>> Narrator: From Las Vegas, it's theCUBE. Covering IBM Think 2018. Brought to you by IBM. >> Welcome back to theCUBE. We are live on Day 1 at the inaugural IBM Think 2018 event in Las Vegas at the Mandalay Bay. I'm Lisa Martin with Dave Vellante. Welcoming back to theCUBE, a multiple type cube alumni, Matt Kalmenson, the vice president of sales portfolio and service providers at Veeam. Hey, Matt. >> Hello Lisa, nice to see you again. Dave, nice to see you. It's been a while. >> Yeah. And appreciate you having me back. >> Absolutely, we're in the middle of the Veeam sandwich, we just had Rick Vanover on about 20 minutes ago so-- >> That's a tough act to follow, but I'll do my best >> Not enough screen. >> That's true, that's true. So, IBM, Veeam, what is going on there from a cloud perspective, any news you want to share? >> There is so much going on there that I probably wouldn't know where to start. Now, I'll tell you we started the relationship with IBM and Veeam, from a cloud perspective for about a year or year and a half ago and last year we announced Veeam availability on the IBM cloud. And really, if you think about moving your virtual workloads to the cloud, Veeam in conjunction with IBM, specifically we started out on the VM we're a cloud foundation, which is called VCF. Giving the organizations the ability to move their virtual workloads from on-premise to into the cloud. And really we extended that by saying, "Hey, you're on this journey to the cloud, "let Veeam be the tool and the product "that helps you along that journey and streamline "the operations to move to the cloud." Now, that's where we started, but I have to tell you over the last couple of months, we have a lot of exciting things happen. Here at the show we're going to announce that we're also available for physical workloads. So, when you think about Veeam historically, people think about our virtual environments, right? But the reality is we've had major success with servers and workstations and the availability of servers and workstations and we're now making that available on the IPM platform as well. And, we're also working with the business resiliency team within IBM, so you can now purchase Veeam, it's a new offer that the Brazilian C team is bringing to market that allows you to have a full back up and managed service from the IBM GTS team where the business resiliency team resides. So, lots of really exciting things happening. >> So, let's start with the cloud piece, why Veeam and IBM cloud? What are the synergies there? What's so special about Veeam, and why is the fit so good? >> Yeah, that's a really good question and there's so many options out there. Lisa and I were talking before. We were kind prepping for the discussion here today and we're talking about the journey in the enterprise, and the journey, still has a long way to go. You'll hear different stats, but most of the stats reside around 15%. 15% of enterprises have started along this cloud journey in any kind of meaningful way. So, what does that mean? What we see all kind of statistics and what we see all kind of numbers and information about who's leading the battle and who's already won, it's far from over. Now, being in that position, we think we have a really unique value proposition combining Veeam with IBM. Number one, when you purchase Veeam on the IBM cloud, you get access to the entire Veeam portfolio. Okay? Now, when you take that portfolio when you make it available on the IBM cloud, IBM cloud is across some 50 some odd different data centers. Right? And across those different data centers, there's no charge for the bandwidth, so moving data from one data center to another data center is a really unique value proposition. So, on the one hand you take this organization that's had wild success in the data availability marketplace. And you give the access to IBM customers, so the whole portfolio and they have something in that portfolio that really differentiates them and that they don't charge for bandwidth, that means your economy is a scale greater, you've eliminated some of the economic barriers right at the gate, when you compare it to other cloud platforms that are out there. It gives you a lot of flexibility to move workloads and when you talk about back up and you talk about disaster recovery, which will all encompass within the business continuity or data availability story, moving workloads round is paramount. So, you take that combination of not having these extra charges, of having these unique value propositions from both organizations. And I believe it's just a phenomenal opportunity that we continue to build upon. >> There are many bandwidth charges can be some of the most expensive on the cloud bill, why is that Matt? Is it because IBM owns it's own infrastructure there? And so, it's a sunk cost, and passes that on to benefit on to it's customers? >> It really is one of the key differentiators. Some of IBM's clouds competitors who I won't mention, that's how they make their business. That's how they make their living. So, this is a literal sunk cost into the business that offers tremendous economic advantages to an IBM cloud over other clouds. >> And talk about the data movement, I mean a lot of people would say, I don't want to move my data because I don't want to pay the bandwidth cost, but as well, it's just moving a lot of data through a little pipe tank takes a long time. So, what are the use cases where you see people moving data, I mean obviously, offside data protection but what else? >> Yeah, so there's so many use cases, right? And when you think about the Veeam in particular, you could be talking about having Veeam as a part of a complete infrastructure as a service, right? So, you can come to the IBM cloud and purchase Veeam and have it as a part of the infrastructure service with your compute platform, your virtualized machine, your storage, and obviously, your back-up in data availability need will be protected. We can also work with customers that are just looking for a back-up as a service. So like we said, a lot of organizations have not made the journey to the cloud yet and they're just making this evolutionary journey, right? It's not something that happens overnight. So, they may still have traditional on prem uses of Veeam, but what do they want to do, they still need to move copies of their back up jobs offsite. They need to move them to