundation that we can build on. We think that we can allow our channel partners, we know we can actually, we can really enable them to do more autonomous selling in the marketplace. How are we going to do that? One way is we're going to provide them with more pricing, more packaging, more training, and more resources to help them be successful in the marketplace. This is something that we think that our partners can do a great job in areas where we may not be. This could be a segment that we decide not to invest. It could be a geography that we decide to invest. This is an area that we just started to roll out our solution in the U.S. We'll see more of that happening starting in August worldwide as well. Now, I'll move to the right part of this slide, and I'll talk about public cloud. As you know, we've released some of our products and offerings around hybrid and multi-cloud, we've released and we've been in operations with AWS for now about nine months. We've seen great uptick in the marketplace. There's a lot of pipeline being built, and we've actually gone through some examples where customers are using that in the market today. Now, we also see that Azure is going to be released soon, as you heard from Rajiv. Azure is substantial in a lot of our accounts. We're thinking that this will add a lot of productivity to our sales teams and provide us with benefit in the marketplace. I'll talk about the third area with partner leverage, which is really in our ecosystem of partners. We've built a great ecosystem with HPE, with Lenovo, and with Dell. We've had great traditional, let's call them, OEM relationships in the marketplace. They've done a great job of bringing our solutions to customers around the world. We can continually build on this, especially with embedded solutions. An embedded solution is where these partners bring some of their expertise and actually embed that with Nutanix technology. We've had a few releases recently. The first one is with Lenovo. Lenovo's released an as-a-service product around managing desktops in the marketplace and providing customers with something, a consumption model that'll help them deploy desktops and do this in a cloud-like way. They're bringing things like client desktops that we don't have, or expertise around this environment where Nutanix may not be able to bring this. They're also bringing some of these embedded solutions to markets where we may not be resident. The other one that we just released is with HPE. HPE has released a cloud-like model with GreenLake, a consumption model where customers are looking for, and this is around database and database management. Just recently released, and we're already seeing a lot of interest from our customer base. Great solutions. We think that this will provide us more leverage and more productivity in the marketplace. Okay, let's talk about go-to-market efficiencies. As a sales organization, we're hyper-focused on growth, but at the same time, we need to be balanced on spend. About a year ago, I sat down with my sales leadership team, and we decided we really needed to come up with a plan, a more rigorous plan around spend. Nobody will ever confuse me as a chief marketing officer. We came up with a plan. We named it ABCD. Real innovative title. What this gave us was the ability to sit down and understand how do we actually look at our segments in the business, our geographies, and our functions, and let's put some value to those, and let's understand where our opportunity is. My sales leadership team did a great job of assessing their current environment and understanding where we needed to spend our resource. In some cases, we decided to not put boots on the ground in certain countries or to exit some regions or some geographies and some functions. We decided to reallocate a lot of those resources to more productive regions. In these places, we still do business. We have great partners on the ground, and we just came up with new programs for those partners to make sure we can continue to service customers in those marketplace. It sounds simple, but now it is ingrained in the DNA with how we act as a sales organization. Additionally, we see that the low cost of renewals will drive go-to-market efficiencies for us. We think we could obtain an 80% reduction in cost for renewals compared to new and upsell ACV. As you'll hear from Duston, we need to increase our sales and marketing leverage and make sure that the sales and marketing cost is at a much lower rate of total revenue for the company. By doing this, we think that renewals will significantly help us get there. We've already had a year under our belt with renewals, and the team's shown great progress towards obtaining these goals. Additionally to that, we have a goal which is industry best in class of obtaining a 90% GRR rate. As we've had a year under our belt, we've seen great progress here as well. Why are we confident on renewals execution? Number one is we built a great team. The first thing that I did over a year ago is take one of my top global sales leaders and put them in charge of our customer success renewals operations, and they've done a great job of building a great team. We spent some time, and we went out to the industry, and we hired some great talent, both in sales operations and in sales leadership. Really excited about the team that this work is doing. We've also enabled them with some great tool sets around adoption, consumption, and renewals for our customers to make sure we understand where is that customer in the life cycle. Adding on top of that, we have a 93 Net Promoter Score, as a lot of you have heard already, and this is industry best. Our next closest competitor is probably half this rate. Our customers love working with Nutanix. I think with these components in place, we'll have a great performance on renewals business. Now, let's also talk about go-to-market efficiencies with marketing. The sales teams and the marketing teams have done a great job. We've given them a tough task this year. How do you bring the total cost of marketing down, the spend down, at the same time, hit all of your pipeline goals, increase pipeline quality, right, and drive a higher conversion rate? I'm here to tell you that we've done a great job here, and I think we've built some really good muscle memory around this as an organization, and I'm excited around the work that the team is doing today and the work the team's going to do in the future here. A great example of this is our IT Unplugged initiative. This is where we go to the market and we source great talent that people want to see and they want to hear from. This is musical talent, comedic talent, and this has had a great response in the marketplace, especially during these times. A lot of people bring their family, to see that talent, whether that talent is singing or telling jokes. At the same time, we're able to bring examples of where we've helped other customers within their environment. This has been a great way that we've gone from physical to virtual and driven digital marketing and driven our pipeline goals. Now, when we met two years ago, we talked about a sales management framework around talent, coverage, and quality of sale. I'm proud to say the sales leadership team has done a great job of responding here, and I think we have a strong talent, coverage, and quality of sales strategy here. What does that mean? Talent, it's how do we hire great people? How do we train great people? How do we make sure we have the right people for our journey and our mission? We've done a great job of transforming the team in doing that. Coverage, it's how do we set up? How do we actually build our territories? How do we segment? What part of the markets actually give us the best return? We've done a great job of segmenting our market. I think we'll get great returns from that. How do we partner in the market? Then quality of sale is when we show up, how do we present our solutions? What type of tool sets do we use to make sure customers can understand the solutions and the benefits they're getting? The team's done a great job around here, so I'm really proud of the work that the team's been doing. Now, building on top of this, I think it's the right time to build our solutions go-to-market. We have a strong sales management and sales leadership framework, and we're ready to build a strong solutions go-to-market. Our top focus areas moving forward are to make sure we continue growth, optimize our renewal engine, also make sure that we can take advantage of new customer growth. The team has done a great job on new customer growth during these macro pandemic conditions. We're ready, once these conditions start to lift, which we see in certain markets they are, the team's ready to kind of accelerate that new customer growth. That's going pretty well, and I'm looking forward to that happening moving forward. How do we do all of this? By balancing top-line growth with bottom-line improvements. Let's recap to some of our key takeaways. The first one is around go-to-market execution. I feel we have the right plan at the right time with the right resources, so I'm really excited about how we can execute in the marketplace. The next piece is around move to ACV, how we're much closer aligned to our customers and our customer buying patterns, and it is a key differentiator in the marketplace. I talked about market opportunity, how I feel we have a significant market opportunity within the HCI space moving forward, as well within the hybrid and multi-cloud space, and then on top of that, with our emerging products and in the G2K space. Great opportunities around. Now I talked about making sure we could accelerate productivity in the marketplace. Two key areas that I think we can accelerate are around our channel go-to-market and how we allow them to