Homework Question

Senior Lecturer Homa Bahrami prepared this case study with Case Writer Victoria Chang as the basis for class discussion rather than to

illustrate either effective or ineffective handling of an administrative situation.

Copyright © 2015 by The Regents of the University of California. All rights reserved. No part of this publication may be reproduced, stored,

or transmitted in any form or by any means without the express written permission of the Berkeley-Haas Case Series.

Date: June 10, 2015

HOMA B AHR AMI

Nimble Storage: Scaling Talent Strategy Amidst Hyper-

Growth

We believe that if we give people the opportunity to

amaze us, they often will.

—PAUL WHITNEY, VICE PRESIDENT OF HR

In early 2015, Suresh Vasudevan, CEO of Nimble Storage, a rapidly growing hybrid data storage

system company, walked past bright orange Adirondack chairs at Nimble’s corporate offices in San

Jose, California. He was deep in thought as he smiled and waved to employees who were enjoying

Nimble’s 30,000-square-foot outdoor living room, designed for collaboration and social interaction. It

was not unusual to see pairs of managers and direct reports walking and talking, conducting their

quarterly coaching conversations. Vasudevan was on his way to meet Paul Whitney, Nimble’s Vice

President of Human Resources, to discuss several talent initiatives that had just been launched.

Founded by Varun Mehta and Umesh Maheshwari in 2008, 1 Nimble developed a hybrid storage

system that used flash memory and hard disks that allowed the company to offer faster performance

and lower prices to its customers. The company’s mission was to give its “customers the industry’s

most efficient flash storage platform.” 2

Even though Nimble had only begun shipping products in 2010, it was on a path of hyper-growth,

having gone public in December 2013. 3 For the year ended January 2015, Nimble’s revenue was

$228 million, almost doubling from $126 million the year before (Exhibits 1, 2, and 3). The

company was yet to be profitable, however, losing $32 million in the year ended January 2015 and

$43 million a year earlier, largely due to high operating expenses such as R&D, sales and marketing,

and administration expenses. The company had publicly announced its goal to become profitable by

January 2016 and had big ambitions to “transform the world of storage” with the goal of becoming a

billion dollar company in three years.

1 In March 2011, Varun Mehta became the vice president of engineering and Suresh Vasudevan became the CEO.

2 http://www.nimblestorage.com/company/how-we-are-different.php.

3 Nimble gained more than 60 percent to $33.93 from its opening price of $21 (raised from an initial range of $16 to $18). The company sold 8

million shares, raising $168 million at a valuation near $1.5 billion. The year 2013 was a popular year for data storage where NetApp, the

enterprise storage company, went public, as did SanDisk and Pure Storage.

B5839

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NIMBLE STORAGE 2

In 2013, the company added 1,300 mid-to-large customers—such as cloud-based service providers, as

well as those in education, financial services, healthcare, manufacturing, state and local government,

and technology—to reach over 1,750 customers as of July 31, 2013. And in 2014, the company added

more than 2,000 to end the year with over 4,000 customers, and over 5,000 by early 2015. Nimble

reached its customers through value-added resellers (VARs) and distributors, and to end-customers

directly through its global sales force. The company had 70, 220, and 600 VARs in 2011, 2012, and

2013 respectively.

From January 2011 to July 2013, the company experienced triple digit year-over-year revenue growth

rate and headcount with one employee hired per day—employees grew from 47 to 464, and by the end

of 2014, the company had over 800 employees with a small team of 15 HR staff. The company

expected to double its employees in the next 12 to 18 months. Despite such fast growth, Nimble was

selected as one of the Bay Area News Group’s Top Workplaces in 2013 (#9 in the medium category)

and #4 in 2014, based solely on employee feedback related to work conditions, pay and benefits,

engagement by managers, execution, career advancement opportunities, and overall direction. 4

As Vasudevan and Whitney sat down in a transparent glass-walled conference room overlooking the

company’s green park space, they were excited to talk about the new talent initiatives Whitney and his

team had just launched, including a new flagship leadership program called LEAD, a foundational

three-day program that had plans to become a nine-month development experience that included an

action-learning component. They shook hands and began their discussion.

Industry Growth

The data storage industry was in the midst of a hyper-growth phase. Enterprises gathered, stored, and

analyzed more data more frequently, requiring storage solutions that could scale with higher

performance and less cost. 5 Nimble’s S-1 stated: “According to the IDC Digital Universe Study…the

amount of digital information created, replicated, and consumed worldwide will grow exponentially

from 0.8 trillion gigabytes in 2010 to 40 trillion gigabytes in 2020. This exponential growth in data

and the need to rapidly access, efficiently retain, and protect data is driving a significant amount of

enterprise spend on data storage systems and software….Data has become a key strategic resource for

modern enterprises and cloud-based service providers. Transactional, analytical, communications,

and other applications that are critical to day-to-day operations and competitive differentiation in

today’s business environment generate and require an ever increasing amount of data.” 6

IDC estimated that enterprises will spend $42.5 billion worldwide on data storage systems in 2017,

while Gartner estimated an additional $21.3 billion in worldwide spend on storage software. “As a

result, storage systems that securely retain and supply data and applications are a core strategic

element of IT infrastructure today.” 7 Vasudevan added: “Business workloads have proliferated.

Whereas once they might have had 15 software applications, today, companies might have dozens or

hundreds [driven partly by the expansive use of smartphones]. Companies are gathering an enormous

amount of information and making lots of real-time decisions,” requiring faster and more efficient

storage technology. 8

Specifically, companies needed cost-effective storage capacity that could scale, high-performance

storage in an environment where data was transferred in and out of storage, comprehensive data

4 http://www.nimblestorage.com/news-events/press-releases/nimble-storage-named-top-workplace-by-the-bay-area-news-group.

5 Nimble Storage S-1, p. 83.

6 Ibid.

7 Ibid.

8 http://news.investors.com/technology/121313-682874-nimble-storage-rises-in-stock-ipo-debut.htm.

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NIMBLE STORAGE 3

protection that could prevent business disruptions from data loss or interruption in data availability to

applications, an optimized footprint and cost of operations so that storage solutions required less

space, and simplified management of ongoing system administration. 9

Several technology disruptions, such as the emergence of high-performance flash storage media and

powerful data analytics capabilities, have changed the storage industry. Flash, “a solid state memory

technology designed to provide rapid random access to data, has emerged as a high-performance

alternative storage media…because it can deliver significantly higher read performance than HDDs

[hard disk drives that supported legacy storage systems].” 10

HDDs “degrade in performance when

handling the random I/O [input/output] needs of today’s enterprise IT environments.” The second

technology disruption (powerful data analytics capabilities) have brought “significant improvements

in the ability to connect, analyze, and monitor large amounts of distributed data in real-

time…presenting opportunities to improve the operations and management of storage systems.” 11

According to Vasudevan: “For decades, HDDs have done well in helping to address data growth in

enterprises as they steadily increased in density, thus helping to store more and more data cost-

effectively. However, where storage systems based on HDDs have not done well is in cost-effectively

addressing application performance needs. This is because even though HDDs have improved in

density, their I/O performance has remained by and large unchanged over the last decade or so, with

the result that storage systems have had to over-provision HDDs to match an application’s

performance needs. Consequently, enterprise storage systems have traditionally been good at either

delivering capacity or performance cost-effectively, but not both simultaneously.” 12

Nimble’s Solution

Nimble’s founders, Maheshwari and Mehta had never started a company before Nimble, but had

worked in many companies in the industry and were known as storage gurus (Exhibit 4). Mehta was

Vice President of engineering at Data Domain, a data backup and recovery company and Maheshwari

was a legendary coder who had architected key parts of Data Domain’s file system. Maheshwari has a

Ph.D. from MIT and won a gold medal in computer science at IIT Delhi. “We were the classic, ‘two

guys and a PowerPoint deck of 10 slides and Sequoia gave us $8.8 million to get started,” recalled

Mehta. “Until that point, no one in the prior 10 years had successfully competed against big

entrenched storage players such as NetApp or EMC. And a bunch of storage startups had tried and

were faltering or had gone out of business because customers just weren’t buying from startups due to

the mission-critical function of data storage so investors were reluctant to fund anyone who would go

directly against those companies even though that was our secret ambition.”