another location and that goes back to what's called the 3-2-1 Work Rule. The 3-2-1 rule is having three copies of your data on two different media, with one of them being offsite. So, we give the ability just to use your on prem as part of a hybrid cloud solution moving just copies of your back-up jobs offsite too. In addition, we could talk about replication needs. Now, we have something called Veeam cloud connect back-up, which I've just talked about, follows the 3-2-1 Rule. But you can also replicate data from onsite to one of these cloud provider, cloud locations that we've discussed earlier. So there's lots of different use cases. >> With respect to IBM, what is the go to market strategy like for Veeam to go to market with IBM? Also, some of the things that you're announcing this week, what is that, how is that changing the game for Veeam going to market with your own sales organization? >> So, any time you're talking about service providers and cloud providers, it's really disruptive to what I would call the legacy organizations in the marketplace. It disrupts manufacturers, it disrupts resellers, it disrupts traditional sales teams. It gets complicated when you start talking about various commission plans. It really on the one hand have this mechanism that can bring so many advantages to the marketplace, but it can at the same time cause turmoil while under your own roof. At Veeam, I think we really done a nice job at cracking the code. So, while I represent the service provider business and the cloud provider business, I have peers across the country and across the globe, who would I call a lot more traditional, and user-facing sales people, all right? If you think multiple years back, what are they trying to do is have their customers consume Veeam as a license. And then after the license, they'll pay maintenance fees for perpetuity, hopefully. What we've decided is how do we put a plan in place, where our sales team can go after their end-users and their perspective end-users, and say to them how you consume is your business. What makes the most sense for you? Do you want to consume on-prem? Fantastic. Do you want to consume on-prem and make a copy of your back-up job and move it to the cloud? That's great too. Do you want to push all of the business and use IBM cloud as part of the infrastructure as a service but you won't own? Any of the Veeam technology on premises but IBM will own it and they'll provide it to you as a service? We have you covered there too. What we did was we came up with a compensation model internal that makes the cloud and service provider business in integral part of the go to market plan of our sales organization. So, we have compensation models that when an end-user's sales rep for like the better term is selling to their end customer, they can offer up consumption models that benefit the customer the best way and still get compensated at an even playing field. So, there's some mathematical equations behind the scene to make sure that we figured out how to compensate them and some operational tools we put in place, to make sure that they are compensated accordingly. And that really eliminates a lot of the friction between sales organizations. >> So, if an IBM cloud customer wants to buy back up as a service monthly, they can do that? They can pay, probably make them sign up for some period of time, is that right? So let's say it's an annual commitment or maybe it's a variety. >> We have various styles. Yes. >> Whatever it is, but, and I'm sure there's various incentives the longer you sign up, the cheaper it is per month. But they can consume monthly, pay monthly presumably or okay. And you guys work it out the back ends. >> Yes. >> You and IBM. >> Internally at Veeam, we worked it out so we could pay our sales teams, right? So, the IBM sales teams will continue to get paid based on consumption. >> Transparent to them? >> Transparent to them, that's the key. It's transparent to them. All they know is that they have an army of Veeam sales people that have vested interest to make their joint customers successful regardless of consumption models. >> Okay. And then, as it relates to the business resiliency team, that's some of them are different, well, could it involve cloud, obviously, but it's a different equation, right? So, you got IBM GTS guys in there maybe doing business impact analysis, do you guys participate in that or how does that relationship work? >> So, it's a very new relationship that we're all putting the foundational elements in place so that we would participate in those types of proofs of concepts and foundational elements where they make sense. And in those scenarios too, we do have programs and policies in place within Veeam to kind of mitigate, eliminate any friction between the sales organizations. >> Okay, go ahead. >> I was just going to say, in terms of with the cloud for a second, sounds like basically regardless of who's selling it, the end-user business, it's like a choose your own adventure, whatever is ideal and efficient for their business. Are you seeing any industries in particular that are sort of early adopters of what you guys are doing with IBM. You think of heavily regulated industries, financial services, healthcare, are you seeing any sort of leading industries there or is it sort of a horizontal challenge that-- >> Yeah, it's a really great question. When you think about the use cases for data availability, especially as it pertains to the cloud, back-up and disaster recovery are really one and two as far as cloud use cases. So, it's really universal. I would say I probably couldn't put my finger on one vertical market because they all have a need. Now, when you get into the highly regulated markets of healthcare and financial services, some of our cloud providers such as IBM, really has some unique expertise but everyone really needs the best solution for back-up and DR in the cloud. You know I can talk about some unique case studies like we have with Movius. Movius is an enterprise communications company, who happens to be here. And some of the Veeam's staff will be doing a session with the folks from Movius, talking about one Movius shows for their enterprise which has thousands of customers and really works with some of the largest telephony companies in the world. Why they chose the IBM cloud and why they chose IBM cloud with Veeam in particular? So, it