be more autonomous in the marketplace for us, and then around our embedded products with some of our ecosystem partners in the marketplace. We've already made some significant announcements there with HPE and with Lenovo, and we see great traction in the marketplace. To finish off, our go-to-market efficiencies, how we make sure we balance top-line growth with bottom-line improvements. We're going to take a break for 10 minutes, and then we're going to move on to Duston. Thank you very much. [Presentation] Please welcome Chief Financial Officer, Duston Williams. Wow, that was a great customer story. Thanks so much for that. We're excited today to wrap up our event with the final presentation of the day, that being the finance overview. It's been well over two years, actually, since we've been in front of the investment community talking about a long-range model and the business in general. We're excited today to get to do this now after over a two-year lull. We have a presentation today that's probably a little more lengthy than you might expect in a normal finance presentation during Investor Day, but we have so much to cover. Because we do have so much to cover, there's a couple key points and themes that I want to make sure that you think about as I go through this next 35 minutes or so of presentation. One way or another, these two themes are weaved through the entire presentation. The first point is that through inception, up through effectively today, our business has been fueled by new and upsell business. There's two things that we know about new and upsell business. New and upsell business is costly to transact, and it's less predictable business. The second point to think about as we go through the presentation today is that the renewal flow is on the way. We spent the last three years building up a subscription business, hard work, three years building up a subscription business. And we've had average terms of three and three and a half years. Naturally, a lot of those renewals have not occurred yet, but we know that renewal flow is coming, and we know that renewal flow will start changing the mix of new and upsell and renewals. What do we know about renewals? What we know about renewals is exactly opposite of what we know about new and upsell, that renewals should be very efficient to transact, and they should be much more predictable. Again, as we see this mix changing from new and upsell to more renewals, naturally, that transforms the business. Today, for the first time, and we're happy to finally show this story and this transition that we've been through in a quantitative manner, what you're going to see is how these two factors that I just talked about play through the long-term business model and the impact on the long-term business model. Today, for the first time, you'll see us separating out ACV billings into new and upsell into renewals for the first time. We'll start talking about the renewals and the flow of renewals and how much of renewals that you should expect to see in what periods. We're going to talk about the retention rates of the renewals. We're going to talk about how expensive those renewals we believe are to transact. Ultimately, we're going to show you how we think renewals actually adds leverage to the S&M cost structure as we go forward, ultimately leading to what we think is a very credible and clear path to not only positive free cash flow, but again, operating profit in the near future. That's what we have in store for you today. We're excited to go through this. Let's just get right into the presentation. As Rajiv showed you, we expect compounded annual growth for ACV billings of 25% through FY 2025. We believe because of the renewal flow here, that renewals will actually carry a big burden of this growth, if you will, shifting from new and upsell. When you look at it from a compounded annual growth, renewals will actually grow through this period 50%, while new and upsell will grow at about a 15% CAGR. Second takeaway here is that naturally, as terms stop compressing and ACV continues to accelerate, the revenue growth will quickly follow. We've shown here a 20% CAGR for revenue growth through FY 2025. Probably the most important takeaway here is that the renewals will naturally transform the business model as we go forward. We know that renewals are going to add to top-line growth. We know that renewals will end up adding operating leverage and ultimately a lot more predictability. That's what we've been talking about from the renewal flow, and that's going to come over the next several years. We have also, we've been looking at the top line to make sure we've got a really good growth on the top line, but what we've also done is also focused on the bottom line. You see here, what we're projecting through FY 2023 is a compounded annual growth rate for expenses of about 7%. Then lastly, most importantly, we believe what you'll see today here is a clear and credible path to not only positive free cash flow in the second half of calendar 2022 or the first half of our fiscal 2023, but more importantly, a clear and credible path to operating profit in the near future. Strong ACV billings at 25%, cash flow turning positive in FY 2023, and operating profit positive at the second half of FY 2023 or the first half of FY 2024, somewhere in that range, and then ultimately going up and growing from there. Right now, we'll take the top line, and we'll start splitting the top line apart and talking about the different growth metrics and how we see that play out over the next several years. Again, here you can see the top-line growth at 25% through FY 2025. Really, there's three key components of growth for this ACV growth of 25%. First, it's rep productivity, and then just plain the number of reps. I really view this as the engine, and it's the engine that gets fed by a very strong portfolio of products, and that being core and emerging products. Ultimately, as I've already alluded to, the renewals will play a major part in this growth going forward. Let's look at a couple of these things here as we go through. Rep productivity. This has been a major focus of Chris and his team over the last several quarters. In Q3 of 2021, we saw a nice increase in productivity. In Q4, we expect another nice increase in productivity. That's really the main focus through FY 2023, is increasing rep productivity. You can see here today, we've got a 10% compounded annual growth rate from 2021 to 2023 for productivity. What we've done is we've kind of tapered off some of that productivity, not as much in FY 2023, there's a little bit in there. Really the main focus here on 2022 and 2023 clearly is rep productivity gains. Those gains will come from various leverages, lots of different levers here, Chris has alluded to a lot of those already. It's channel efficiency, solution selling. Clearly, the emerging products have really done a nice job for us. That will continue to help productivity, along with an enhancement of partnerships going forward. Because we're focusing on productivity, what that means is there isn't a huge requirement for the increased number of reps through FY 2023. We've got a compounded growth from 2021 to 2023 here, only about 4% or 5% increase in reps, as you'd expect, as we really work the productivity. In 2024 and 2025, really the second half of 2023 and then 2024 and 2025, we really start adding some more reps there to make sure that we keep the growth going well into the future. We think we've attained a nice balance here as far as top-line growth and obviously bottom-line leverage here. We're able to do this and grow the top line at 25% through this period and offer up a positive free cash flow in the second half of calendar 2022 and the first half of our fiscal year. We believe we've struck a reasonably nice balance from that perspective. Here again, here's the ACV billings in total. Once again, you can see the different growth rates. These are two-year compounded growth rates, 25% and 23%. Unusually, it actually increases from 2023 to 2025, and that's once again because of the renewal flow, which we'll show you here in a minute. If you look at this, it's above market in general. It's going to be heavily driven by renewals. Of course, emerging products are going to play a key role here, growing above market. Core products, we've assumed, continues to grow at market. Here, for the very first time, we're going to start now breaking out new and upsell from renewals. This is the first really time that we've started to show this detail, either historically or now. Certainly, we've never projected this level of detail out. You can see here in FY 2021, we're projecting the new and upsell business to grow about 15% in this period. We have it coming up a little bit in FY 2023. Now, of course, FY 2021 is a year that we've been impacted by COVID. New logos took a little bit of a hit, we've got a little bit of increase going from 2021 to 2023. Actually, we have it declining in 2025 because the renewals take over so much reliance of that growth that the new and the upsell isn't relied on as much. We've actually modeled a slight decline from 2023 to 2025 from a compounded growth rate from 17% to 12%. Here's the renewals. This has been a major ask from the investment community, quite honestly. Here for the first time, we're starting to show you the renewals breakout. In FY 2021, we're projecting about $160 million of renewals. It's important for this $160 million, a vast majority of that's still life-of-device renewals. It's not the true term subscription renewals. I'd say by the end of the year, I'd say of that $160, probably $110-$120 will be life-of-device support renewals. What's interesting now is what's going to happen over the next two years through FY 2023. The life-of-device renewals will start to decline