The pair had pitched a two-phase product—one that would work with NetApp and EMC’s products on

the front-end as an accelerator and the second phase would be a product that competed directly against

them. The first-phase product was a flash-based caching appliance or “cacher” that sat on top of

existing storage systems and dramatically improved I/O performance. “What we realized is that our

funders loved the first phase and hated the second phase,” said Mehta. “But we discovered that

NetApp and EMC were taking major steps to incorporate flash into their products and doing it much

faster than we had imagined, so this basically obviated our need for our first phase product” (Exhibits

5, 6, 7, and 8).

The founders went back to the investors and made their case to pivot and focus on the second phase

product to build a primary-storage system that incorporated flash to pursue a much bigger opportunity.

9 Nimble Storage S-1, p. 83.

10 Op. Cit., p. 84.

11 Ibid.

12 http://www.networkworld.com/article/2224631/cisco-subnet/a-conversation-with-suresh-vasudevan--ceo-of-nimble-storage.html.

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NIMBLE STORAGE 4

“They basically told us, ‘you are out of your mind,’” said Mehta. “And we nearly shut down. So we

went back and worked on the first product and all the while continued working on the second product

too. It took us a year to convince our investors to let us pivot.”

Jim Goetz from Sequoia said: “Our co-investors from Accel and Lightspeed joined us in pressure

testing the plan—we pressed him [Varun] hard. He answered us at every turn and never wavered that

the pivot was the right thing to do, which after endless hours of debate won us over.” 13

During development, the founders talked to 100 customer prospects to find out what would convince

them to buy Nimble’s product and the prospects responded: “10x performance improvement for little

additional cost.” On customers, Mehta said he was influenced by Steve Blank’s The Four Steps to the

Epiphany: “His advice to determine whether customers are going to buy the product is to talk to them. He said that if you give away a product for free and they still don’t want to use it, that is very telling.

For me, this has shaped everything we do across the company from product development to HR.”

Goetz said: “They drew on all their experience to build Nimble’s system. They took advantage of

flash in the areas it was best, but also used standard disk drives where it made sense. They combined

primary storage and backup in one architecture and developed new file-system software to manage it

all. After two and a half years of development, they’d achieved the impossible-sounding 10x

improvements at a competitive price.” 14

As Goetz explained further: “From a technology standpoint Nimble’s plan had merit. Flash drives are

a lot faster than traditional disk drives and provide businesses speedier access to their data. Because

flash is more expensive, established storage companies treated it as an option for the high end of the

market. Nimble saw a chance to target mainstream businesses, but thought the window wouldn’t stay

open long.” 15

Vasudevan said on flash and startups: “The unique thing about flash is also its problem, which is

that—if all I want to do is deliver performance, I don’t need to build a very optimized array. 16

It is so

fast that even a mediocre design is going to be way better than disk. That’s why there are over three

or four dozen companies all in storage. There are more storage startups than ever before simply

because it’s so easy to make a flash product and say ‘look how well I do on performance.’” 17

He added: “I think the first mistake is to only rely on flash as a performance medium, and go basically

build an all-flash array without data management, ease of operations, and other things. In the end, no

matter what you do, that means you’re going to be going after only the really high-performance

applications, because you can’t just ask a customer to pay four or five times more for an application

when they could absolutely get away with not spending that much. They’ll only buy if they actually

need it.” 18

Nimble’s products were based on its patented Cache Accelerated Sequential Layout (CASL) hybrid

storage architecture that leveraged fast read performance of flash and the cost-effective capacity of

hard disk drives. Nimble combined this flash-optimized architecture with Nimble InfoSight, a cloud

based management service that delivered predictive support and operational simplicity through deep

data analytics.

13

http://sequoiacapital.tumblr.com/post/69884048439/the-bet-the-company-pivot-that-led-to-nimble-storages. 14

Ibid. 15

Ibid. 16

A disk array is a hardware element that contains a large group of hard disk drives. 17

http://willemterharmsel.nl/nimble-storage-ceo-suresh-vasudevan-nimbles-culture-post-ipo-plans/. 18

Ibid.

This document is authorized for use only by Patricia Vela in OL-668-Q1316 HR in Global Contexts 20TW1 at Southern New Hampshire University, 2020.

NIMBLE STORAGE 5

The company shipped its first product line, its CS200 series, in August 2010. The CS200 Series

systems were designed for midsize IT organizations or distributed sites of larger organizations,

supporting workloads such as Microsoft applications, virtual desktop infrastructure, or VDI 19

or server

virtualization. Customers signed up to buy the product with strong demand.

Dan Leary, Vice President of Worldwide Marketing, and one of the earliest employees said: “In

marketing, we were thinking about a scalable way to build up demand. We are a very metrics and

analytical company and we wanted to measure the effectiveness of everything we were doing as we

were building and nurturing leads to become deals. My belief was that if we could build up an

evangelical customer base of 1,000 or 2,000 customers, that will do much more than building

awareness of Nimble’s brand and other traditional marketing.”

At that point, the founders partnered with Vasudevan who joined Nimble’s board. Vasudevan became

Nimble’s CEO in March 2011, while Mehta became the Vice President of product development and

Maheshwari, the CTO. Vasudevan had “a spectacular” career at NetApp and spearheaded the

company’s go-to-market plans. Goetz said: “Unlike many leaders, Suresh [Vasudevan] can not only

convey a compelling vision, but he’s also a great listener and facilitator who brings the best out of

people around him. He created an environment that embraced new talent, while also getting the most

from the company’s original executives.” 20

In August 2012, Nimble launched its CS400 series of products and a number of scale-to-fit products,

including expansion shelves and controller upgrades. The CS400 series delivered higher performance.

In June 2014, the company announced the CS700 Series Arrays, including fibre channel protocol, 21

and an All-Flash Shelf. In August 2014, the company completed an overhaul of its CS series, and

added the CS300 and CS500 to their line-up.

One example of a Nimble customer was an Australian financial institution that needed additional

storage due to a significant growth in customer data across its 4,200 databases. The key requirements

for the new solution were reliability, performance, simplicity of management, data center space

requirements, power consumption, and overall cost. After deploying Nimble’s storage system and

expansion shelves, the company realized a 2.5x performance increase, a 4x reduction in power and

cooling costs, and significant capital cost savings. 22

Vasudevan said on Nimble’s competitors: “Our most frequently encountered storage vendors that

account for over 80 percent of the engagements, are: 1) EMC with their mid-range VNX products; 2)

NetApp with the FAS product line; and 3) Dell with the Equallogic and Compellent product lines.” 23

On the smaller companies, Vasudevan said that Tintri, Tegile, and Pure Storage were the most

important competitors. 24

Maheshwari said: “Our success has been based on customers actually liking

their experience, as opposed to a forceful marketing strategy. People pick us because our system just

works—you can trust it.”

Vasudevan added: “What they [big players like EMC] have done for the last three or four years, is

incorporate flash into their own product lines. But if you just do that, you’re missing out. You need

to build something new to take advantage of all the promise of flash. They fundamentally have to re-

architect it from the bottom up, from the ground up, and it’s going to be competing with their other,

well-established product lines. The challenge they face is, how do you start something from zero and

19

Virtual desktop infrastructure or hosting a desktop operating system within a virtual machine running on a centralized server. 20

http://sequoiacapital.tumblr.com/post/69884048439/the-bet-the-company-pivot-that-led-to-nimble-storages. 21

Which allowed customers to “get in the enterprise.” 22

Nimble Storage S-1, p. 94. 23

http://www.networkworld.com/article/2224631/cisco-subnet/a-conversation-with-suresh-vasudevan--ceo-of-nimble-storage.html. 24

http://willemterharmsel.nl/nimble-storage-ceo-suresh-vasudevan-nimbles-culture-post-ipo-plans/.

This document is authorized for use only by Patricia Vela in OL-668-Q1316 HR in Global Contexts 20TW1 at Southern New Hampshire University, 2020.