crosses across all segments, really. >> Can you talk about the channel dynamic here? Basically, you think about the channel with cloud really started to take off, the message to the box or the box sounds we love you but, and was moving 90% of the market for a hardware and software but you could see that differentiation wasn't there. So, it was getting commoditized. You had to change, you had to add value somehow whether you're an SAP specialist, you're an Oracle specialist or VMware maybe an ISV and then you have who you service the cloud service providers, how is the channel adapted to all this? >> The channel is adapting and it's evolving rapidly. Just like any change in an ecosystem, some aren't going to be here in the years to come, if they don't evolve and adapt quick enough. What I'm really saying and what my team is saying is that a lot of our traditional channel partners are either teaming up with cloud providers, so IBM has a cloud provider program and a lot of the resellers we worked with they resell IBM cloud and Veeam on the IBM cloud. You have a lot of other channel partners that are really starting to develop their manage service practice. So, they'll put a wrapper around some of the cloud offerings and cloud services that are out there. That might be a multi-cloud environment which is inclusive of the IBM cloud, or might be a different scenario. But that's probably the fastest growing segment of the IT management spaces, really the service providers because they have to evolve and they have to adapt and a lot of them are trying to figure out what is their next play. How do they differentiate? Are they as expert in healthcare space? Are they an expert in the financial services space? But the first step is transitioning from that traditional, upfront cutbacks business model where they move in a box to building a revenue, recurring revenue based business model that offers cloud services and management of cloud services. >> How about the service providers? How do you see them differentiate? John and I had a big sort of debate this morning. AWS infrastructure service, how does IBM differentiate? Software was sort of my push. But how are you seeing the cloud service providers beyond the big three, four or five differentiating from the big whales? >> Every day, they're trying to figure out how to differentiate from the big whales. I mean that's part of what they get up every morning and when I go to sleep every night thinking about. So, sometimes they partner with the big whales, right? This is an island of technology so to speak. This is truly an ecosystem. Some of the best service providers within the ecosystem that I'm responsible for, offer phenomenal services to their customers. There are some workloads that they manage themselves. There are some workloads that they'll be the first to say you're better off being managed or run in a hyperscale type environment like in IBM cloud or in Azure or go in an AWS and they may provide some kind of management service. So, a lot of them do is again, they start to build these wraparound services, so that they can evolve. Because there is no one right answer and even within an organization there may not be one right answer because different workloads require different business, different clouds, different manage services. They need to be handled differently. If you have workloads that are very elastic, very spiky, so to speak, all right? Maybe it's an online application around the holiday season that's going to be hit hard and it's going to hit often but for a very short period of time perhaps that type of application you put up in the public cloud in a hyperscale or for again lack of the better term. There maybe kind of the old steady applications that the manage service provider might want to manage themselves, right? But, they will come in and they'll do the needs assessment. They'll evaluate the situation. They'll make the recommendation, and then they'll build their services around that recommendation. The beautiful thing about working with Veeam is that no matter what the answer is, we have the solution. >> So, VeeamON is coming up in May 14th to the 16th, theCUBE's going to be back there again. What are you excited about with the VeeamON 2018, maybe some customers that might be onstage sharing your stories? What can you share with us about what excites you about your big event? >> Sure, sure. When I think about VeeamON, what excites me? Now, this is a little bit personal cause I have to have responsibility for this team but for the last nine quarters, one of the fastest growing excitement of the Veeam business has been it's cloud business. We have grown over 50% year over year and that's a global number. So, while Veeam itself is having phenomenal growth, the marketplace in which we compete, growing 7% to 8% again depending on who you read. Veeam is a total 2016 to 2017 growing at 36%, our cloud business growing at over 50%, and helping that cloud become a part of everyone's story in everyone's business is really exciting to me. So, we'll have multiple service providers, multiple cloud providers up on stage doing case studies and testimonials, talking about how our mutual end-customers are benefited from the programs that we put in place to help everyone get better together. >> Yeah, I think the other thing, if I can interject. My takeaway from last year was you guys going hard. Everybody's going after multicloud, but your perspective on digital business and availability to support multiple clouds and you're building relationships with companies like IBM, and you got a good vision around that. So, I got to believe we're going to hear a lot about that as well. >> You sure will. (laughs) >> Well, sounds like a lot of momentum. Matt, thanks so much for stopping by theCUBE's sharing what's new, what excites you and the momentum that you guys are carrying forward. >> Thank you. >> Lisa: Pretty exciting stuff. >> Thank you for having me. I really appreciate it. It's great to be back and I'll look forward to speaking with you at VeeamON. >> Well, see you then. >> All right, see you then. >> We want to thank you for watching theCUBE live on day one of IBM Think 2018. I'm Lisa Martin for Dave Vellante. Check out Wikibon. Check out SiliconANGLE media for the latest news and analyst insights into all things cloud, AI, machine learning, watching et cetera. David and I are going to be right back with our next guest after a short break. We'll see you in just a few minutes. (upbeat music)