naturally, the support renewals. What's going to happen is the subscription renewals will start to come into the flow. Because we've already transacted these, we're simply waiting for those renewals to occur. Really, FY 2023 timeframe is the first really serious tranche of three-year deals that come up for renewal. Then you can see the growth rate, the compounded growth rate actually going from 46%-54% here now on renewals, because now you've got more three-year, and plus you've got some first-time five-year renewals coming in. What this offers up is a 50% compounded annual growth from 2021 to 2025. The renewals are going to carry a big burden of this growth going forward. Why are we comfortable with this? I think if you look back into history, certainly with our customer retention rates on the life-of-device portion of the business have been very high over the last several years, and our Net Promoter Score of 90 over the last average of the last seven years. That gives us a pretty good comfort level. Matter of fact, the Net Promoter Score is actually higher than 90 as we speak today. This gives us reasonable comfort from what we're projecting here for the renewal flow. The interesting thing about the renewals also, which sometimes we forget about, and I talked about earlier, is that renewals will naturally add to the level of predictability of the business going forward. What this graph shows here is it's a plus one year from any point in time, plus two, plus three. We know what we've modeled in our model over a certain period of time. In a one-year period, plus one year, we know that 100% of what we're projecting for our renewals has already been transacted. We're just waiting for the renewal to come in. If you go plus two years, what you see here is 70%-80% of what we're putting in our long-term model for renewals has already been transacted, netted down for churn, and we have to go find the remaining 20% or 30%. You go plus three years. What happens at plus three years, 60%-70% of the renewals that we put in our three-year long-term plan have already been transacted as business. Again, just waiting for renewals, and we've netted it down for churn. Of course, we need to go find 30% and 40%. Naturally, these renewals are going to add a tremendous amount of predictability that we haven't been afforded, quite honestly, within our model up until now. This is our view of terms. We've been going through, as you well know, a period of term compression. FY 2019, about 4.1, was actually peaked out at, I think, about 4.3 or 4.2. This is average for the year, 4.1. What we believe, average FY 2021 will be around 3.3- 3.5. Going forward, this has been a consistent view for the most part. We see about 2.8- 3.0 years from an average term perspective as we go into FY 2023, a little bit more compression in 2022, maybe a little bit in 2023. As we go up through 2025, we believe that now stabilizes and puts us in a much more predictable environment here going forward. This is our best look at terms. We've done a pretty good job projecting how terms will play over the last year. Again, it's been pretty consistent from what we've shown in the past. As we all know, one of the short-term to mid-term negative impacts, obviously, from term compression is revenue compression and revenue growth. You can see here, revenue only grew 7%. We started our subscription transition in Q1 of 2019. Revenue only grew 7% in 2019. We don't have 2020, but it was actually 5% in 2021, and 2020 is only 6%. We've had three years effectively through this subscription transition of single-digit revenue growth as terms compress. As expected, as terms stop compressing and start to stabilize a little bit, what you're naturally going to see is increased revenue. You can see here FY 2023 at 19% and FY 2025 at 25%. Even FY 2022, we don't have on this graph here, but that's even a substantial growth from FY 2021. The interesting thing about the 25% growth in FY 2025, as you might expect, as things stabilize, everything comes into play, and you'll see revenue growth, ARR growth, ACV billings growth, all pretty much mirroring each other as we get into a more stable term environment. That was the short-term negative impact of term compression, and this is one of the positive aspects of term compression, and it's uplift in ACV per core. We've talked a lot about this. We've never shown anything from a quantitative perspective. This is the first time that we've shown something externally here. This won't be a frequent disclosure going forward, but we thought it was really important to get this out and show you what we've been talking about, how this materializes over time. On the left-hand part of the graph, this just shows you the uplift we get based on the recent history we've had from a five-year to a three-year. If we do a three-year deal as opposed to a five-year deal, we get a 40% uplift. We get another 40% uplift if we do a one-year versus a three-year deal. If you want to take it all the way from five to one, we get about 100% uplift. Naturally, it's just math to a certain degree, that as terms compress, deal economics and ACV per core naturally gets better. Now, that's one piece of the ACV per core improvement by term compression. The second piece of improvement is because of pricing and better discounting. On the right side of the graph here, you'll see two components of ACV per core uplift. You see the term compression in the orange piece of the graph there on the right, and then you see a green portion. The green portion is just from improved pricing and better discounting. Why might that be? As you recall, in Q1, it was our first quarter that we changed our sales comp from paying on TCV to now on ACV. Our thought there and our theory there was that we would now have reps not trying to maximize TCV, which usually comes with maximizing discounts also, and now they'd focus on maximizing ACV and better discounting. You can see here the amount of the 9%. We've had a 9% uplift in ACV per core from Q3 '21. The green portion of that 9% is about 40% of that 9%. We believe it's directly attributable to this change in sales comp with better discounting behavior. 9% uplift. Now, even more interesting thing, and we've talked about the power of the emerging products, but if you add the emerging products into this equation, what happens? The 9% goes to 20%. The power of those, we've always said that those are really high value-added products, and this shows you that in this graph here up to 20%. The revenue compression was a negative part early on. We've been talking about why term compression is good from an ACV per core, and hopefully today this kind of explains how we're looking at that. Quite honestly, renewals are only as interesting as the retention rate is. Here we can see that we're projecting through FY 2025, a 90% or greater retention rate. By the way, this is just the subscription business. There's no LOD in here, so it's a clean view here. Why do we feel good about the 90%? I will tell you, we haven't had an enormous amount of true subscription renewals for FY 2021, but from Q1 to Q3, year-to-date, FY 2021, we've had about $30 million of true subscription renewals come available to renew. I will tell you, with that $30 million of available to renew sample size, we're clearly above this 90%. We're not assuming anything greater than what we've first established here in FY 2021. If you look at how well we're doing on upsell business and how well we're retaining customers, obviously it turns into a net dollar retention rate. Here we've separated out for all business, including LOD, and then just again, the subscription business. You can see, we estimate we'll end FY 2021 all in with life of device expansion, or I'm sorry, retention rate here of about 125%. This comes down. We show it coming down in FY 2023 and FY 2025 to about 115%. We've talked about the complexities with LOD, and as you may recall, from an LOD perspective, we're forced to assign a term to the license, although the license really lasts for the life of the device or the life of the server. Many times a customer may run that server for six years or quite honestly seven years, but we have to assume in this calculation that it's at a five-year period. there's clearly some mismatches there that distorts this calculation a bit. that's why we like to look at just the subscription piece, which is on the right, which excludes LOD. you can see here now in FY 2021, I'm sorry, it's building up a little bit of a base, so that's why it's higher there, but then it comes down 2023 to I think what we think is a very attractive rate in 2023 of estimated 125% and then 120% in FY 2025. If you take how well you're doing on new logos and how well you're doing on upsell and how well you're doing retaining customers, it all adds up and equals a book of business. Historically, we've been talking about our book of business in terms of run rate ACV. We established the run rate ACV, as you may recall, before we had a lot of the subscription transactions happening. This was our best way to really depict our book of business, as you might recall. Again, just like the expansion and the retention rate, this has its complexities also because, again, we must assume a five-year term on the license, and we've seen a lot of times that the customer will just run six or seven years. You have a formulaic runoff of churn, but the renewal opportunity hasn't happened yet. It makes it a somewhat complex transaction or methodology. If you take out some of that messiness from the run rate ACV, and that's this here, this is just the run rate ACV portion for LOD. This includes, by the way, LOD licenses and LOD support. It's everything associated with LOD. You can see here, as you might expect, the LOD run rate from an ACV perspective falls off rapidly because we don't sell