>> Announcer: Live from San Francisco. Celebrating 10 years of high tech coverage, it's theCUBE. Covering VMWorld 2019, brought to you by VMware and it's ecosystem partners. >> Stu: Welcome back. I'm Stu Miniman, my co-host Justin Warren. And you are watching theCUBE. We have two sets, three days, here at VMWorld 2019. Our 10th year of the show. And happy to welcome back to our program, two of our theCUBE Alumni. We were at VeeamON earlier this year down in Miami, but sitting to my right is Ratmir Timashev, who is the co-founder and executive vice president of global sales and marketing with Veeam, and joining us also is Danny Allan, who's the vice president of product strategy also at Veeam. Thank you so much both for joining us. >> Thanks for having us Stu. >> Thank you. >> All right so, Ratmir, let's start. Veeam has been very transparent as to how the company is doing. You know, there's all this talks about unicorns and crazy evaluations or anything like that? But give us the update on, you know, actual dollars and actually what's happening in your business. >> Ratmir: Absolutely, we're always transparent. So actually, there's this term, unicorn, right? So does it mean one billion in valuation, or one billion in revenue (chuckles)? >> Stu: It is valuation. >> Yeah, I know that. So, Veeam is not unicorn anymore, right? Veeam is one billion in bookings. So, yeah, the major trend in the industry, is that we're moving from perpetual to subscription, because we're moving on-prem to hybrid cloud. And Veeam is actually leading that wave. So where we've been always known to be very customer friendly to do business with, easy to do business with, from the channel, from the customer perspective, and that's the major trend. If the customers are moving to hybrid cloud, we have to move to there, from our business model to a hybrid cloud. So we're changing our business model, to make it very easy for customers. >> Ratmir, that's not an easy adjustment. We've watched some public companies go through a little bit of challenges as you work through, you know there's the financial pieces, there's the sales pieces of that, since... Give us a little bit of the, how that works? You know, you just retrain the sales force and go or-- >> That is awesome, awesome question. That that is awesome point, that it's extremely painful. Extremely painful, and for some company, like everybody says Adobe is the best example of moving from perpetual or traditional business model to a subscription, right. So annual, even monthly subscription. For us it's even ten times more difficult than Adobe, because, we're not only moving from perpetual to subscription. We're moving, we're changing our licensing unit, per socket which is VMware traditional to pure VM or pure workload or pure instance, right. What we call instance, basically means, so it's extremely painful, we have to change how we do business, how we incentivize our sales people, how we incentivize our channel, how we incentivize our customers. But that's inevitable, we're moving to a hybrid cloud where sockets don't exist. Sockets, there are no sockets in the hybrid cloud. There are workloads and data. Data and applications. So we have to change our business model, but we also have to keep our current business model. And it's very difficult in terms of the bookings and revenue, when we give a customer an option to buy this way or that way. Of course they will choose the way that is the less expensive for them, and we're ready to do that. We can absorb that, because we're a private company, and we're approachable and we're fast growing. So we can afford that, unlike some of the public companies or companies that, venture capital finance. >> So how do you make that kind of substantial change to the... I mean changing half your company, really. To change that many structures. How do do you do that without losing the soul of the company? And like Veeam, Veeam is famous for being extremely Veeamy. How do you make all those sorts of changes and still not lose the soul of the company like that? How do you keep that there? >> That's an awesome question, because that's 50% of executive management discussions, are about that questions, right. What made Veeam successful? Core value, what we call, core values, there are family values, there are company core values every company has. So that's the most important. And one of them is, be extremely customer friendly, right. So easy to do business with. That's the number one priority. Revenue, projects, number two, number three, being doing the right things for the customer is number one. That's how we're discussing, and we're introducing a major change on October 1st. >> Ah yes. >> Another major change. We've done this major changes in the last two years, moving to subscription. So we started that move, two, two-and-a-half years ago, by introducing our product for Office 365, backup, when that was available only for, on subscription basis, not perpetual. So we're moving in subscription, to the subscription business model in the the last three years. On October 1st, 2019, in one month, we introducing another major change. We are extremely simplifying our subscription licensing and introducing, what we will call Veeam Universal License. Where you can buy once and move or close everywhere. From physical to VMware to Hyper-V to a double SS, ash or back