(techno music) >> Announcer: Live from New Orleans. It's the CUBE, covering VeeamON 2017 brought to you by themes. >> We're back, day two for the CUBE. We're here at VeeamON in New Orleans. The CUBE is the leader in live tech coverage and this is VeeamON 2017. A lot of cloud talk going on here. We're going to keep the cloud discussion going. Matt Kalmenson is here as the vice president of North American sales for cloud service providers. Great to see you Matt, thanks for coming on the CUBE. >> Thank you for having me and great to see you again as well. >> Yes, so I said a lot of talk on cloud. I mean you guys are really focused on that as sort of the next wave of innovation beyond virtualization. So give us the update from your perspective in terms of what you're seeing from your constituents. >> Yeah, absolutely. While today at the Veeam conference at VeeamON it was cloud day. We really like to say everyday is cloud day. >> Dave: Hear, hear. >> Yeah, exactly, and if you think about our business. It's going to continue to grow and it's going to continue to grow as the cloud grows, and as the leader for the Veeam Cloud and Service Provider business in North America. As our business grows, our service provider business is absolutely just going to grow in tandem with them. Everything we're doing is gearing up so that our service providers can be apart of our exponential growth. >> Could you just give us little color, those 18,000 service providers. Global reach, the breath and depth of the partners that you have. >> Absolutely when you think about the service provider community, it's really a broad topic. It's really a broad topic, meaning it's not just back up as a service. It's back up as a service. It could be disaster recovery as a service. There are those that provide complete infrastructure as a service and I can go on and on. Right that means talking about companies that are offering software as a service and how do they back up their customer's data. So again anything that's provided as a service really falls under our Veeam Cloud and Service Provider business. And if you think about the numbers that we've been talking about today in one of the keynote speeches we heard that IDC is saying that by 2020. So what's that's 2 1/2 years away, some 48% of all IT spend is going to be in the cloud. That's just tremendous opportunity. If you look at AWS, who last year I believe announced earning somewhere of around $10 billion. Just a handful of years ago that was close to zero and you see the exponential growth of Azure, and the reality is not any one cloud, even though we're seeing this exponential growth across all of these different platforms. There isn't any one cloud model or cloud provider that's going to be right for everybody. So that's when it comes back to 18,000 cloud providers across the globe that are offering various services to meet the demands of the marketplace, no matter what those demands might be. >> So interesting, what if we stand up for a minute. So not only is AWS growing, mediocre rates. 30%, 50% a year nor to 10 billion. But their operating profits are enormous. Their non-gap operating profits, depending on what quarter, is in their low 30s. When EMC was a public company, their operating profits were half that. So here's AWS extensively supposedly cutting prices, but their driving huge margins. So my question is when your customers see that, the cloud service providers that you're servicing. When they see that, how do they respond? Do they say okay, we're cool because we're differentiating. We got to keep ahead of the market. Have to stay ahead of AWS, do things differently. We heard some of the folks that you worked it, in the earliest day we focused on high touch service. Others focused on specialized DR, what are you hearing from that base? >> Just about anything and everything you can imagine. So it's a really great question 'cause when you think about the cloud very often we think about the change in technology. It's much more than just a change in technology. It's a change in the entire marketplace. This is a monumental shift in not only technology but in consumption models as well. And that consumption model changes all the way through the ecosystem and if you think about it. We have end consumers who are saying how do I consume technology today. Do I buy on prim, do I buy in the cloud? Is there a mix? Do I pay CapEx, do I pay OpEx? Then if you think about those that service that end user community. Resellers and the teams that I'm responsible for that are cloud service providers. They're offering some mix of those types of services. They sell on prim, they might sell in the cloud. They might sell on a hybrid cloud. So they're starting to see and then even us as a manufacturer. We start to see monumental shifts from, do we sell all on prim, all in the cloud or somewhere in between. So we're starting to see that it's really important that you understand what's the customer's consumption model. What's their business desire and then by default our service providers will either have the right model for them or our end customers will find other service providers that do. So what a lot of organizations are seeing today is as they transition a lot from on prim to this cloud model is a change in operating models completely to a monthly recurring revenue model. So when they see that model while they want to really accelerate that monthly recurring revenue model which will often increase margins over the long term. There still has to be that balance between providing exactly what that customer wants no matter where they are along that cloud journey. >> Yes so Pat Gelsinger famous CUBE quote is "If you don't ride the waves, "you're going to end up drift wood." And so in the last five years, a lot of the cloud service providers that you're working with have had to shift their business models. Find new ways of driving revenue and value, and one of those was creating these on going streams of revenue. >> Absolutely. >> How do you see, so I'm always fascinated by a company like Veeam, a software company that can help a cloud service provider essentially monetize their services and create these new ratable business models. How does Veeam do that? >> It's a great question and it's one of the great things about working