much LOD anymore. This is the portion of the run rate ACV that's life of device run rate. What happens when you take that out? What do you end up with? You end up naturally with ARR because you're taking out all the complexity, all the messiness, and now you're coming up with a metric that's very recognizable. Everybody understands it. Everybody understands the definition. It's clear, it's clean. A term is a term. Churn is churn. There's no complexity whatsoever here. That's why we now favor looking at it from an ARR, not only internally, but clearly from an external perspective to clarify things and reduce complexity from our business model perspective. What you'll see here over the next couple quarters, we'll still disclose the run rate ACV for a few quarters, but what you will see is us now quickly moving just to looking at it from an ARR perspective. We just think it's cleaner. We think it's much more understandable from an external metric perspective. We've talked a lot about top line, a lot about new and upsell and renewals, retention rates and expansion rates and book of business. We'll spend a few minutes here before we wrap up talking about the cost side, the all-important cost side of the equation. Again, here, once again, free cash flow, operating profit, same slide we've shown you before. Again, three real levers here. Lower cost of renewals. Not only the lower cost of renewals, but more growth. The renewals will continue to grow here. Just plain sales and marketing efficiency. We've done a lot of work on productivity, a lot of work on demand gen efficiency. Those things will continue, obviously, in the background here, driving both these metrics to positive. We've talked also in the past about our thoughts on what a renewal costs to transact. Here today, we break out what we've included in our long-range model here. There's ranges here because of the extended timeframes back and forth. You can see what we're saying is for new and upsell, it's going to cost about $0.60-$0.80 of sales and marketing dollar per each $1 of new and upsell business that we transact. Now, if you take that and you go to just the renewals, what happens here is that what we've modeled in, and this is where we're running today, in this range of 10%-20%. Again, $0.10-$0.20. $0.10-$0.20 of sales and marketing per $1 of renewal business that we transact. Here's the 80%, which you'll probably recognize that we've been talking about. It should be in the ballpark of about an 80% reduction, and that's what we show here today. Naturally, as the renewal mix goes up and the new and upsell mix goes down, it leads to sales and marketing leverage. Here's a depiction of what we have in the model for sales and marketing. You see it was very high in FY 2020, obviously too high. It's come down a little bit in FY 2021. COVID's helped a little bit obviously with travel, we've done a lot of work, Chris and team, and Ben and team have done a lot of work in the background here from an efficiency perspective. You saw we just a few weeks ago reduced our headcount in sales and marketing by 150 or so. That work's been going on, that's really been driving those efficiencies there. When you get to FY 2023, you see a very big decrease, and then more decreases as you go forward. You say, well, why such a big decrease from FY 2021 to FY 2025? You just have to look at the renewal line, quite honestly. If you back up to our FY 2021, today, FY 2021, only 13% of our business will be renewal business. Again, renewal business that is low cost and very predictable, only 13%. 87% of our business is that high cost, less predictable business. If we go all the way over to the right of this graph, what we have in here is at scale SaaS companies. We believe, when you're at scale, they have about a 70%. 70% of their billings are renewal-related, as opposed to our 13%. If you agree with that renewals are 80% more efficient than new and upsell business, there is no way that we can compete at an S&M structure of 35% when we're only at 13%. The math just doesn't work, simply doesn't work. The good news is that we know the renewal flow is coming, and here is our renewal flow as a% of total billings over the next several years. It goes from 13% to 25% to 40%. Ultimately, over an extended period of time, it will get right up to 70%, just like any other subscription company at maturity. Why aren't we there today? Well, clearly, we started our subscription transition at over $1 billion in revenue, well over $1 billion. Most subscription companies, quite honestly, start day one. Of course, they've had that compounding of renewal for years now, and we know the renewal flow is coming. We do an average of three to three and a half year terms, naturally, it's going to take time for those renewals, but they're already stacking up. We see it coming. Ultimately, we will get our S&M cost structure down to a competitive level in what we're showing here, 35%-38%. You step back. That was the S&M cost structure. Let's look at the total expenses. I've mentioned the 7% growth from 2021 to 2023. From 2020 to 2021, we're actually going to decrease expenses. Again, COVID's helped here clearly with travel and a few things like that. Only about a 7% compounded growth from 2021 to 2023. Mostly non-sales and marketing as we continue to work on efficiencies within the sales and marketing team. As we go out to 2025, we don't have it here, but we start adding reps in 2024 and 2025, that brings the expenses up a bit, and that probably will then start to increase basically in line with any company that's growing at a top line of 25% or so. That's it from a total expense perspective. I covered a lot of information. We talked a lot about our subscription transition. We thought that this graph here really is the best depiction of the subscription transition before, during, and what we think happens after. What we have here is really three pieces, and one of it is the first piece, which is before the subscription transition occurred in FY 2019. That was an environment of stable terms because there wasn't any reason for term compression. What happened in FY 2018? We had revenue growth of 37%. We actually had positive cash flow of 3%. We had operating margins that were getting better and better, and this is at a negative 8%, and our rule of 40 was 40%. Even in this period, by the way, we were still eliminating non-profitable hardware business from our business model. The revenue growth is actually higher if you just look at it on a TCV basis, and the rule of 40 would've been about 50%. That's it pre-subscription transition. We get into the last three years of messiness. Purposefully declining terms, thoughtfully declining terms based on our business model. This is the derivative of going through a subscription transition. You can see the impact on revenue here growth, about 7% in FY 2019, 6% in FY 2020, and it'll probably grow about 5% in FY 2021. Naturally, what happens there is you start using more cash. That gets worse. You start losing more money. The Rule of 40 doesn't even make sense to put on the table now with the compression in revenues. The final phase, which we're just about to, we believe, get into now over the next several years, is the post-subscription transition phase, and that's a phase of stable terms and a lot of renewals flowing into the business. What happens naturally? Revenue starts to increase substantially. Cash flow comes, turns positive, operating profit neutralizes, and then ultimately turns positive. Now, once again, the Rule of 40 makes sense to put back on the table because we're in a stable environment. Why wouldn't you talk about Rule of 40? Here in FY 2023, we've got 20%-30% estimate, and then in FY 2025 at about 35%-40%. We thought that was probably the best way to summarize everything that we've been through before the subscription transition, during, and again, this during subscription transition phase is, in my mind, it's the investment phase because it's been really all investment. We haven't had much return on that investment yet. The orange, the post phase, that's the return. We've always said we believe the investment in this subscription transit has a very high return, and this is how we've modeled it and what we believe will happen over the next several years. I'll summarize again, just some summary target operating model numbers. These are all numbers we've basically just showed you. Again, ARR, ACV billings, and revenue growth, how that transitions and flows over the next several years. Now, the interesting thing here, if you look at the FY 2025 numbers for growth, what I mentioned previously, is that ultimately, again, when things stabilize, there's no reason why these growth numbers won't come within a reasonable range of each other. Just naturally, again, should occur, and then all these things should basically mirror the same growth rate. Of course, you've got OPEX coming down and operating margin going up and positive free cash flow. There's a lot to unpack in a relatively short period of time. Again, good revenue, good ACV billings growth, 25%. The burden of growth is now going to shift from just new and upsell historically. Now it's going to be shared by renewals, which again, will come at a very low cost and more predictable. Revenue will start to accelerate and get it to a 20% CAGR growth. We've talked about what renewals will naturally transform the business. The important thing here is we don't have to do anything massively different to the business model now. That hard work has been done. These renewals will start flowing. There's a lot of back-office work to make sure the retention rates are high for renewals and the cost structure's right. The model itself has largely been done from that perspective. We're focusing on expenses, of course, and clearly, we think we've laid out a