to VMware and back to physical. I'm joking. (lauging) >> All right, Danny, bring us inside the product. We've watched the maturity, ten years of theCUBE here, Veeam was one of the early big ecosystems success stories, of course it went into Multi-Hypervisor, went into Multicloud. You know Ratmir, just went through all of the changes there. Exciting the VUL I guess we'll call it. >> Ratmir: VUL >> VUL, absolutely. So on the product piece, how's the product keeping in line with all these things. >> So our vision is to be the most trusted provider, backup solutions that enable high data management. So backup is still a core of it and it's the start of everything that we do. But if you look what we've done over the course of this year, it's very much about the cloud. So we added the ability, for example, to tier things into object storage in the hyperscale public cloud and that has been taking off, gang busters into S3 and into Azure Blob storage. And so that's a big part of it. Second part of it, in cloud data management is the ability to recover, if you're sending your data into the cloud, why not recover there? So we've added the ability to recover workloads in Azure, recover workloads in EC2. And lastly of course, once your workloads are in the cloud, then you want to protect it, using cloud-native technology. So we've addressed all of these solutions, and we've been announcing all these exciting things over the course of 2019. >> The product started off as being VM-centrical, VM Only back in the day. And then you've gradually added different capabilities to it as customers demanded, and it was on a pretty regular cadence as well. And you've recently added, added cloud functionality and backups there. What's the next thing, customers are asking for? 'Cause we've got lots of workloads being deployed in edge, we've got lots of people doing things with NoSQL backups, we've got Kubernetes, is mentioned every second breath at this show. So where are you seeing demand for customers that you need to take the product next? So we've heard a lot about Kubernetes obviously, the shows, the containers it's obviously a focus point. But one of the things we demoed yesterday. We actually had a breakout session, is leveraging an API from VMR called the VCR API for IO filtering. So it basically enables you to fork the rights when you're writing down to the storage level, so that you have continuous replication in two environments. And that just highlights the relationship we have with VMware. 80% of our customers are running on VMware. But that's the exciting things that we're innovating on. Things like making availability better. Making the agility and movement between clouds better. Making sure that people can take copies of their data to accelerate their business. These all areas that we are focusing on. >> Yeah, a lot of companies have tried to, multiple times have tried to go away from backup and go into data management. I like that you don't shy away from, ah, yeah we do backup and it's an important workload, and you're not afraid to mention that. Where's some other companies seem to be quite scared of saying, we do backup, 'cause it's not very cool or sexy. Although well, it doesn't have to be cool and sexy to be important. So I like that you actually say that yes we do backup. But we are also able to do some of these other bits and pieces. And it's enabled by that backup. So you know, copy, data management, so we can take copies of things and do this. Where is some of the demand coming around what to do with that data management side of things. I know there's, people are interested in things like, for example, data masking, where you want to take a copy of some data and use it for testing. There's a whole bunch of issue and risks around in doing that. So companies look for assistance from companies like Veeam to do that sort of thing. Is that where you're heading with some of that product? >> It is, there's four big use cases, DevOps is certainly one of them, and we've been talking about Kubernetes, right, which is all about developers and DevOps type development, so that's a big one. And one of the interesting things about that use case is, when you make copies of data, compliance comes into play. If you need to give a copy of the data to the developer, you don't want to give them credit card numbers or health information, so you probably want to mask that out. We have the capability today in Veeam, we call it, Staged Restore, that you could actually open the data in the sandbox to manipulate it, before you give it to the developer. But that's certainly one big use case, and it's highlighted at conferences like this. Another one is security, I spent a decade in security. I get passionate about it, but pentesting or forensics. If you do an invasive test on a production system, you'll bring the system down. And so another use case of the data is, take a copy, give it to the security team to do that test without impacting the production workload. A third one would be, IT operations, patching and updating all the systems. One of the interesting things about Veeam customers. They're far more likely to be on the most recent versions of software, because you can test it easily, by taking a copy. Test the patch, test the update and then roll it forward. And then a forth huge use case that we can not ignore is the GDPR in