at Veeam. I'm here representing the Veeam sales team for our cloud and service provider business. And I have a team behind me that supports our 18,000. I'm responsible for North America, so a subset of those 18,000. The reality is everybody in the organization is lined up to support and sell with or through those service providers. So I have the luxury of representing this vast community of Veeam cloud and service provider community. But the reality is we have compensation models in place that allow what I would consider my traditional sellers to receive the benefit if their customers decide to choose a cloud platform and buy through one of our service providers. They still get compensated. As a matter of fact they get compensated in a very rich manner. We have some incentive so that they can be agnostic when they go into a customer. We have the best solution in the industry. You consume any way you want. That's just one way, that doesn't even touch upon the marketing support that we give these organizations. >> How the heck do you support 18,000 partners like that? How do you give them, I mean everybody we've talked to is like, "Oh we love working with Veeam. They're unbelievable. How do you do it? How are you able to at that scale give that level of service? >> It's not any one group or any one that's really providing the focal point of that service, so we have lots of service providers that have very niche businesses. So they might be rather small organizations that we service through what we call our aggregation community. The Insights of the world, the Ingram Micros of the world. They service our providers. We also have extensive inside sales organizations that service our providers. On top of that we have field sales people that service our providers. But I also go back to not only do we have the sales team to back them up but we have this partner ecosystem, our aggregators and we also have rock solid technology, which a lot of times will make our jobs a little bit easier. Meaning if a customer, in this case a service provider can download a copy of our software and turn up a business. It takes a little bit of the burden of day to day management of working with that service provider. And it allows them to get to a revenue stream, time to value shorten and they become profitable quicker. Now again, it's not just my team. It's also our direct sales team who has benefits in seeing our service providers be successful so they're willing to chip in. Our channel community which I'm sure you know, many know it's a very extensive channel community. We have programs to tie together channel and VCS paving cloud service providers ecosystems. So then we leverage the whole channel team which also has a vested interest in the success. So I can't answer that question with one or two bullets. I look at it as product, dedicated teams, extended teams and compensation models which gives everyone the mindset. We have to make this work for our communities. >> Matt you've been a service provider yourself. >> Matt: I have. >> You worked at one before you joined Veeam. Wonder if you could give us a little bit of insights just the state of mind of service providers today. I think back, we know service providers have to keep cost tight because they need to pass that through to their customers. There's such a diverse ecosystem out there. There's big pressure from the public clouds. Where's state of mind with them? What are they excited about? What are they worried about? >> What are they excited about and what are they worried about? As was mentioned in Peter McKay's keynote here at VeeamON. It's the best of times, it's the worst of times. So what are they excited about? They're excited about everything. How can you talk about a marketplace like all cloud or 48% of IT budgets are going to be spent in the cloud. How could you not get excited about that if you're a cloud provider? If you look at Veeam's own growth in the cloud. 60% quarter on quarter comparative growth. Phenomenal growth and so those are things we're all excited about. You think about the announcements we heard today. We heard about the AWS announcement and some tighter integration what I would consider the hyper scale public clouds. Phenomenal things to always get excited about because those create opportunity. What are they concerned about? When we start to have more integration into public cloud offerings, some of the smaller service providers might really be thinking, "Well what does that mean to me?" What is the next revolution within this industry and is that going to leave me in the lurch? How do I compete with all these other service providers that are coming up market? And the way I like to really look at that and what we tend to do to put their mind at ease is remind them the best of times and the worst of times. What we have to do is stay ahead of the curve and one of the way we stay ahead of the curve is by making sure we understand there's always choice and that's the key. That there's always choice, meaning a service provider continues to evolve their business to make sure that they have some of their own cloud services, if that makes sense for them. They also can leverage and provide services on top of let's say an AWS or an Azure. So there's lots of flexibility and nimbleness in our program that no matter what our customers want or you as a service provider want to become. There's lots of different ways to skin the cat, for lack of a better way to put it. To take advantage of the best of times and hedge against what might be viewed as the worst of times. >> You've mentioned the public cloud and how that interaction fits. Definitely what we hear and was talked about this week a lot is that multi-cloud environment that customers have. Veeam's going to spend virtual and physical on premises to sass into public cloud. It felt a little hazy the last few years to try to get to that kind of hybrid multi-cloud. Do service providers feel they understand where they fit? Obviously there's the competitive dynamics but what services they offer. Things like Azure could be a natural extension for many pieces. Amazon might be a little bit more competitive for some but it's that give and take as opposed to it use to be. Dave give a Pat Gelsinger quote, there was the VMware quote like when the book seller wins, we all lose. Do they understand the competitive dynamics little more and willing to partner, understand what they do and what is some other services can fit? >> I firmly believe that the industry is maturing. Our service providers community is really maturing and they're learning how to build what I would call or what you may have heard as a coopetition type of environment. And they have to in order to survive and the reality is, I think back to the mainframe days when we use to read articles about the last mainframe being plugged by the year 2000. We all know that hasn't happened. Tremendous workloads being run on mainframes. You kind of look at it as similar dynamic. I'm not so sure we're ever going to go to an environment where everything's a hundred percent cloud but it probably be somewhere in the 33,33,33. 