clear and incredible path not only to positive free cash flow but also, obviously, operating profit. Just before we leave, a couple of thoughts here. In the appendix, there's a couple of important slides. One is helping you with your FY 2022 modeling. We want to make sure you have that right. There's a slide in there on that. There's also a slide in there on disclosures. We have a lot of new disclosures in here. You shouldn't expect them all the time or maybe not at all going forward. What we thought, we'd set the expectations up front here, what will get disclosed, what won't get disclosed, when it gets disclosed, and how often it gets disclosed. That's in there for you to review. There's a couple interesting TCV-based metrics on mix of business and source of growth. You might want to take a look at that for your modeling courses, the GAAP, non-GAAP reconciliations. I think this is really important too. We put definitions. Every term that you have in the presentation here, we've attached a definition to it. There's the metrics there, the definition, and why it matters. I think it's important that you also reference that. There's roughly four pages or so. That's what we have for you today. There's a lot of information. Thanks for paying attention. We're excited about the future. We've been talking about this so much. It's nice now to shift the qualitative story to a quantitative story also, and for the first time to be able to share some of these important metrics with you. We're very excited. Now I'm going to hand it off to Tonya to kick off our live Q&A session. Thank you. Thanks, Duston. Great presentation. I'd also like to welcome Tarkan Maner, who's our Chief Commercial Officer, to the panel. Welcome, Tarkan. All right, we're going to get ready for our next session. There's 35 minutes approximately. If you'd like to ask a question, you can hit the Ask button in the lower right-hand of your screen. Our first question comes from Ben Bollin from Cleveland Research. Ben's question is, can you discuss what the sales cycle was like for Estes and the bulge bracket financial? How long was the process? When did it start? Where are you in the rollout, and how did COVID influence the process? Chris, I'll give that one to you. Great. Thank you, Tonya. Thank you for the question, Ben. I appreciate it. Actually, very different timelines to both of these wins. The large tier 1 financial or bulge bracket bank took about three years. These accounts typically take a while to work through their process. They're actually taking part in a large transformation, this purchase was recent. It was this year. They're in the middle of the beginning stages of their rollout as we speak now. On Estes, this followed our classical sales cycle, which is around nine months, I'd say, for the most part. Six to nine months is typically what a sales cycle is for most of our customers. Estes also is a relatively new customer for this particular hybrid cloud solution set, and they are also at the beginning of their cycle, and they're deploying it as we speak now. Two great wins following a little different path, different size accounts. For the most part, things are going well there, and the sales cycles moved pretty quickly for the most part for that sector, and we see the solutions working really well. Great. Thank you, Chris. Our next question comes from Pinjalim Bora from JPMorgan. Go ahead, Pinjalim Hey, everyone. Great presentation. Great to see some of these numbers finally come through. I have two-part questions. One for Rajiv. Rajiv, do you think that over time we'll see Nutanix create a multi-cloud orchestration layer, abstracting not only from private to public but between public cloud? Is that a pipe dream or is that coming? Second part to Duston, the contract duration stabilization is great to see, but just to play devil's advocate, could it take it further down if emerging products accelerate beyond your expectation? I mean, is there a possibility that it actually fluctuates in that fiscal 2023 to fiscal 2025? Thank you. All right, great. There are two Rajivs, I'll take this first one. Pinjalim, in terms of your question on multi-cloud orchestration, our goal is to develop and get this Cloud Platform that we talked about working across every cloud. As you know, we're in AWS, and we have Azure coming soon. Once we have that, if you're running on that Nutanix Cloud Platform, and as long as you're not using a whole set of cloud-specific services, we will be able to migrate workloads from one cloud to the other, provided they're running on this platform. Now, of course, the story gets complicated if you look at using all these native cloud services, then it becomes a lot more nuanced. In general, subject to some constraints if the app is developed properly, then we can migrate. Duston, on the terms. Yeah, sure. Relative to the terms, which we've pegged at, as you saw, 2.8 to roughly three years. I think, Pinjalim, your question is on the emerging products, could that actually potentially compress that a little bit more with more traction in emerging products? I think a couple things there. I think we've taken a pretty good shot at what we think the emerging products growth will be in that number also. I think also potentially as the emerging products become a little bit more mainstream, we may see some of those terms actually lengthen a little bit because at some point early on in these products, customers will try the product out, and they're probably more comfortable with one year. Again, as they get a little bit more mature, we may see that philosophy maybe moving to some more three-year deals as, again, they become mainstream. The 2.8-3.0, we feel pretty good about, and we've had pretty good success projecting the renewal stream over the last several quarters. We think that's a pretty reasonable rate, especially within the infrastructure environment itself, that plays out to some of the average terms that you see. Great. Thank you, Duston. Our next question comes from Rod Hall from Goldman Sachs. Rod's question is, how do you see your hybrid cloud offering versus competitors like VMware and Red Hat? Could you also comment on your view of hybrid cloud providers moving on-prem like Outposts? Rajiv, you want to take a shot at that? Okay, sure. Happy to do that. If you look at our hybrid cloud platform, it's also, again, based on the same simplicity that we have with our on-prem offering. It's 1 license. The customer can choose to deploy the license wherever they want to. Second, it operates in the customer's native public cloud account rather than having to go with a separate account, and allows them to natively use all their cloud services. Again, it's just the simplicity and the ease of use as to how this all works is a key differentiator for our customers in terms of using our hybrid cloud. With respect to the native public cloud providers having their own hybrid strategies, yes, indeed, you've seen Outposts from AWS, et cetera, right? I think those public cloud providers are largely focused on operating in their cloud as well as on-prem. There are two differentiators for us there. One, we are delivering a cloud platform that operates across every cloud, right, and allows our customers to go multi-cloud. The second is the cloud providers are coming cloud in, right? They're coming from the public cloud on-prem. The apps they've run on the public cloud are largely net new apps. If you want to run your existing apps, say, in a hybrid mode, those apps likely have to be re-platformed or refactored. In our case, we run both existing apps as well as new cloud-native apps assets. Great. Thank you, Rajiv. Our next question comes from Wamsi Mohan from Bank of America Securities. Go ahead, Wamsi. Yes. Thanks, everyone, and appreciate all the details you shared today. That's super helpful. I had a question for Rajiv Mirani. I'll clarify. Rajiv, you mentioned taking share from Isilon and NetApp. Can you talk about what the key factors there were? Were these greenfield opportunities, or are you actually penetrating their install base? Thank you. Yeah, if you look at our unified storage offering, essentially, there's two parts to market it. They want it as an attach to our HCI business, so this often happens with use cases like VDI, going into one VDI deal when people want home directories and department shares. They'll buy some unified storage with the HCI offering. Increasingly, we are just seeing standalone sales for unified storage. Essentially, these are customers who are just looking for storage. They're not looking for running their applications necessarily on us, and we have some multi-petabyte accounts like that today. The reasons for that we covered in some of the prepared remarks. The simplicity of scaling and buying what you need today and then expanding as you need is a big factor in it. Being able to carve up your storage into different ways using either files or objects protocols on the same hardware, that's a big part of it. The data analytics really that we have today is driving a lot of it, and using that today to do more optimal placement of where storage should be, being able to tier things into cheaper storage, just overall driving down total cost of ownership plays a big part in winning against some of the competition there. I'd like to add to that, if that's okay. To answer your question as well is I would say that most of the opportunities are displacement opportunities. They're not particularly greenfield. A lot of customers have well-established environments, what we call classic three-tier environments around file systems. We do see a tremendous amount of displacement of competitive, I'll just say that. I haven't talked specifically about competitors here today, but that's typically what we're seeing because of the simplicity of what we provide for an architecture. That's really where we see the market going today. Thanks, Chris. Our next question comes from Erik Suppiger of JMP Securities, his question is: What efficiencies can you achieve across R&D? Rajiv, do you want to take that one first? Yeah. Essentially, by combining all our different products into unified offerings, as we talked about. We bring a lot of teams together. There are several things that we're overlapping between teams, and there's different ways to do, for example, cloud governance and automation and so on. By combining all of that together, we're building around common platforms, common APIs, common user experience, and that really has helped us focus more on customer problems and customer solutions than on individual products. That's really also where the efficiency comes from. If I may add to that, just one point to make. Those efficiencies are not just across R&D, but they cut across into the GTM as well, right? Now your GTM can be much more focused, aligned to a few specific sales plays, rather than trying to be focused on selling every individual product in the portfolio separately. Good point, Rajiv. Our next question comes from Jim Fish from Piper Sandler. Go ahead, Jim. Hey, guys. Thanks for the day and insights. Nice to see the numbers as well. A two-part question. 