NIMBLE STORAGE 6

have it go to several billion even as it cannibalizes your other products? How do you manage that

transition?” 25

Vasudevan believed that Nimble’s system would be able to grow with the industry’s evolution to

flash, because the company could easily engineer its system to include a lower tier for flash. “Hybrid

is often the name given to our solution and it brings along the connotation of ‘in-between,’” he said.

“We see it as being able to work with the best of both worlds. We have both flash and disk in our

scope and could easily adjust or diversify into all-flash.” 26

Chetan Rai, Vice President of Software

Engineering agreed: “We’re not wedded to any particular technology. We are trying to find the best

tools for the job. And if there are new tools that make more sense to us, we feel quite comfortable that

we can use those tools as well. As the cost of flash continues to drop, we can easily move in that

direction if we need to. We’re not a stop-gap technology.”

In essence, Nimble’s advantages over competitors were: “1) More and faster storage for the buck.

Two to five times more storage capacity and five to six times greater performance for the same

amount of capital spending. 2) More frequent backup. With a tiny increase in stored data, Nimble’s

system lets customers back up their networks every 15 minutes—or as often as they wish—far more

frequently than competing products. 3) Quicker recovery. Nimble’s storage arrays let companies

recover data in minutes compared to an hour for competitors’ products. 4) Simplicity. While it can

take four to eight hours to set up competitors’ products, Nimble customers are up and running in 20 to

30 minutes. 5) Service. At five minute intervals, Nimble analyzes the health of its customers’

networks and if it identifies a current or potential problem—such as unusually high temperature in the

data center—initiates a support call. Nimble spurs 75 percent of these calls to nip such problems in

the bud.” 27

Leary said: “Now, a lot of the focus is on how to deploy flash in the data center today and

talking about what we do or adaptive flash and helping to evangelize why our approach is the broadest

and allows customers to solve the broadest range of problems within a single platform.”

Talent Strategy: “Balancing Today with Tomorrow”

Anup Singh, CFO and head of HR in the early years, joined in 2011 when there were only 100

employees; and during that time, he and his team focused on building and articulating the company’s

core values and managing day-to-day HR issues. Nimble’s values were accountability, innovation,

initiative, integrity, listening, and teamwork and collaboration (Exhibit 9).

Terry Wong, who was the first HR person hired by Singh, discussed the earlier years of HR at

Nimble: “When I first came on in 2012, HR was very tactically driven and had a pretty weak

reputation because the person that was here didn’t have HR experience, having come from an office

manager position. We wanted to establish that HR does have value and we wanted to show value in

everything that we did.”

In January 2013, Nimble hired Paul Whitney as Vice President of HR. Whitney wanted to “think

about how to build and deliver on an HR organization that would address the needs of a hyper-growth

organization,” he said. “Nimble is experiencing a triple digit year-over-year revenue growth rate and

headcount, with 80 to 90 new people per quarter (one per day). I came in when there was very little in

place, a bare minimum HR structure. My job was to develop a strategy that would support growth and

maintain the things that were fundamentally important to the organization, like the culture.” He was

also hired to prepare Nimble to become a public company.

25

http://www.bizjournals.com/profiles/company/us/ca/san_jose/nimble_storage_inc/3324176. 26

http://willemterharmsel.nl/nimble-storage-ceo-suresh-vasudevan-nimbles-culture-post-ipo-plans/. 27

http://www.forbes.com/sites/petercohan/2012/08/15/targeting-emc-and-netapp-nimble-storage-flashing-towards-an-ipo/.

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NIMBLE STORAGE 7

Whitney partitioned his job into three buckets, the areas around which Nimble’s people strategy was

based: 1) supply of talent (internal or external), 2) systems and infrastructure (provide systems that are

easy to work with and were compliant in a public environment), and 3) culture. “Depending upon the

filter that you’re looking at—a $200 million dollar company or a billion dollar company—the people

strategy elements will change,” he said. “There’s a difference between what you do now and what

you do to get ready for the future. In growth organizations in particular, today always trumps

tomorrow, unless you are very conscious about thinking about tomorrow. The challenge we had was

balancing both and making sure we were paying attention to both.”

As Whitney and his team built the HR strategy, they thought about Nimble’s annual operating plan

and applied the relevant filter of today and tomorrow and “made sure the things we were paying

attention to were incorporated into those three buckets.” Then they planned and prioritized with the

HR team and re-visited their efforts on a quarterly basis to make “corrections” as necessary. The team

had detailed plans that supported each of its actions. “Planning and prioritizing is critically important

anyway, but particularly so in a hyper-growth situation,” said Whitney.

A.J. Thomas, Director of Talent Development & Engagement said on Whitney’s style and approach to

HR: “Most HR people tell you to just go do something and to keep people from doing certain things.

Paul believes that HR shouldn’t be a function where you come up with a policy and ram it down

people’s throats. You have to understand where they are, meet them where they are, and bring them

towards where you want them to be.” On HR strategies and policies, Rai added: “We like to ask

‘Why?’ It’s not important to just say ‘What.’”

Supply of Talent: Hiring Right

When Vasudevan became CEO in 2011, Nimble had around 40 employees. He focused on hiring

sales and engineering people who were “highly talented, fit with its culture of collaboration, and had a

record of taking risks.” Maheshwari said that the bar was set very high for both technical strength and

attitude in the early days, so much so, that they couldn’t hire fast enough. And early on, most hiring

was done through referrals since the leaders already knew a lot of people working in the industry.

“Right away, we didn’t want jerks or prima donnas,” said Vasudevan. “Before the 300-person mark,

we really didn’t feel like we had to really think about people processes or scaling people.”

As the company’s business model became more established, its risk level declined and the company

started adding people “who have experience growing a more established venture quickly.” 28

Singh

said: “Early on, the company hired senior people who have had a lot of experience at bigger

companies who then built out their teams. We tried to recruit ahead of the curve so that the company

grew into the skills and capabilities of the people that we had.”

In 2013, Nimble hired 300 new employees with a recruiting team of two (one recruiter and one

scheduler). “That’s pretty remarkable,” said Whitney. And 60 to 70 percent of all of hires came from

referrals. Vasudevan added: “We love to work with employee referrals. It says a lot when our own

employees bring another potential colleague to us, because they will have shared the company culture

with that new colleague and have estimated they are the right type for us.” 29

Whitney believed that the amount of the referral award to employees “didn’t matter” (employees

received a combination of a small monetary award and a small amount of company shares—

amounting to $3,000 to $4,000 total), but rather what mattered was how the HR organization marketed

such programs to employees. He said: “We doubled down on employee referrals. We spend more

28

http://www.forbes.com/sites/petercohan/2012/08/15/targeting-emc-and-netapp-nimble-storage-flashing-towards-an-ipo/. 29

http://willemterharmsel.nl/nimble-storage-ceo-suresh-vasudevan-nimbles-culture-post-ipo-plans/.

This document is authorized for use only by Patricia Vela in OL-668-Q1316 HR in Global Contexts 20TW1 at Southern New Hampshire University, 2020.

NIMBLE STORAGE 8

time and energy than most organizations to market the program to our people to engage with them.

We are also very clear to our people ethically about pulling people from other companies.”

Beyond the referral program, Nimble incorporated managers into its hiring system by educating,

training, and engaging with all managers “to help them understand that hiring is their responsibility,”

said Whitney. “We have a more actively involved management team in the hiring process than at any

company I have ever seen. Typically managers wait until the recruiter comes to them with résumés.

We changed our emphasis so that our hiring managers are driving recruiting in a more active and

engaged way. We’re bigger now, but we still only have three in-house recruiters.”

Whitney acknowledged that giving managers recruiting responsibilities added additional work onto

already full plates. However, he said that “hiring the right people is so important to us that we think

managers should get involved in the hiring process early rather than later. And it’s working. We’re

still hiring at a rate of one person per day.” Rai said: “Our managers think it’s a lot of work to hire,

but they feel like they own the process.” Ashish Prakash, Vice President Solutions Engineering,

agreed: “It’s in the best interest of that team to be involved and driving the hiring process. HR is here

to support you, but at the end of the day, you make the hire to create a high-performing team.”