33% being on prim and staying on prim for various reasons. Maybe it's another third or somewhere in that ball park being in a complete public cloud, hyperscale public cloud because they need some flexibility and nimbleness that they might not get elsewhere. And then another third or somewhere in that ballpark staying in a fully managed cloud environment, because customers still want a very local field perhaps. Maybe they want somebody who can help them. Then they pick up the phone and they know their business intimately, and they're more of a hands-on type of environment. And I think as our business progresses, as the industry progresses becoming much more, much more collaborative. Realizing that some of the people I view as perhaps my biggest challengers can also be my biggest friends. >> So Matt it's definitely a decade of the cloud here. Last question, the bumper sticker on VeeamON 2017 for you. >> The bumper sticker for VeeamON 2017, great question. Would be the cloud is here and Veeam is ready to provide availability for the cloud, in any way, shape or form that it comes. >> Dave: Matt, thanks very much for coming on the CUBE. >> Thank you for having me. >> Good stuff, alright you're welcome. Alright, keep it right there buddy. We'll be back with our next guest. It's the CUBE, we're live from New Orleans. VeeamON 2017. (techno music) (typing and swirling sound)

>> Announcer: Live from Las Vegas, it's the Cube, covering InterConnect 2017, brought to you by IBM. >> Okay, welcome back everyone. We are live in Mandalay Bay in Las Vegas for Day Three coverage of IBM InterConnect 2017. This is the Cube's exclusive coverage of IBM's Cloud Show and their Watson Data, IoT and more. I'm John Furrier, my co-host Dave Vellante. Our next two guests are Matt Kalmenson, VP of North American Sales and Cloud Service Providers at Veeam and Andy Vandeveld, VP of Global Strategic Alliances at Veeam. Guys, welcome to the Cube. >> Andy: Thank you. >> Matt: Thank you for having us. >> Andy, I want you to just set the table. We are familiar with Veeam. We're going to do your event. You've got a big event coming up in New Orleans. The Cube will be there. We've been watching you guys for many, many years. The Cube is on its eighth season. I think Season One, 2010 at VMworld. You've been very, very successful. But you're not a public company, but yet you guys act like a public company. You release your revenue and earnings. Set the table about what Veeam is, where you guys are at, and the current status. >> Sure. We're a company that's been around for 10 years, founded by our founders, Andrei Baronov and Ratmir Timashev. The company has grown significantly in the data availability space over the 10 years. We just announced our earnings, or our revenue, for the first time just last quarter. Last year we did $607 million in total revenue. And that's at a 28% growth. So we're a very high-growth company, even though we're at significant run rate of revenue. We've got 2,500 employees worldwide. We'll grow that substantially this year. We've got 240,000 customers worldwide. We're growing 4,000 new customers a month. So we're really a growth company. But we're a privately-held company. We like it that way. It allows us to do things that public companies might not be able to do because of their quarterly reporting requirements. We can make investments where we think investments need to be made for the future, as opposed to having to always watch the profitability. >> Yeah, the 30-day shot clock, as they say, or the quarterly shot clock, 90-day shot clock I mean. So you guys are very successful. Congratulations. And that's, by the way, a great story that you guys kind of act like a public company without being public. So it's like the best of both worlds. You guys are doing well. Congratulations. What's the secret sauce for you guys? Just for the sound bite. We'll get into some of the questions. We have some specific questions about IBM InterConnect. But why is Veeam winning? What's happening? Because you guys are really moving the needle. Quickly explain the secret formula of why Veeam is so successful. >> Well, I think it cuts across a couple of different dimensions. One is, we have a really great culture within the company. And so we have a culture of innovation. People feel like they're invested in the success of the company. And everybody is joining in that. And I think that really helps. We have great technology. We used to have an "It Just Works" tagline. Customers love that, particularly when we talk about their backup and data-protection solutions. They don't want to have to have people monitoring it on a regular basis. It just works. So I think customers love the technology. We have a great employee base, great executive team, and we have great partnerships, like the one here with IBM. And I think those are all key to the success. >> So I want to go back a little bit and sort of set the table on some of the big mega-trends that led to Veeam's ascendancy. When you go back to the early days of virtualization, you had this situation where you had underutilized servers. And then VMware essentially allowed us to consolidate those servers and dramatically increase the utilization, 'cause applications running on these servers, the servers were highly underutilized. The one application that needed all that sort of dedicated server power was backup. So when virtualization went from nothing to whatever, 60, 70% of the market, backup got choked. And it needed an answer. And one of those answers was Veeam. And it shot up and exploded as a company. You've done very, very well. There's more to it than that, distribution channels and