Microsoft Joins Forces With Nutanix On Hybrid Cloud Solution

Microsoft and cloud service provider Nutanix are teaming up to roll out a hybrid cloud solution for a single software stack with seamless application, data, and license mobility.

As part of the partnership, Microsoft (MSFT) and Nutanix will focus on extending Nutanix hybrid cloud infrastructure to the tech giant’s Azure software. This will include the development of Nutanix-ready nodes on Azure to support Nutanix clusters and services. Customers will be able to run hybrid workloads seamlessly across private and public clouds and benefit from extended security updates to improve security and efficiency, the companies said.

“Many companies face complexities when managing hybrid cloud environments across private and public clouds,” said Microsoft’s Scott Guthrie. “We are excited to collaborate with Nutanix to give customers flexibility and a seamless experience with hybrid Nutanix and Azure solutions.”

The unified hybrid and multi-cloud solution aims to provide the flexibility of choosing the right cloud for each workload, without the operational and technical challenges of managing multiple environments, potentially resulting in significant cost savings, the companies said.

In addition, Microsoft and Nutanix (NTNX) will collaborate on providing customer sales and support services. Microsoft Azure customers will be able to use their existing Azure credits to purchase Nutanix software. In turn, Nutanix customers will be able to port their existing term licenses to Nutanix clusters on Azure or get on-demand consumption of Nutanix software through the Azure marketplace.

Shares in Microsoft have gained about 29% so far this year as the tech giant continues to benefit from increased demand for remote services and cloud solutions during the coronavirus pandemic. (See Microsoft stock analysis on TipRanks)

At the end of last month, Mizuho analyst Gregg Moskowitz lifted the stock’s price target to $240 (18% upside potential) from $225 and maintained a Buy rating after hosting virtual meetings with management.

Moskowitz pointed out that Azure demand trends have remained “very good,” and is encouraged by signs of increasing monetization of Microsoft 365 / Office 365. Looking beyond the pandemic trends, Moskowitz believes Microsoft is positioning itself for “even greater success in cloud over the medium-term and beyond”.

Overall, Wall Street analysts have a bullish outlook on the stock. The Strong Buy consensus scores 26 Buy ratings versus 3 Hold ratings. The average price target of $229.52 still implies 13% upside potential over the coming year.

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