7% OPEX growth, but your sales and marketing chart there left sales and marketing relatively flat in order to get to that target as well. First, you referenced packaging changes and talking about bundles. Any early indications of what those bundles could actually look like and how that changes the economics for Nutanix in terms of the model? Secondly, how are you guys thinking about the impact of renewals versus fixed costs for the sales and marketing overall in terms of that leverage, and why does it look like R&D, going off of Erik's question, actually goes up pretty significantly in that FY 2025 timeframe, or are we just leaving a little bit of wiggle room there? All right, Rajiv, would you like to start? Let me start. First of all, as we bring the products together, you are going to drive overall upsell. We haven't quantified that, but it is built into the model that we shared already, right? We will be getting through that and releasing that in phases, right? These new products and bundles are going to come together over the next year, right? We'll be bringing them into the market then. I'll also answer the last part of the question, and then Duston can answer the middle, which is really, look, we intend to continue innovating in R&D. That's such a core part of what we do, and we need to continue innovating. We will continue to modestly grow R&D over the next few years, and then we are leaving some room up in future, right? If things go well, we have the ability to expand into additional adjacent markets. We've left some room here for us to be able to go do more in R&D down the road. For now, we are very focused on R&D, on bringing the portfolio together, continue to drive innovation, as we've talked about already, and scaling the products that we have today in the market. Jim, I think maybe it's a good time to talk about the expenses in general, just as we go forward here. I really look at it in two separate buckets now through 2023 or the first half of 2023 and then after 2023. As you noted, in this timeframe, what we've said here is that the expenses through 2023 will grow at a compound of 7%. Most of that is in R&D, as you highlighted also there. On the S&M piece, it's been several quarters now that Chris does not want any more sales reps. He's happy with the targeted amount that we're going to end the year at for FY 2021. He wants to now focus on what he's been doing over the last several quarters on the efficiency part of the equation. There's no big desire to add more reps. We've said we're shooting for a 10% compounded productivity increase through FY 2023. We've had a pretty good track record so far. Q3 was good. Q4 should be very good on productivity. That's that piece. As we get into the second half of FY 2023, we back off a little bit of that productivity gains, then we start adding some more heads, some more sales reps as we focus on that growth from 2024 to 2025 in the future there. When you look at it then from really the second half of 2023, really 2023 to 2025, what you see there is a much bigger overall compounded annual growth rate for expenses. Then, if you do the math, it's probably high teens on an annual basis for 2024 and 2025, R&D growing reasonably well there to fund new efforts. Again, focusing on the top line going forward, bottom line too, but adding those sales reps to continue the growth into the future. If I may add to that, Duston, one point to add to that is just factored into the OPEX is the fact that, again, we can prosecute the renewal stream that's coming at a lower cost point, right. We don't need to add as many sales reps to go prosecute renewals. We can get a lot of scale with that. Great. This next question is for Duston as well. It comes from Nehal Chokshi from Northland Capital. His question is: What gives you confidence to guide new ACV CAGR at 15%, and what has that been growing over the past few years? The 15% what you saw there, we had roughly will grow 15% in FY 2021. We've pegged it at 17% in FY 2023. Now, again, FY 2020 and FY 2021 was some COVID impact. New logos got impacted there. We show a slight increase, then we back off in FY 2025 down to 12% growth, still grow the total top line because of the renewal flow at 29% for that period. Again, if you back up a couple of years, FY 2020 was probably in that 14% range or so there, that was some COVID year there also. I think 2019, it was quite a bit higher than that. A pretty good track record there. Again, the two pieces to that new ACV growth is both core and emerging products. Emerging products will also do a fair amount of heavy lifting for that 15% growth rate when you look at the combination between core and emerging products. All right, our next question comes from Aaron Rakers from Wells Fargo. Aaron, go ahead. Yeah, thanks for taking questions, and great amount of detail today on the presentations. I really appreciate it. I guess two quick questions from me. I wanted to learn or hear a little bit more about the relationship with Hewlett Packard Enterprise. How meaningful has that become to the business, and how do we think about the progression of that relationship going forward, especially as you kind of consolidate to a deeper platform story? How much more deep can that go? On the heels of that question, just around the idea of convergence of a platform story, how do we think about the timeline of that evolving through the product portfolio? Thank you very much. Great. Tarkan, do you want to take that? Sure. Aaron, great questions. Good to see you. Look, HPE partnership is going really well for us. It's a new partnership. We just made an announcement with them just recently over the past couple of weeks around the HPE GreenLake delivery model, consumption model with our database-as-a-service portfolio. We're going to move other technologies onto GreenLake as well. There's not just GreenLake. Overall, the HPE partnership, despite the fact it's new, is going really well. I'll give you also a little context. HPE is not the only partner, as you know. We just made an announcement with Lenovo in the last couple of months around the end-to-end end- user computing as-a-service, with Lenovo systems in the back end and front end using TruScale as a consumption model, being partnered with Citrix and a few other UI vendors to deliver an end-to-end story. That's another nice constellation partnership ecosystem announcement. As Rajiv and Chris talked about earlier, cloud partners, hyperscaler partners like AWS relationship, Azure partnership, we haven't talked about much, but also with GCP, with Google, we deliver on a Desktop-as-a-Service solution. This is an ecosystem. It takes a village. It's not one single partner. It's multidimensional. As you know, cloud is not a destination, it's an operating model. That operating model basically requires simplicity, choice, flexibility, and that's why we need to have a multidimensional partner ecosystem. There's also tons of work. We made official announcements with Wipro, with HCL to deliver some of these solutions as-a-service, as a consumption model. Lastly, on the cloud front, again, three eyes instead of HPE and other platform partners. The latest CSP, Cloud Service Provider Partner program, gives us also a lot of leverage regionally, not only in the U.S., but in Japan with NTT, with Cyxtera in U.S., with OVHcloud in France and other locations. We are super psyched about the overall platform story with our multi-cloud strategy and the partner ecosystem around that. Also with end user compute partners like Citrix, in security space with Palo Alto Networks, with ServiceNow, with Splunk. We have a lot of these ecosystem partners coming all together and deliver that value and scale for our customers. As Rajiv talked about earlier, some of the leverage we're getting is through our channel partners. In addition to overall channel ecosystem with two-tier distribution with our resellers as well as with our distributors that Chris talked about with this Elevate program around. We have a phenomenal talented team with Christian Alvarez, with Sachin Chheda, Prasad Athawale, amazing team executing these things against the plan that we put forward. On the product portfolio rollout, I'll just say that we expect to be doing this in phases starting early in fiscal 2022. Great. Our next question comes from Julia Carl from Shelter Haven Capital. Julia's question is on rep productivity. When I look at the increase in productivity from fiscal 2021 to 2023, how much of that increase is coming from reps ramping versus