so forth. Now we enter the Cloud era. And people now talk beyond backup, about availability. So what can we learn from the virtualization era? What's similar, what's different now? And why is the discussion shifting from one of backup to one of sort of always-on availability? >> So, it's a really good question. And if you think about the trends that we've seen, we've gone through this trend to a completely virtualized world. Yet when we still talk to CIOs, and Veeam's gone out and done studies where we've talked to CIOs, and when we talk to them, we hear that they still have the same challenges that they've had in the past. And that is, over 90% of them are still saying that their most critical needs are application uptime and their access to data. So when we go out and talk to hundreds and thousands of CIOs, they say, "We still have these needs: "access to our applications and access to data." Yet when we talk to them about how those needs are being met, over 80% of them say there's this gap. There's this gap, and while they still have those needs, those needs are not being met. And we call that the availability gap. And Andy and I were talking this morning over a cup of coffee, and he said, "You know what the availability gap is? He said, "Think about it like this." Think about when you're using your cell phone, and that cell phone is going down to 10%, 9%, 8% and 1%. And you get that feeling inside that "I'm about to lose service." And we all know that feeling when you lose connectivity on your cell phone. Now think about that as the CIO or someone who's relying upon that data. That's the availability gap that we see in the marketplace. And that's the gap that Veeam bridges. We bridge that availability gap. So we've addressed that from a virtualization perspective and, now, moving into the physical world too. But now as we move forward, we're seeing another dynamic change in the marketplace, of course. And that's Cloud. Now consumers want to think about different ways to consume technology. They want it on-prem. They want a managed solution. They want in a public cloud. They want it in a private cloud. And the way Veeam addresses that solution is essentially by saying, "However you want to consume your technology, "that's okay by us." If you want to consume your virtualized environment and have it backed up on premises, fantastic. If you want it backed up and managed by a managed service provider, that's okay too. If you want to have that data and information and back it up in a public cloud, great. Or in a private cloud. Or move it between those environments. We'll have the solutions to meet those needs. So we're going to meet this need of having uptime of applications, uptime of data, and availability of data, minimizing that availability gap that these CIOs are facing and allow them to manage and run data and applications and have it available to them no matter what scenario or platform they're running it in. So that's a vision that's more than just selling backup insurance. >> Matt: Absolutely. >> I mean, you just kind of answered it, but I'll ask it generally. How do you guys communicate your vision to CIOs? >> Well, I think we communicate it just like Matt said. When you talk about backup, that is sort of a yesterday story. It's really about making sure that those customers can get access to their data and that they can keep their applications, and, frankly, their businesses up and running. So when we go in and have a conversation with a CIO, we can delineate for them the specific business impacts of not having a robust availability platform. And that takes on different dimensions from a product perspective. So it's not just backup and recovery anymore. It's backup and recovery, but it's availability. It's, how do you orchestrate data across platforms? These are the source of new issues that Veeam has been addressing for the past few years. And I think it's what gives us an advantage in the data protection space. >> Now, it's a very competitive market. A lot of legacy vendors, of which IBM is one of them. But yet you're here at InterConnect as a major IBM partner. Help us understand what the relationship is with IBM, where it fits in the organization. Is it just Cloud? Is it across the entire organization? Fill us in. >> Yeah, so it is a strategic partnership for us. It's not just a single business-unit partnership. We're across the business units inside of IBM. And sure, there's IBM Spectrum Protect, which is a competitive product. But there are so many more opportunities for Veeam and IBM to win together that we're not going to worry about the few areas where there's some overlap. We just announced a few months ago that we're integrating, doing snapshot integration, for IBM Storwize and SAN Volume Controller, which we'll provide in our next version, version 10. It's coming out later this year. And that's a big thing. We don't do storage integration, snapshot integration, with all storage vendors. So when we can make a commitment like that, it's a meaningful commitment to the partnership. And so we have this great relationship on the storage side and other parts, but the genesis of the partnership actually started in the Cloud area with Matt's team and some guys on Matt's team that really drove hard to get a foothold in the relationship. So I'll let Matt talk about the Cloud relationship. >> Thanks Andy, and it's been a great relationship, because, while Andy focuses on the global alliances, I have a little bit more of a narrow focus around the Cloud, which really isn't so narrow. So we tend to team up together very well. And what really got our relationship kicked off was having the VMware Cloud Foundation, which runs on the IBM Cloud, where Veeam is the essential backup product that runs the management components of that platform. So, anything on the VMware Cloud Foundation, which sits on the IBM Cloud platform, is backed up and managed by Veeam. So that's now available. And that was really the genesis of the relationship from a Cloud perspective, so that was very, very exciting. >> And Bluemix, they're in the mix? >> Bluemix is in the mix. And that VMware Cloud Foundation actually leverages the Bluemix platform. And then there's several layers of the Bluemix Cloud platform. And now we're going to be in the Bluemix catalog, what is called the IMS catalog, which will be for everyone who's looking to provision a cloud