analytics and compliance. There's just this huge demand right now. And I think there's going to be market places opened in the public cloud, around delegating access to the data, so that they can analyze it and give you more intelligence about it. So GDPR is just a start, right. Were is my personally identifiable information? But I can imagine workload where a market place or an offering, where someone comes in and says, hey, I'll pay you some money and I'll classify your data for you, or I'll archive it smartly for you. And the business doesn't have to that. All they have to do is delegate access to the data, so that they can run some kind of machine learning algorithm on that data. So these are all interesting use cases. I go back, DevOps, security IT operations and analytics, all of those. >> So Ratmir, when I go to the keynote, it did feel like it was Kubernetes world? When I went down the show floor it definitely felt like data protection world. So it's definitely been one of the buzzier conversations the last couple of years at this show. But you look, walk through the floor, whether it be some of the big traditional vendors, lots of brand new start ups, some of the cloud-native players in this space. How do you make sure that Veeam gets the customers, keeps the customers that they have and can keep growing on the momentum that you've been building on? >> That's a great question, Stu. Like Pat Gelsinger mention that, number of applications has grown in the last five years, from 50 million to something like 330 million, and will grow to another almost 800 million in the next five years, by 2024. Veeam is in the right business, Veeam is the leader, Veeam is driving the vision and the strategy, right. Yeah, we have good competition in the form of legacy vendors and emerging vendors, but we have very good position because we own the major part of your hybrid cloud, which is the private cloud. And we're providing a good vision for how the hybrid cloud data management, not just data protection, which just Danny explained, should be done, right. I think we're in a good position and I feel very comfortable for the next five, ten years for Veeam. >> It's a good place to be. I mean feeling confident about the future is... I don't know five to ten years, that's a long way out. I don't know. >> Yeah I agree, I agree, it used to be like that, now you cannot predict more than six moths ahead, right. >> Justin I'm not going to ask him about Simon now, it's-- >> Six months is good yeah, six months maximum, what we can predict-- >> We were asking Michael Dell about the impact of China these days, so there's a lot of uncertainty in the world these day. >> Ratmir: Totally. >> Anything macro economic, you know that, you look at your global footprint. >> No we're traditional global technology company that generates most of the revenue between Europe and North America and we have emerging markets like Asia-Pac and Latin. We're no different than any other global technology company, in terms of the revenue and our investment. The fastest growing region of course is Asia-Pac, but our traditional markets is North America and Europe. >> Hailing from Asia-Pac, I do know the region reasonably well and Veeam is, yeah Veeam is definitely, has a very strong presence there and growing. Australia used to be there, one of our claims to fame, was one of the highest virtualized workload-- >> And Mohai is the cloud adapter. >> Cloud adoption. >> Yes, we like new shiny toys, so adopt it very, very quickly. Do you see any innovation coming out of Asia-Pac, because we use these things so much, and we tend to be on that leading edge. Do you see things coming out of the Asia-Pac teams that notice how customers are using these systems and is that placing demand on Veeam. >> Absolutely, but Danny knows better because he just came back from the Asia-Pacific trip. >> Justin: That's right, you did. >> Yeah, I did, I always say you live in the future, because you're so many hours ahead. But the reality is actually, the adoption of things like Hyper-convergence infrastructure, was far faster in areas like NZ, the adoption of the cloud. And it's because of New Zealand is part of the DAid, Australia is very much associated with taking that. One of the things that we're seeing there is consumption based model. I was just there a few weeks ago and the move to a consumption and subscription based model is far further advanced in other parts of the world. So I go there regularly, mostly because it gives me a good perspective on what the US is going to do two years later, And maybe AMEA three years later. It gives us a good perspective of where the industry is going-- >> It's not to the US it comes to California first then it spreads from there. (lauging) >> Are you saying he's literally using the technology of tomorrow in his today, is what we're saying. >> Maybe me I can make predictions a little bit further ahead there. >> Well you live in the future. >> All right I want to give you the both, just a final word here, VMWorld 2019. >> It's always the best show for us. VMWorld is the, I mean like Danny said, 80% of our customers is VMware, so it's always the best. We've been here for the last 12 years, since 2007. I have so many friends, buddies, love to come here, like to spend three, four days with my best friends, in the industry and just in life. >> I love