On the philosophy behind involving managers in the hiring process, Whitney said: “The problems

we’re trying to solve with the recruiting process are awareness, interest, and engagement. Recruiters

have traditionally approached the process as an order fulfillment job and therefore have a tendency to

think tactically instead of strategically.” Whitney felt that the traditional recruiting process was

inefficient, where recruiters would email hundreds of people and receive a one or two percent

response rate. Companies would solve their inefficient recruiting process by hiring more recruiters,

which simply made the process an expensively inefficient process.

Whitney continued: “So, if you take a step back, how do you solve this inefficient recruiting process?

Through engagement—this is a marketing thing, not a recruiting thing. Instead of recruiters looking

on outdated Linked-In pages, we approached it with the belief that people select the company before

they select the job. I think in the competitive Silicon Valley software engineering market, that’s

particularly true.” Wong commented on hiring in the competitive context of Silicon Valley: “One of

our challenges is how to attract good people. We don’t do lunches every day. We don’t have onsite

dry cleaning. Some people are looking for these things.”

Thus the Nimble team focused first on two steps: 1) marketing or building marketing campaigns

around the company and then 2) engagement or following up with candidates during the engagement

process to discuss what candidates were looking for in their next steps instead of what jobs were

available. On future efforts, Whitney said: “I want to break out a separate group to focus on candidate

marketing about Nimble, not about the job. The goal is to fill the pipeline,” said Whitney. Nimble

used Zappos as a model in that Zappos did not post jobs on their site at all. Rather, Zappos first

focused on the company. “I think this shift of recruiting to more of a marketing organization is

fundamentally important,” he said.

On engagement, Whitney wanted to develop a different group that focused on relationship

management between the hiring manager and the candidate. He said: “Recruiters never have enough

time to do any engagement. The goal is to deliver the best possible experience. And we hope to

manage and measure people in these two roles (marketing and engagement) in different ways. We’re

working on this now and how to build this all out.”

The team internally called these efforts, the “War for Talent” and viewed it like lead generation in

sales where their talent scout team would filter those leads and put them into different talent communities (QA, Software Engineer, Hardware Engineer, and Marketing) and nurture them.

Thomas said: “We really want to make sure we’re building and cultivating these talent communities

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NIMBLE STORAGE 9

so that when we have open positions, we already have talent available. We don’t want to recruit for

people now, but we want to be more proactive through leads we have nurtured and built relationships

with. This strategy will help us scale so we don’t have the problem of more requisitions and more

recruiters. Recruiters will have more of an account management skill where they champion the

process to get people onboard faster with a better experience.”

Infrastructure: “Outside-In” Systems and Processes

The second area of focus for Whitney and his team was putting systems and processes in place to

support company growth. This included a new HR system, a recruiting system, and a manager

system. On infrastructure philosophy, Whitney said: “Systems should be invisible to managers to the

greatest extent possible and should be as easy to work with as possible, as well as be compliant with

the requirements of a public company. We think about how we deploy these systems so that they

drive adoption. We think about the impact of systems, the impact of change, and making sure that

managers have the best possible experience. A lot of companies use compliance as a stick to beat

people with, but we think about it another way—what is it that, from a manager’s perspective, is going

to make this effective? So we reverse engineer from that point. It’s an outside-in mentality versus an

inside-out one.”

Since Nimble had staff in 18 countries around the world, with new countries added frequently, the

scalability and accessibility of systems was really important, along with mobile accessibility. Nimble

used the Workday system, made by a cloud-based HR and Finance software company. Whitney chose

Workday because it was an integrated easy-to-use system that had mobile capabilities based on the

audience served, and worked on “getting the system as close to best-in-class as possible” instead of

choosing the best-in-class system for each HR category and bolting together different systems and

having potential issues integrating them. Whitney said: “Workday was way more than we needed at

the time.”

Singh felt that Nimble’s people infrastructure and systems were “A+.” He said: “Did we really need

to implement a Workday system a year ago? Probably not. We could probably track 800 people on a

spreadsheet. However, if you think that we will grow to 2,000, then that’s a different story. We are

investing in growth and automation across the company such as Workday, and in other areas like

invoicing.”

Culture and Values: “Absorbable, Actionable, and Memorable”

Nimble’s culture before Whitney’s arrival was articulated through the company’s values, which were

“laudable words” such as “accountability, innovation, initiative, integrity, listening, and teamwork and

collaboration.” However, Whitney believed that those words didn’t really set Nimble apart in any

meaningful way. “We wanted to capture the essence of our values but to re-articulate them to make

them more absorbable, actionable, and memorable.”

On culture, Whitney said: “At the end of the day, I think culture is made up of the actions, behaviors,

and impacts of the individuals that make up the company.” The re-articulated values were: 1) No

Jerks, 2) Think Creatively, 3) Make it Happen, and 4) Be Open (Exhibit 10). Each value had a list of

do’s and don’ts to give employees some concrete examples (Exhibit 11). “These are things that

resonate across the organization and people understand what they mean,” said Whitney. “Values are

not things that should just come and go,” he said. “You could translate any of our original six words

into any one of the new values.”

As Whitney and his team surveyed employees about values, they continuously heard “No Jerks” as a

value, but it wasn’t formally a part of the original values so he and his team wanted to make sure “No

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NIMBLE STORAGE 10

Jerks” was articulated as a value. Vasudevan elaborated on “No Jerks”: “We believe that truly aligned

teams can achieve far more than a team of superstars that do not collaborate well. To that end, we

focus energy on hiring and retaining smart and collaborative people. If I can choose between an

arrogant rocket-scientist and an agreeable guy that I love to work with that isn’t quite as talented yet, I

choose the latter.” Whitney added: “I’ve seen moments of truth where we stuck to our guns and

applied that ‘No Jerks’ policy. Even if someone is performing well in their jobs but is doing so to the

detriment of the organization, then that’s not what we want and you will not survive here. It’s real.”

Rai added: “It’s not that we don’t disagree and we are not shy about expressing our opinions at

Nimble, but we explain the thoughts behind our points of view and come to some kind of agreement

and understanding. ‘No Jerks’ basically means that we hire people who work well with other people.”

Whitney said: “The culture of innovation here in Silicon Valley is about people debating with each

other; if you stifle that debate, you lose the best innovative ideas. The easiest way to stifle a debate is

to have a jerk for a manager. That’s why, ‘No Jerks.’”

On the original value of “accountability,” different parts of the organization viewed the value

differently. For example, Nimble’s sales people focused on the negative connotation of the value—

that if they didn’t do something, they would get fired, which went against Nimble’s culture. Others in

the company felt that accountability meant that they owned something and would do their best to get it

done. “The two interpretations of the accountability value were in conflict with each other,” said

Whitney. “Our re-articulated value of ‘Make it Happen’ seems better at addressing what the intent of

accountability is and it makes it actionable too. And actionable is one of the prime filters we applied.”

On the “Make it Happen” value, Vasudevan added: “We don’t believe we can go from point A to

point B in a straight line. We would rather make a dozen mistakes, as long as we can course correct

quickly. One of our key tenets is to ‘make a call,’ if the call is wrong, just make sure it’s correctible

quickly. People should have the courage to make a quick decision.”

On the value, “Be Open,” Whitney pointed to the company’s emphasis and focus on finding structured

and unstructured ways to hear what the employees were saying, as well as acting on what they heard.

Wong said that Nimble’s HR organization was very feedback-oriented: “I’ve been with a lot of HR

departments where things will be announced and this is the way it’s going to be. In our department,

there are focus groups, questions, and a number of feedback processes that we go through to make the

best decisions. While this can be painstakingly slow sometimes, the actual output in the end is so

much more positive and adoptable because so many people have given their input that people will

know that we listened to them even though we might not implement everything they wanted.”

Vasudevan said that the feedback-oriented culture started at the top when focusing on solving

problems: “We focus on the drivers versus ‘what did you do wrong?’ This is how we analyze every

business problem. At the senior level, we are a constantly debating culture and a first principles kind

of culture where we are not afraid to abandon something in the past to do something right, almost too

much sometimes.”