how much is from added efficiencies from the channel solutions and partnerships? Duston, you want to take that? Yeah. Chime in here too. Yeah. The fact is, without us adding many more reps for the next 12- 18 months here, the ramped% won't really increase all that much. A majority of what you see there is some of the things that Chris talked about specifically around channel leverage and channel economy and partnerships and emerging products and things like that. That's what's really going to drive that productivity as we look to the next few years. Yeah, I'd say just adding to that, effectively, that I think that we've done a good job this year of driving productivity gains. We've built that muscle memory. Yes, it would be good to get a benefit from additional ramping reps into the model, and as Duston said, we're not going to be adding a tremendous amount of reps in the near term. Our teams have built that memory, and I think that we'll see a lot of productivity from the work that I mentioned to you earlier in the presentation. Great. Thanks, guys. Our next question comes from Jack Andrews from Needham & Company. Jack's question is, how should we be thinking about how your product strategy changes over time to address the hybrid cloud problem? Given that you have a large portion of HCI and SaaS capabilities already, are there any other areas of investment that are important to make regarding facilitating workloads between on-premise, private cloud, and public cloud? Yeah. Look, I think we have a very good solution today for taking traditional applications from private cloud to public cloud. These are applications that were born in traditional data center, and with our clusters offering, we make it really simple to move them to public cloud. We started work on the reverse on, as we talked about, the cloud-native applications that were born in the public cloud, using containers, using Kubernetes, really a good platform for that. I think it's an area of investment for us. Security, as we talked about, is the area of investment as well because of that, as we said, the hybrid cloud world, that is something that is a cause of great concern to many customers today. Maintaining the security profile as they move workloads from private to public and back. Finally, I think there's more work to be done on pure public cloud. That's a very sort of an active area of investment going forward as well. Can I add maybe one more point? Doing all this in an agnostic way, hardware agnostic, hypervisor agnostic, app agnostic, database agnostic, and also including supporting some of the open-source technologies which customers are caring about. That's a key differentiator. Absolutely. Thanks, Tarkan. Thanks, Rajiv. Our next question comes from Wamsi Mohan from BofA Securities. Wamsi, go ahead. Yeah. Thanks for taking my follow-up. Duston, I was wondering for the 45% ACV growth or maybe even if you look at it in the ARR terms, can you talk about the seasonality in the business, especially as renewals start to ramp, how we should think about seasonality, both at revenue line and outlook. Thank you. At this point, and if you're just talking FY 2022, Wamsi, there shouldn't be a whole lot of change, I wouldn't suspect, within our quarterly, if you will, seasonality. We've always typically Q1 and Q3 are usually a bit weaker. Q2 and Q4 are stronger because again, there's several factors there, commissions, we have six-month commission plans, so two and four time out in those six-month pieces. Q1, although we have federal business in Q1, EMEA gets a little weak in Q1. I would suspect in 2022, not much change there because again, there's not a huge increase in the renewal stream in 2022. 2023, yes, and beyond, and then maybe you start changing some of those dynamics because of the renewals flow and the consistency of those renewals. In 2022, at this point, we wouldn't expect much change in that past pattern. Thanks, Duston. Our next question comes from Rod Hall from Goldman Sachs. Chris, this one's for you. Will you focus primarily on large enterprises or SMB or both? How will you compete against your larger competitors offering bundled solutions with significant discounting? Yeah, good question, Rod. Thank you very much. We're going to continue to work the whole body. We have a go-to-market that's evolving and maturing. We've done a really good job within the mid-market space or the commercial space as well as the enterprise space, and we have a lot of room to grow there. We'll figure out where we're going to put our resources based upon the return that we'll get. We have a plan to go after the SMB space. We're going to do that hopefully in a relatively low-cost way. That's our plan. There's a lot of partners that want to do business with us there and a lot of distributors that want to enable us there. We're going to place our more expensive resources on the more productive areas. Whether that's a geography or a segment. We do have a plan to work the whole body, but to make sure that we put our resources in the right place. The second part of your question, which was just around, if I remember correctly, it was around how are we going to compete with our packages. I think the good news is our engineering team has done such a great job of building a differentiated solution that in the field, we've had to, in the near term, do some of our own packaging and positioning to make sure that we could be competitive. We're going to get something that's pre-built for us. It's a lot easier for us to position with customers. We can sell in a solution-oriented way and actually build reference architectures around that. When you build a package that is substantiated by a reference architecture, validated designs that customers can really understand how to roll this out to take risk out of their environment, you get value for that. It's not just a package, it's actually a solution. We see that when we change the way we go to market here, which is happening at real-time, that we will be highly competitive in the marketplace with our solution offering. Can I add to that a little bit there, Chris? On the very large customers look, our approach here as we get into them is to insert with one use case at a time. We get in on a single use case. We talked about this bulge bracket bank as an example. Our first win there was with virtual desktops enabling remote users. Now that we are in there's a whole set of other opportunities that open up. Again, one workload at a time. We go in there and say, okay, now you can use the same platform for your mission-critical workloads. We build one workload at a time or one use case at a time with these larger accounts and grow over time within those accounts. One quick add-on to this to reduce points. Chris, you talked about this in your presentation, big tier one bank. From a sales motion perspective, this is critical. Multiple systems integrators, they all bid Nutanix, not one more than three. Atos won at the end and a great partner to us. Multiple hardware vendors work with Nutanix and bid with Nutanix, at the end of the day, we worked with HPE as a key partner. Citrix is our partner there. It's a village. It's a complete solution sell with partners. In some cases, we also sometimes work with our competitors because our competitors also in play in the topology, and we support their hypervisor, work with them as well on some of the accounts to support all these workloads. The key definition of a global solution play. Thanks, Tarkan. Our next question comes from Nehal Chokshi. This is his second question. How does the 90% GRR disaggregate between customer retention and down sell? This is for you, Duston. Okay. That's a subscription-based, to term- based metric there, Nehal. We've only had, as I say, we'll have about 30, 40+ million, maybe a little bit more, of those renewals in FY 2021. We don't have a massive sample size, but I will say, to date, there's what we've seen, very little down sell, if any, to those amounts there. Don't forget, if a customer was, for some reason, offloading a workload or application, whatever, these licenses are also portable. If there's another piece of their business that they're focusing on instead of the one that was the original use case, those licenses are portable to move over to their next application or workload there. So far anyway, we haven't experienced any real down sell in that number. Thanks, Duston. Our next question comes from Matt Hedberg from RBC. Matt, go ahead. Thanks, Tonya. This has been great. I guess this question could be for really almost anybody up on stage, in a post-COVID world, could you talk a little bit more about the urgency that CIOs are talking about migrating to, certainly public cloud, but hybrid cloud. I guess secondarily, from early stages, you had a lot of VDI support. Can you talk about what VDI is% of your overall workload that your customers? Do you have any sense for just the rough magnitude of what VDI represents? Then I have a quick follow-up for Duston. Okay. Well, Rajiv, do you want to take the first hit? Sure thing. VDI is somewhere between 20%-25% of our overall workloads. We moved well past VDI at this point. That was the initial workload. Today, we're capturing all workloads in the enterprise. Anything that can be virtualized on an x86 can be run on an HCI platform, largely. That's where we are. Now, in terms of your question around post-pandemic CIO priorities, I think, look, the hybrid cloud is a journey for most of our customers, and there are different stages in the journey. Most of our customers today are starting to, of course, look at multiple public clouds. They're looking at specific use cases for where they can use the public cloud. It's not broad-based. It's got very specific cases. What we're seeing clearly is they're seeing where it actually can give them