service, can go ahead and pull down and choose to provision VMware and some infrastructure and other services and have it backed up by Veeam. >> So that deal between IBM and VMware was a real catalyst for your relationship? >> Matt: A real catalyst for us. >> Now, of course, VMware's done other deals. They just did one with Amazon recently. But my understanding is the IBM relationship-- >> Well, Pat's been clear. It's a multi-cloud world. So the thing that's clear from this show is, multicloud is what's happening. So that's-- >> Well, what this has given us the ability to do is say, no matter what your customer looks like, there's an opportunity for us to partner and work together. So if you think about the VCF, the VMware Cloud Foundation, might be some organizations that are enterprise in scope, that have a large, on-premises type of deployment. So we're looking for large automation platforms that are looking to automate moving to the Cloud or maybe move back from the Cloud to on-prem, but nevertheless have these very high-end availability needs and business continuity needs. Now, if you think about the IMS platform in Bluemix, which might be a traditional hit-the-keyboard and looking for some infrastructure that you might spin up in a born-in-the-cloud company, from day one, we'll have some services available there for you as well. So you can go from a small SMB company that might be born in the Cloud to a legacy Fortune 100 company that has some kind of cloud foundation needs. And between the partnerships of our organizations we have solutions to meet those needs. >> One of the interesting things to me about Veeam is when you started out, when you were in your eating glass mode, you were going to VMUGs and doing all that sort of hard work with the hardcore VMware practitioners. Now you're on your way to a billion dollars. And you're striking partnerships with companies like IBM. How have the conversations changed in terms of who you sell to, who you're interacting with. Obviously more CIOs are probably paying attention to the investments that they're making. How has that changed? >> Well, just from the Veeam perspective, these partnerships are extremely important. Companies like IBM have relationships with enterprises that go back decades. And, for us, that's an opportunity for us to leverage their trusted advisor status with those decision makers in the enterprise. Our business started, and we have a very robust small and medium-size business. We have a strong and growing enterprise business. And we're looking for the enterprise as our growth vehicle to get to a billion dollars. So partnering with enterprise-class partners like IBM is really a key force. >> I mean, you guys can bring your value proposition pretty much to any environment. To your cell phone analogy about the battery power, which we've all seen. But, you know, Dave's on Verizon. I'm on AT&T. So this is the same dynamic in the Cloud. This is where you guys are looking for the growth. Am I getting that right? >> Yeah, I think that's a pretty good analogy. And the way I kind of think of it is, we have the best solutions in the marketplace for availability needs, regardless of the size of the organization, the end-user needs, regardless of the go-to-market strategy and regardless of the platform. So by building, and as we continue to move up market and aggressively build partnerships like the ones with IBM, it allows to address the business needs no matter what those business needs are. And partnerships like the ones with IBM allow us to scale to great lengths. >> Matt and Andy, I want to ask you a question for the folks watching, 'cause here at IBM InterConnect, the IBM relationship that you guys outlined, what's the major to-do for Veeam this year? I mean, in terms of, as you accelerate. You've got 600 million in revenue. What's the core message that you're sending the marketplace in terms of where that growth's going to come from? And what's the tag, what's the bumper sticker for Veeam right now? >> I think it's around the Cloud. I think that's an area where we're putting a heavy investment. We're hiring great people. And for us, we see that data protection is going to have to span the Cloud environment. Now, it's going to be on-prem, it's going to be in the Cloud, it's going to be a hybrid. But from our perspective >> Matt: It's everywhere. >> Yeah, becoming much more robust in the Cloud is really going to be a focus area for us this year. >> Yeah, I would agree. I would tack onto that continuing to scale into the enterprises very aggressively. We've built out a large enterprise organization strictly focused on the enterprise. We've had the technology to address the enterprise needs, but now we've dedicated sales teams and organizational structures just to address the enterprise. And continuing to bring out our Cloud sales organizations and make sure that everyone within our organizations also has a benefit by not only understanding the Cloud business, but our sales teams are compensated to sell Cloud solutions. So it's not like we have a stovepipe organization that just goes sell Cloud, and then somebody else who goes out and sells an on-prem solution. We have teams that are focused on compensation that works together so that our teams can go out and send the message of, "consumption's your decision". We want to help you make the right business decision. We want to help make the right technological decisions. But how you consume, that's up to you. And we're here to help you coach, here to help guide, here to help show some maps on how you can do that. We know we have the right availability solution no matter what needs or what consumption model of what path you want to go down. >> And the enterprise has certainly changed. And you guys understand the enterprise readiness. And you've got product leadership. So that seems to me to be the magic. >> And also the relationship with an organization like IBM because that helps us bridge those gaps. >> Well, congratulations guys, for great success and a good relationship with IBM. Great story. Love the story of being private with this kind of transparency. It's rare, and so congratulations Andy, Matt. >> Thank you. >> Thanks for joining the Cube. More live coverage. Stay with us all day, Day Three of exclusive coverage of IBM InterConnect 2017. I'm John Furrier with Dave Vellante. Stay with us. More after this short break.