Moreover, every employee at Nimble had cubes that were the same, including managers. Singh said:

“Employees don’t see managers as people behind closed offices. Our culture is very egalitarian. The

single most important thing for people at companies is transparency. Employees love it when you

treat them like adults. The last thing you want to do is to recruit smart people and treat them like

idiots or like kids.” Even meeting rooms had glass walls so that everyone could see people in

meetings.

Rai added that the whole company operated in an open manner: “We are data-driven in terms of everything, like our customer support. Our product gathers data from the systems that are out there,

recognizes patterns in that data, and reacts to those patterns by opening cases and contacting those

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NIMBLE STORAGE 11

customers, etc. These are systems and tools we put in place to gather data and respond efficiently.

We have learned from our products and we have applied this to HR. Yes, some surveys take time to

do, but those are intended to capture long-term issues. Short-term issues, we handle more quickly.”

Whitney and the company’s managers worked for nine months to re-articulate the values and included

many people, as an example of “Be Open.” “And if it took another nine months, we would have been

okay with it because values are the DNA that drives your organization and it’s the DNA that you need

to maintain as you grow and values are the core DNA of the organization you want to preserve.” The

nine-month process involved surveying employees, going to management with some initial ideas, and

going back to employees and to management several times. On the values process, Singh added:

“We’ve had values for three years, it’s not like we just slept on it. We threw something out, but we

tweaked it along the way. It’s a software model in which you get something that is good enough into

the market and then you spend a lot of time resolving the bugs. The culture is no different in that it

mirrors how we approach our products.”

Maheshwari said on the analytical nature of the company: “We are a very self-analytical company.

There’s innovation, but that innovation is within the product to make it well-rounded and efficient. So

there’s innovation in efficiency as opposed to innovation for some extreme performance. Nimble isn’t

about being super-fast, but being reasonably fast with efficiency. We’re not like a Tesla, we’re quieter

like a Prius where there’s innovation inside.”

Wong said on implementing the values: “Our values are really a part of everything we do. When we

run our programs or recognition programs, we talk about people not being jerks, being open and

communicative, and how those values really do relate to the rewards and recognitions that we do.”

Out of surveys, Nimble also developed an Employee Charter, the “company’s obligations to the

employee,” or the flip side of the values: “Employees want to be competitively paid, they want to do

challenging work with the opportunity to grow their careers, they want to have trust in their

leadership, and they want to work with people they want to work with,” said Whitney. Nimble’s

surveys were structured around the charter and the various talent initiatives were adjusted accordingly.

The Charter represented the notion that leaders/managers created the environment where employees

work. Vasudevan said on the importance of the Charter: “All of my 5 to10 top problems in my career

have revolved around people leaving in a way that I wish didn’t happen—employee retention and

motivation issues. Even now, the single biggest challenge we have faced in the past nine months is

our head of sales leaving for family reasons. Our business problems always seem to stem from the

fact that a business team is not effective.”

Singh said on the charter and values: “It’s a two-way process, a give-and-take, and two sides of the

same coin. Having a two-way dialogue with the employees is really powerful. Our values are more

than just some words framed on the wall. Our Values and Employee Charter have allowed us to do

things from a framework or program perspective that, at our size of company, I’ve never seen before,

such as the LEAD program” (discussed below) (Exhibit 12).

Other Talent Efforts

Apart from the three core initiatives discussed above, the Nimble team also focused on other areas

such as onboarding, retention, career development and compensation, and leadership development.

Onboarding

When Nimble had around 100 people, the team implemented a basic new hire orientation program. Eventually, the program expanded with the purpose of making people comfortable with the decision

they made, providing them with access to tools and processes they needed, and providing them with

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NIMBLE STORAGE 12

networking opportunities. On the first day, employees were exposed to company basics such as

values. Subsequently, the employee’s manager was responsible for onboarding over a 30-, 60-, and

90-day period—this managerial onboarding component was a new effort implemented in early 2015.

Within their first 90 days of employment, employees participated in the week-long Nimble NEXT

(New Employee Experience Training) event in San Jose, California, or the Research Triangle Park site

in Raleigh, North Carolina, where new team members were welcomed and executive leadership

shared the vision, values, and company and departmental goals. New sales, engineering, and customer

service employees were brought together through engagement activities for networking opportunities.

Nimble NEXT was in an embryonic state when Whitney arrived and he and his team developed an

intranet site and expanded the initial program. “The NEXT program is proving a little harder to scale

since our leadership is busy and the program is so large,” acknowledged Thomas. “We’re still

thinking about how to leverage video and teleconference and how to complement technology with the

foundational program that we already have.”

Retention

Nimble’s attrition rate was low, in the single digits. “Retention to me has a sort of negative

connotation,” said Whitney. “I have this image of people clinging on with their fingertips or us

holding onto people who want to go. The way we approach it is that if we do all the right things, we

continually give people reasons to stay with the company. They stay because they want to be here.

We don’t want to sell people things they don’t want, very much like our sales force’s approach to

selling products. Instead, we are actively trying to say, ‘tell us what you want and we’ll try to create

the environment that makes you want to stay here,’ hence the Employee Charter.” Wong agreed: “If

employees are just looking for cash or equity, there will be other companies, but in the end, we have

to build the best environment, culture, and atmosphere so that employees want to stay and that’s what

we’re focused on.”

On retention, Singh added: “We want to give challenging projects to people, give them responsibility

and freedom, and incentivize people. However, ultimately, there will be some employees that enjoy

working in a garage with 12 people and when you grow to 3,000 people, they might not want to work

here anymore. From an innovation perspective in the Valley, that’s not necessarily a bad thing as

people travel from Excite to start up Yahoo, then to start up Google, then to start up Facebook, and

then to start up Snapchat to whatever the next thing is. Change is not a bad thing and as a leader

within a company, I’m not afraid of change. It’s Darwinian.”

Listening to employees, as part of its “Be Open” core value, was an important component of retention

at Nimble. The HR team continuously gathered feedback via surveys, focus groups, and one-on-one

meetings. The goal was to engage its employees and to understand how they felt about working at

Nimble Storage. The information was used to fine-tune talent initiatives, aimed at making Nimble a

desirable work-place.

For example, the team conducted 25-question semi-annual surveys (one at the beginning of the year

and one in the middle of the year) along with focus groups around those surveys to dig deeper into

issues they were working on. “We have a process of follow-up and execution based on what we hear

and we drive that on a functional level and an executive staff level,” explained Whitney. “There is a

formal process throughout the organization that allows us to access and act on input from our

employees.”

The first survey at the beginning of the year was in conjunction with the Best Places to Work program “which gives us an external view and we can compare to other companies,” said Thomas. “The

August survey is more in-depth but only has 25 questions because we don’t want to bog down our

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NIMBLE STORAGE 13

employees. We use the Culture Amp software program so we can dig deep and analyze. We always

get around 80 percent response rate on all of our surveys. We ask standard questions about manager

effectiveness and employee well-being, but it’s how we ask these questions. Instead of asking how

people feel about innovation, we ask for specific ideas about how we can be more innovative.”

Thomas added on surveys: “We are obsessive compulsive about surveys because we really want to

understand what our employees are saying and people here are not shy to give feedback because we

have purposefully built this kind of culture.”

Nimble also held CEO Roundtables and Founders Forums at least twice a quarter, where small groups

of employees were able to meet and interact directly with the CEO and founders to raise concerns, as

well as to hear founder stories about the company. Both programs were first-come, first-served and

each event allowed around 15 people. “This is a really informal setting,” said Thomas. “People can

ask anything they want. Employees really like this and see it as an opportunity to learn and voice their

concerns.”

Employees could also participate in Product Talk that happened once per quarter, which gave them the

chance to present and learn about new products. Competitive Chats that happened twice per quarter,

allowed sales people to share best practices with each other on how to deal with the competition. Off

the Cuff was led by Singh because he liked to wear cuff links, and employees around the world could

ask him spontaneous questions about competitors and the financial markets. Tuesday Talks allowed

employees to sign-up to showcase and present what they were working on to get feedback and these

were streamed across the organization. At the Raleigh location, Nimble had a What Box program

where employees could think outside of the box and bring any creative ideas related to business

processes or products. Nimble also had CEO podcasts where Vasudevan talked about different topical

issues.