good benefits, like the data center consolidation when they have to get out of a data center. That's a trigger event for them. Disaster recovery, where they could actually cost efficiently run disaster recovery in the public cloud. That's actually better than them having another data center and keeping capacity idle all the time. Where these use cases are delivering clear TCOs, we see our customers journey to the hybrid cloud. At the same time, we're also starting to see interest in edge deployments. People are starting to look at these newer applications, deploying them in these edge locations. That's pushing more workloads on-prem. As we outlined earlier, I think the world is going to be this hybrid world, and there's going to be new applications deployed both on-prem as well as in the public cloud. All right, back to Matt for the second part of your question. Yeah, thanks. Just Duston, I think we all really appreciate your commentary on cash flow scaling here. Sometimes you reference back between cash flow and free cash flow. I'm just wondering if maybe you could be a little bit more clear on what your CapEx assumptions are when we think about the model through fiscal 2025. Yeah. What we've put in the model is roughly 4%-5% of revenue for CapEx. It's been hovering around there lately. Previous was a little higher. What we've assumed for the next several years is that 4%-5% of revenue. Okay. Thank you, Duston. Our next question comes from Jack Andrews from Needham & Company. Jack's question is, can you talk about some of the advantages you have versus your cloud native competitors who are taking workloads on-premise through various partnerships? What are some of the advantages you have in tackling hybrid versus the hyperscalers, giving your on-premise head start? Rajiv, you want to start? Rajiv Mirani? Yeah. Look, as I think Rajiv also talked about a little bit earlier, the big difference between us and the hyperscalers is that we start with applications that run in the private data center. We know how to run those well, and we can move those to public cloud without refactoring, without having to rewrite anything. That gives us a big legs up in just being able to onboard existing applications into a hybrid framework. For the public cloud vendors, they're all moving into the hybrid cloud world, but they still require you to refactor your applications before you can truly operate in a hybrid world. The second part, of course, is that all the hyperscalers, while they're coming on-premise, they're focused on a single cloud. They're focused on a hybrid model between their cloud and on-premises, while we truly operate in a multi-cloud world. Essentially, you will have the choice of which public cloud you want to use in addition to your private clouds. Great. Thank you. Our next question comes from Pinjalim Bora from JPMorgan. Nutanix is primarily known as an infrastructure player, but some of your newer capabilities around adjacent areas like Calm, Karbon, Era, and Files align more with the DevOps world. At this point, how mature would you say your developer engagement efforts are, and the sales playbooks that are associated with them, and what is in place and what needs to be done? Chris? Yeah, no, I think this is a really good question. I think we are now coming to a real maturity level with some of our products around the space, and we are developing sales playbooks for our teams. We've rolled out the first instantiation of that playbook in the last six months. Then we have our SKO coming up soon. One of our plays is to go after this workload. Obviously, we had to wait till our products matured to a point where we felt that they were really ready for the entire marketplace, and we feel they're ready now. I think we're in a good spot moving forward, and I'll leave it to the others to talk about our strategy on product. Going directly to the developer, which we're very early on in that fight. We mostly sell to the infrastructure players. Within the infrastructure team, one of our goals is to enable those infrastructure teams to be able to offer services to their developers. When it comes to cloud native, for example, we provide a platform that can do cloud native storage really well. Developers can make use of the platform to land their workloads. We also partner with providers of cloud native stacks. In fact, last quarter, for example, we talked about Azure Arc managing Kubernetes clusters on-prem as an example of our ongoing partnership with Azure. That combination is what helps us to get some of these newer capabilities into the market. Just to add also, I'm sure Rajiv has some points to this, too. Look, as a technology vendor, as a software vendor, we use also these DevOps tools ourselves. A big open source community is behind this as well. We do tons of work with Jenkins. We do tons of work with other open source platforms. Look, as a platform vendor, we want to make sure we are the platform where application developers and DBAs come to develop, run, manage their applications securely. From that perspective, to Rajiv's point, you're new in this, but you're building those partnerships. As we talked about Era for DBAs and app developers, we're giving them access now if they're using MariaDB, Mongo, HANA, and some of the other open source technologies like Postgres, and including obviously some of the work we're doing with SQL Server and Oracle. There's going to be a lot upside as we move forward in this space. Great. Thank you. Our last question comes from Katy Huberty of Morgan Stanley. Katy's question is, "The large downtick from 67.5%-50% sales and marketing as a percentage of revenue from fiscal 2021 to 2023 is material. Can you talk about why, one, productivity gains will be so much greater during this period, and two, whether there are any areas that you're actually cutting costs to fund compensating a sales force that is executing better?" Duston, you want to start with that one? Yeah, I'll start, and I'm sure Chris will want to add in there. Again, on the downtick of S&M, you've got various phases of that from 2020 to 2021. Obviously, we got helped a little bit by COVID with travel, although there's been a ton of efficiency work being done by Chris's team and Ben's team, demand gen, we talked a little bit about there, getting much more efficient. That's helping out from 2021. 2022, there's some productivity help there, a little bit more with renewals. 2023 and beyond, it's heavily based on renewals. That one slide that I showed there, specifically in the presentation, showing the impact as the renewal percentage of our business continues to accelerate, that being transacted at 80% more efficiency. Naturally, the sales and marketing as a percent of revenue will start to decline throughout that period and ultimately getting to what we believe is a very competitive percent of revenue. Maybe a little bit on productivity if you want to talk to us. Yeah, sure. I can talk about productivity and a bit of efficiency as well. I did talk about it in my presentation, but what I will tell you is that we've done a great job this year as a team. We've got substantial productivity gains versus previous years. We've developed that ability as a sales organization. Now, we've also gone out and benchmarked ourselves externally, and I know we have more room to grow. There's a lot of things that we can do around the programs that I rolled out in my presentation, which is how we align with our ecosystem partners, our channel partners, how we're driving the sales management and leadership framework around pace, around pipeline. There's a lot of great work being done, and I'm confident that we can drive these productivity gains, especially with the great product set that we have. The repackaging of our solution sets is going to allow us a lot less friction in the marketplace and our ability to really drive more opportunity in the marketplace. That is another thing that will help. On the efficiency side, as I mentioned in my presentation, we sat down, we did some soul searching, we looked at ourselves and took a look at where were we being inefficient in certain markets, segments, and functions. As a lot of you know, we did some restructuring in the sales and marketing organization. From a people perspective, we took down our costs by 2.5%, and that was a significant cost take out of the business. It was needed to make sure we were going to build on a strong foundation moving forward. We're really confident in now accelerating that into our business. Additional to that, we looked at how we shift money in the marketing area from physical to virtual. I mentioned in my presentation as to how the team has really responded well, hitting all of our pipeline goals while taking down our marketing spend pretty good level. There are spend takeouts in the business and efficiencies that we've driven in, and we'll continue to drive those efficiencies moving forward. Mike, can I add one more thing? You talked about it, Chris, and I think Rajiv hit it in his first slide. I just want to also do a shout-out to the teams. Those are new to the team. I'll tell you, we have the best talent in the industry. Not only in the go-to-market, in engineering, product marketing, corporate marketing, across the board. That's making a huge difference for us. Thank you, Tarkan. All right. First, I'd like to thank all the presenters, Tarkan, thank you guys so much for your time. Most importantly, thanks to all of you for joining us. We do have a survey. It's on the Links and Presentations tab in your platform. We'd love for you to fill it out so that we can do an even better job next time. Our presentations are available also on the Presentations tab and also on our Investor Day website. We're going to close out today with a Clusters video. Thanks again, everybody. Thank you all. Thank you.