Singh said: “We have a culture of openness and transparency. We share a ton of information with a

ton of people,” referring to Nimble’s Quarterly Business Review which was open to all directors and

above. “Sixty or seventy employees are a part of the meeting and we are very transparent.” Singh

said: “In theory, this openness should be harder as we scale. But big companies such as Google and

Facebook seem to hold onto a lot of things we do at Nimble. At Google, everyone has a cube, it’s an

open environment and they have weekly meetings.”

Complementing the foundational belief in listening to employees, Nimble launched a new program in

2014 called the Kudos Program. This peer recognition program allowed team members to submit the

names of outstanding contributors and colleagues. Prakash said: “We think this is an important part of

who we are as a company. Everyone here works very hard, and deserves a ‘pat on the back’ when

acknowledgement is due.” 30

When someone was nominated for a Kudos Award, they could log onto a

special online landing page which said: “Congratulations on being nominated for a Kudos Award!

Being nominated for this award means you did something spectacular. Simply log in below to choose

your complimentary Nimble swag.” 31

Career Development and Compensation

During the process of listening to employees, Whitney and his team learned that people “hated” the

annual review process, “so we don’t have it here,” he said. Instead, the company instituted various

manager/employee conversations around goals, coaching, career, and compensation as well as

conversations about next-level jobs. “We replaced the annual review with processes we believe

30

http://www.bizjournals.com/triangle/print-edition/2014/09/26/bptw-nimble-storage.html?page=all. 31

http://www.nimblerecognition.com/.

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NIMBLE STORAGE 14

work,” said Whitney. “We have processes that really affect the core relationship that matters—the

one between a manager and a team member. We can drive better results and better engagement by

having better processes that people are not fearful of and that have some meaning.”

Managers were expected to have these conversations once per quarter and employees were surveyed

about these conversations. In addition, each of these conversations had specific outcomes. Managers

were trained in these conversation processes and the training was offered semi-annually. The

company was also building coaching schedules into its Workday system.

Coaching conversations were a long-term investment to build high-performing teams. “We wanted to

create a culture where managers were having conversations with their employees,” said Thomas.

“Typically, companies jam these into one conversation at the end of the year and the manager might

just remember the most recent thing that happened. We wanted our employees to have conversations

around goals once per quarter so they would be aligned. We can have conversations that are more of a

dialogue. We have found these to be more effective and have also removed the administrative burden

of filling out a bunch of paperwork.”

And unlike many other companies, Nimble decoupled the performance review from the annual

compensation process: “We don’t make our managers differentiate between their team because they

usually find it really hard to do,” said Whitney. Instead, the company gave merit raises based on the

market. The company paid people who were doing a “really good job” at market and those who were

doing a “really great job” above market. “It’s that simple,” said Whitney. Equity was based on long-

term potential of employees and bonuses were based on performance. And Nimble’s compensation

was competitive at the 75 th

percentile.

The company also had an “extremely competitive” Employee Stock Purchase Plan (ESPP) where

people could allocate a portion of their net pay to purchase shares—discounted from their lowest price

over a 24-month “look-back” period “where the norm is for a 6-month look-back period,” according

to Whitney. “After we’ve spent all this time and effort in getting outstanding employees in the door, it

makes sense to invest in getting them to stay with the company for an extended period of time. We

want to give them lots of reasons to stay.”

When the company did make a hiring “mistake,” Mehta said that they were quick to let the employee

go and move on. “This is a way to maintain our culture too. I tell managers that it’s okay to make a

hiring mistake, but let’s not compound the problem by keeping the person on longer than we need to.”

Another change Nimble made based on employee surveys was the company’s PTO policy. Through

surveys, the team learned that Nimble’s benefits “suck,” said Whitney. “So we held focus groups and

learned that our PTO policy wasn’t ideal. We only had 15 days and it didn’t go up with length of

service and no one could take time off because people were so busy.” Whitney initially thought that

unlimited PTO time might be the solution so they tested that idea with a company-wide team and

“people hated that idea,” he said. Managers didn’t like it because they had to make judgments on

fairness when employees asked them for time off, and employees didn’t like it because they no longer

felt that they had a right to ask for PTO, feeling like they were asking for a favor.

Since Nimble’s field sales organization preferred unlimited PTO time and were flexible in their

schedules anyway, that was what they received. All other employees received 15 days of PTO and

unlimited sick leave with 100 percent salary for 90 days (that included maternity leave), and then

employees could go on long-term disability after that. The company also increased its holidays from

10 to 19 days and used those additional company holidays to fund two complete weeks of company

closure for the week of Christmas and the week of July 4 to encourage people to take time off together so when they returned, there would not be “tons of emails and catching up after a vacation,” said Rai.

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NIMBLE STORAGE 15

Wong said: “We really segmented our PTO policy by listening to employees and the program has

actually worked really well for everyone.”

Leadership Training (LEAD)

Because Nimble had ambitions to become a billion dollar company in a short period of time, Whitney

and his team knew that they needed a strong leadership talent pool across the organization. Wong

said: “A lot of other companies train their managers, but not a lot of companies our size are investing

so much in a leadership program. We want to train our managers on how to be a manager at

Nimble—how to embrace our values, culture, and Employee Charter that we would want every

manager to deliver to employees. Not only are we going to train our leaders, but also train them in the

Nimble way.”

Thomas said: “Again, we believe that the most important relationship is the one between the employee

and the manager. Everyone deserves a good manager and it takes work to be a great manager. If we

get that wrong, that’s on us—we didn’t make the employee successful enough or we didn’t provide

them with the resources or remove the roadblocks. Millennials get a bad rap for being entitled, but I

actually think they just have so much information and data and it’s our job as managers to help

develop them.”

The team came up with a leadership model (“what do great leaders do?”) based on focus groups and

leadership research. Then, the team convened key leaders (around 30 people) and presented the

leadership model, allowing the group to break off and work on the model further. “We got a whole

bunch of feedback from that leadership forum,” said Whitney. Out of that work, the team came up

with “Great leaders LEAD,” with LEAD meaning great leaders Leverage knowledge, Engage the

team, Advocate the culture, and Drive the results. The team then built a leadership development

program around those elements. “Once again, we’ve done this in a slightly different way compared to

others,” said Whitney. “We’ve taken a very different approach to how we view leadership

development based on how we engage with our people. We did a lot of back and forth getting

feedback about this program and we’re excited to roll this out.”

The LEAD program was a nine-month learning initiative with a built-in action-learning component,

culminating in a final presentation to senior management. The first part of the LEAD program taught

managers how to lead and was part of their core process training held in groups of 20 managers (that

launched in January 2015 with a total of 100 managers). The second part was an extended cohort-

based training that focused on how managers lead businesses. External experts and Nimble leaders

led these sessions. Action-learning projects focused on problems managers would typically face in

their next jobs. Topics included interviewing skills, recruiting, values, meeting management, effective

feedback, and more. “We’re doing all the things that a lot of companies take for granted,” said Singh.

“The mistake that a lot of companies make is to promote a great engineer to a manager, but assume

that this person would be a great manager. That’s not often the case. So part of the Employee Charter

is that we, the company, will equip you with the tools and invest in you.” Whitney said: “We’re

building the next set of leaders in this process.”

As leaders went through the program, the training was anchored in the realities they were actually

facing. “Rather than throw a bunch of disconnected courses at our leaders, we’re articulating the

journey of a manager. At the end, we hope we produce a manager who has real experience on how to

solve a problem and we’ve skilled them up so they can repeat that in the future,” said Whitney.

On training for employees, Nimble did not currently do much, but Prakash said this would be an area

of focus going forward. “The question is what type of training we want to do, should we do informal or formal classes, should we allow people to take classes outside.” Wong added: “The opportunities

to grow within Nimble are phenomenal, but I think we need to do a better job of communicating not

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NIMBLE STORAGE 16

only the vertical growth opportunities, but also horizontal learning opportunities. Since we’re so

small, we haven’t had a lot of time to make these decisions, but I’m sure we will, going forward.”

The Future

As Vasudevan and Whitney sat down in a conference room, they were excited to discuss Nimble’s

talent initiatives and plans for the future, including the newly launched LEAD program. They hoped

these could be catalysts for implementing Nimble’s growth ambitions, including targeting large global

enterprises.

Singh provided his thoughts on the future: “The biggest thing that keeps us up at night is execution.

So far, we have done everything we’ve said we would and more. The challenge is that we don’t want

to slip up on that execution. If we slipped, it would be a people issue. The product is sound, the go-

to-market strategy is sound, the financials are sound, but the people issue is the one that we worry

about. Eight hundred people doesn’t sound like a lot, but going from 100 to 800 in three years is a lot.

Hiring people and managing the transitions of people as they evolve are challenges in the context of

scaling. That’s the biggest challenge—to make sure this transition happens smoothly. We need to

have a mindset that the culture is flexible like a software model where you are always changing it and

adding something to it.”

Whitney reflected on the future: “If we’ve done all the right things in engaging and believing in our

workforce and we have an engaged team, we’ll be in a strong position to manage through crisis. The

one thing we cannot sacrifice at that time is our values. A strong value set is the foundation of how

we deal with times of adversity and times of prosperity. Focusing on the things we’re doing now is

setting us up for the good and bad times.”

As Vasudevan looked ahead, he worried most about future leaders: “We know there are two or three

people that won’t be the right people for their current roles going forward and it’s scary to think about

because we have worked so well together for so long and that is true for another level down too. If we

continue to grow, it’s going to require us to bring in outsiders and assimilate them.” On the business

side, he worried about the pace of growth in the context of flash: “If we don’t invest at an aggressive

pace, we run the risk of not winning the land grab soon enough, but we don’t want to grow so fast at

the cost of profitability. It’s a strategic growth versus profitability question. The issue is private

companies have access to capital unlike any other time in the last decade. Even now I don’t know if

I’m investing in growth fast enough. It’s almost like the dotcom boom again and we will only know if

we made the right choices in hindsight.”

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NIMBLE STORAGE 17

Exhibit 1 Financials

Year Ended January 31, Six Months Ended July 31, 2011 2012 2013 2012 2013 (in thousands, except per share data) Consolidated Statements of Operations Data:

Revenue:

Product $ 1,632 $ 13,113 $ 49,765 $ 17,731 $ 45,766

Support and service 49 900 4,075 1,378 4,836

Total revenue 1,681 14,013 53,840 19,109 50,602 Cost of revenue:

Product(1) 604 5,233 17,266 6,073 15,375

Support and service(1) 230 1,045 3,184 995 3,466

Total cost of revenue 834 6,278 20,450 7,068 18,841

Total gross profit 847 7,735 33,390 12,041 31,761 Operating expenses:

Research and development(1) 4,415 7,903 16,135 6,714 14,376

Sales and marketing(1) 2,934 12,863 39,851 13,868 31,428 General and administrative(1) 325 3,756 5,168 1,999 5,342

Total operating expenses 7,674 24,522 61,154 22,581 51,146

Loss from operations (6,827 ) (16,787 ) (27,764 ) (10,540 ) (19,385 ) Interest income 5 6 32 12 22 Other expense, net — (4 ) (26 ) (28 ) (295 )

Loss before provision for income taxes (6,822 ) (16,785 ) (27,758 ) (10,556 ) (19,658 ) Provision for income taxes — 5 99 12 176

Net loss (6,822 ) (16,790 ) (27,857 ) (10,568 ) (19,834 ) Accretion of redeemable convertible preferred stock (16 ) (23 ) (34 ) (14 ) (21 )

Net loss attributable to common stockholders $ (6,838 ) $ (16,813 ) $ (27,891 ) $ (10,582 ) $ (19,855 )

Net loss per share attributable to common stockholders, basic and

diluted $ (0.47 ) $ (1.04 ) $ (1.53 ) $ (0.60 ) $ (0.98 )

Weighted-average shares used to compute net loss per share

attributable to common stockholders, basic and diluted 14,457 16,226 18,236 17,546 20,172

Pro forma net loss per share attributable to common stockholders,

basic and diluted (unaudited)(2)

$ (0.51 )

$ (0.34 )

Weighted-average shares used to compute pro forma net loss per

share attributable to common stockholders, basic and diluted

(unaudited)(2)

54,887

59,040

Source: Nimble S-1.

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NIMBLE STORAGE 18

Exhibit 2 Metrics

Year Ended or as of January 31, or as of July 31,

2011 2012 2013 2012 2013 (dollars in thousands) Key Business Metrics:

Total revenue $ 1,681 $ 14,013 $ 53,840 $ 19,109 $ 50,602 Year-over-year percentage increase nm 734 % 284 % 337 % 165 % Gross margin 50.4 % 55.2 % 62.0 % 63.0 % 62.8 % Total deferred revenue(1) 227 2,028 10,896 4,972 19,931 Net cash used in operating activities (7,584 ) (14,841 ) (18,754 ) (9,741 ) (8,656 ) Non-GAAP Net Loss (6,718 ) (15,970 ) (25,253 ) (9,533 ) (17,052 ) Adjusted EBITDA (non-GAAP) (6,681 ) (15,802 ) (24,068 ) (9,187 ) (15,390 ) (1) Our deferred revenue consists of amounts that have been either invoiced or prepaid but have not yet been recognized as revenue as of the

period end. The majority of our deferred revenue consists of the unrecognized portion of revenue from sales of our support and service contracts. We monitor our deferred revenue balance because it represents a portion of revenue to be recognized in future periods.

Source: Nimble S-1.

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NIMBLE STORAGE 19

Exhibit 3 Nimble Storage Funding Rounds

$40.7M / Series E

Sep 10, 2012

Investors:

Wing Venture Capital

Accel Partners

ARTIS Ventures

Sequoia Capital

Lightspeed Venture Partners

GGV Capital

$25M / Series D

Jul 14, 2011

Investors:

Lightspeed Venture Partners

Sequoia Capital

ARTIS Ventures

Accel Partners

$16M / Series C

Dec 8, 2010

Investors:

Lightspeed Venture Partners

Accel Partners

Sequoia Capital

$8.3M / Series B

Dec 24, 2008

$8.8M / Series A

Dec 21, 2008

Source: Nimble Storage.

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NIMBLE STORAGE 20

Exhibit 4 Management Team Name Age Position Executive Officers:

Suresh Vasudevan 42 Chief Executive Officer and Director

Varun Mehta 51 Founder, Vice President of Engineering and Director Umesh Maheshwari 44 Founder, Chief Technology Officer Anup Singh 43 Chief Financial Officer Daniel Leary 45 Vice President of Marketing Michael Muñoz 46 Vice President of Sales

Non-Employee Directors:

Frank Calderoni(1)(2) 56 Director

James J. Goetz(2) 47 Director Jerry M. Kennelly*(1) 62 Director Ping Li(2)(3) 41 Director William J. Schroeder(1)(3) 69 Director

* Lead Independent Director. (1) Member of our audit committee. (2) Member of our compensation committee. (3) Member of our nominating and corporate governance committee.

Executive Officers Suresh Vasudevan has served as our Chief Executive Officer since March 2011 and as a director since

September 2009. From January 2009 to January 2011, Mr. Vasudevan was Chief Executive Officer of

Omneon Video Networks, Inc. (acquired by Harmonic Inc.), a provider of storage and networking

equipment for the broadcast industry. From February 1999 to December 2008, Mr. Vasudevan held

positions at NetApp, Inc., a provider of integrated data storage solutions, most recently as Senior Vice

President. Before joining NetApp, Mr. Vasudevan worked at the management consulting firm

McKinsey & Co. in New Delhi, Mumbai and Chicago as a senior engagement manager from April

1993 to January 1998. Mr. Vasudevan holds a Post Graduate Diploma in Management from the Indian

Institute of Management in Calcutta and a B.S. in Electrical Engineering from the Birla Institute of

Technology and Science in Pilani, India. Our board believes that Mr. Vasudevan’s management

experience and his data storage industry experience give him a breadth of knowledge and valuable

understanding of our industry, which qualify him to serve as our Chief Executive Officer and on our

board of directors.

Varun Mehta has served as our Vice President of Engineering since March 2011, was our founding

Chief Executive Officer from November 2007 to March 2011 and has served as a director since

November 2007. From March 2006 to April 2007, Mr. Mehta was Vice President of Engineering at

PeakStream, Inc., a developer of a software application platform for the high-performance computing

market, which was acquired in May 2007 by Google Inc., a provider of information technology

products and services. From November 2002 to February 2006, Mr. Mehta held positions at Data

Domain, Inc., a developer of de-duplication appliances for data backup systems and other storage

applications, most recently as Vice President of Engineering. Prior to that, Mr. Mehta held senior

management positions at FastForward Networks, Inc., a developer of multi-streaming media

technology; Panasas, Inc., a provider of network-attached storage technology; NetApp, Inc., a

provider of data storage solutions; and Sun Microsystems, Inc., a provider of computer hardware,

software and information technology services. Mr. Mehta holds an M.S. in computer engineering from

Rice University and an M.B.A. from the University of California, Berkeley. Our board believes that

Mr. Mehta’s management experience and his information technology and data storage industry

experience give him a breadth of knowledge and valuable understanding of our industry, which

qualify him to serve on our board of directors.

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NIMBLE STORAGE 21

Umesh Maheshwari has served as our Chief Technology Officer since November 2007 and was a founder of our company. From March 2003 to November 2007, he held positions at Data Domain,

most recently as Technical Director. From January 2001 to March 2003, Dr. Maheshwari held

positions at Zambeel, Inc., a maker of scalable file servers, most recently as Principal Engineer.

Dr. Maheshwari holds a Ph.D. in computer science from the Massachusetts Institute of Technology

and a B.Tech. in computer science from the Indian Institute of Technology Delhi.

Anup Singh has served as our Chief Financial Officer since November 2011. Previously, Mr. Singh

served as Chief Financial Officer at Clearwell Systems, Inc., a developer of an enterprise-class e-

discovery management platform, from September 2007 to July 2011. Prior to Clearwell, he held

leadership positions in finance at Asurion, LLC, Trimble Navigation Limited, At Home Corporation

(doing business as Excite@Home), 3Com Corporation and Ernst & Young LLP. Mr. Singh holds B.A.

and M.A. Honors degrees in Economics and Management Science from Cambridge University, where

he was a Cambridge Commonwealth Trust scholar, and is a Fellow of the Institute of Chartered

Accountants in England and Wales.

Daniel Leary has served as our Vice President of Marketing since May 2008. Previously, Mr. Leary

served as Vice President of Marketing at ConSentry Networks, Inc., a developer of hardware solutions

for local area network switching, and Vice President of Product Management at Peribit Networks,

Inc., a provider of network speed and performance solutions. Mr. Leary holds an M.S. in engineering-

economic systems from Stanford University and a B.S. in systems engineering from the University of

Virginia.

Michael Muñoz has served as our Vice President of Sales since March 2010. From July 2004 to February 2010, Mr. Muñoz held positions at Data Domain, most recently as Regional Vice President

of Sales. Mr. Muñoz holds a B.S. in business marketing and economics from California State

University, San Jose.

Source: Nimble S-1.

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NIMBLE STORAGE 22

Exhibit 5 Technology

Source: Nimble S-1.

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NIMBLE STORAGE 23

Exhibit 6 Technology

Source: Nimble S-1.

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NIMBLE STORAGE 24

Exhibit 7 Technology

Source: Nimble S-1.

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NIMBLE STORAGE 25

Exhibit 8 Technology

Our team of storage and software technology experts purpose-built our flash-optimized hybrid storage

platform to leverage the strengths of both flash and disk and to simplify business operations. We

believe our key technological differentiator is the software that underlies our disruptive CASL file

system and our cloud-based InfoSight service.

Cache Accelerated Sequential Layout (CASL) File System

CASL was specifically designed to work with commodity flash memory as well as dense, low

revolutions-per-minute, or RPM, HDDs. As a result, CASL allows our customers to achieve the

performance and capacity requirements of mainstream enterprise applications cost effectively.

The following graphic illustrates the key steps our CASL file system implements for data layouts.

The key attributes of CASL include:

Write-Optimized Data Layout. CASL delivers both fast random writes and high disk utilization by

grouping thousands of random I/O writes from applications into large stripes of data that are written

sequentially to low RPM disks. Since HDDs are significantly better at handling sequential I/O as

compared to random I/O, CASL can extract thousands of sustained write I/Os per second, or IOPS,

from a single 7,200 RPM HDD, whereas other storage architectures typically only achieve 50-75

IOPS. At the same time, the use of low-cost, low RPM HDDs enables us to deliver significantly

higher gigabytes per dollar than other storage architectures which use high RPM HDDs or enterprise

flash for storage capacity.

Always-on Inline Compression. CASL performs inline compression natively, using a variable-block

compression algorithm that allows users to store up to 75% more data per gigabyte with minimal

impact on performance or additional latency. Fixed sized blocks that are compressed become variable

sized depending on the compressibility of the underlying data. Traditional storage architectures utilize

a fixed-size block data layout that is incapable of natively storing variable blocks. As a result, they are

typically not able to compress data inline without experiencing performance degradation.

Dynamic Caching. CASL allows for significantly higher throughput and lower latency reads than

existing platforms. It leverages a large flash read cache based on commodity SSDs, while intelligently

managing the SSD’s performance and endurance, thereby avoiding premature wear of the SSDs. If

application patterns change, an intelligent block level index tracks and promotes active data, or data

that is being actively accessed, nearly instantaneously to flash. Compared to architectures that use

flash as a tier of data, CASL is significantly more cost-effective in its use of flash because it

compresses the data on flash, has been designed to use inexpensive consumer-grade SSDs and

eliminates the need for redundant provisioning for data protection. Finally, CASL is more responsive

to workload changes and can promote active data at levels as low as 4KB granularity within

milliseconds, as opposed to tiered approaches which must move data up and down in megabyte or

even gigabyte-sized chunks, often taking hours or days to rebalance tiers.

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NIMBLE STORAGE 26

Efficient, Instant Snapshots and Replication. CASL employs an efficient, reliable method for data

protection with instant point-in-time snapshots. CASL snapshots are space efficient because they

capture only changes in data down to 4KB granularity and reside on dense, low cost disk, further

reducing costs. Furthermore, CASL snapshots eliminate the need to copy data, allowing our systems

to store thousands of snapshots with minimal impact on performance. These characteristics allow our

customers to take frequent snapshots (hourly or even more often) and to retain those snapshots for

weeks to months, significantly reducing their dependence on traditional backups. In addition, our

space-efficient snapshots enable efficient replication to an offsite disaster recovery system, resulting in

reduced bandwidth costs and the deployment of a disaster recovery solution that is affordable and easy

to manage.

Scalability. Our platform enables efficient and non-disruptive scaling of both performance and

capacity, allowing our customers to increase performance or capacity incrementally, which generally

eliminates the need for large up-front investments. For increased performance, customers can upgrade

controllers for higher throughput and IOPS and upgrade SSDs to accommodate larger amounts of

active data. For increased capacity, customers can add additional expansion shelves of HDDs. Our

platform can also linearly scale both performance and capacity beyond a single system by combining

multiple systems into one centrally-managed scale-out storage cluster. We designed our systems so

that these upgrades can be done non-disruptively, generally without taking our systems out of service.

Source: Nimble S-1.

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NIMBLE STORAGE 27

Exhibit 9 Old Values

Source: Nimble Storage.

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NIMBLE STORAGE 28

Exhibit 10 Nimble Culture

Source: Nimble Storage.

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NIMBLE STORAGE 29

Exhibit 11 Values To Do’s and Don’ts

Source: Nimble Storage.

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NIMBLE STORAGE 30

Exhibit 12 Bringing the Culture to Life

Source: Nimble Storage.

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