the perspective here of the Multicloud worlds, so we saw some really interesting things, the moving things across clouds and leveraging Kubernetes and containers. And I think the focus on where the industry is going is very much aligned with Veeam. We also believe that, while it starts with backup up, the exciting thing is what's coming in two, three years. And so we have a close alignment, close relationship. It's been a great conference. >> Danny, Ratmir, thank you so much for the updates as always and yeah, have some fun with some of your friends, in the remaining time that we have. >> We have a party tonight Stu, so Justin too. >> Yeah, I think most people that have been to VMWorld are familiar with the Veeam party, it is famous, definitely. >> For Justin Warren, I'm Stu Miniman, we'll be back with more coverage here, from VMWorld 2019. Thanks for watching theCUBE. (electronic music)

>> Live from Miami Beach Florida, it's theCUBE. Covering VeeamON 2019. Brought to you by Veeam. >> Welcome back to Miami everybody, we're here at the Fontainebleau hotel. You're watching theCUBE, the leader of live tech coverage. This is day one of our coverage of VeeamON, the third year that we've covered Veeam, they've selected this great location here in Miami. I'm Dave Vellante, with my co-host Peter Burris. Ratmir Timashev is here, he is the co-founder and executive vice president, world-wide sales of Veeam, business guru, sales and marketing maven, a very successful entrepreneur, welcome to the theCUBE and thanks so much for having us. >> Thank you Dave, thank you Peter, thanks for having us. Thanks for doing this at our event. >> You're very welcome, so first of all congratulations, you hit that billion dollar milestone. You predicted it back in 2013, you missed it by about six months Ratmir, you know, (laughs) but really, great. Trailing 12 months, a billion dollars in revenue that includes of course your Ratable revenue, the subscription revenue, which who could have predicted that back in 2013, so amazing milestone, congratulations. And great venue here, you must be really pleased with the turnout, couple thousand people, your thoughts? >> Yeah absolutely, I personally love Miami, this is the best city. Always sunny, always ocean, always blue sky, awesome. And always sand, like that's the best place. So I've always had the dream to have VeeamON in Miami, so the dream comes true, we have over 2,000 people here and many more are watching livestream online. Very excited, very excited. >> Well, Veeam's always been a hip company, always a lot of fun, this is obviously a hip place, good fun part of the country. Let's talk about act one and act two. Act one was, you guys really rode the virtualization wave and you talked today about act two really being cloud and hybrid cloud data management. What are the similarities and the differences between act one and act two? >> So like we discussed during the keynote session, every 10 years or so there is a major industry transformation shift from one platform to another platform, so Veeamware 10 years ago created this technology visualization that dramatically fundamentally changed the way modern data centers are built and managed. And Veeam was very lucky to be at the earlier stage of that virtualization revolution that changed the whole data center. that changed the whole data center. So we were at the right time at the right place. We created the new market, Veeamware backup, and then we extended it to hyperV and HV. So we dominated that mode of data LAE share. But in the last few years we expanded our platform. So beyond just the virtualization, we added the physical support, the Unix support, the cloud support. So now Veeam represents broad, what we call Veeam Availability Platform that supports LAE clouds, virtual, physical clouds. That was act one, we dominated it. We grew from zero to 1 billion within 10, 12 years. We added 350,000 customers over that timeframe. And now it's act two, what is act two? Act two is the, again, the new major industry transformation to a hybrid cloud. What are the similarities? Again, Veeam is in a great position because we're at the right time at the right place with a brilliant product. We have the broad LAE system of our channel partners. We have a broad customer base, 350,000. And we have great technology partnerships with HP, Cisco, NetUP, Nutanix, Pure, and others, so as well as AWS, and Microsoft, and Google, and IBM cloud. So we are in extremely great position to dominate this second wave, what we call second act, which will be the next decade of hybrid cloud. >> Yeah, so optionality was a key, being able to support multiple use cases and supporting different environments. You're well positioned, you're saying, in act two. Act one you really didn't have a lot of competition, you kind of schooled the competition, I think Dell took out some of your early competition then you ran circles around everybody else. A lot more money pouring into this space now, you showed the slide, 15 billion, you've got a 15th of it. Tell us again why you feel like you can, you just used the word, dominate, with all this competition. You got the big guys now sort of learning from you and trying to copy some of your moves and maybe pre announcing some stuff to try and freeze the market. What gives you great confidence that you will dominate act two. >> Again, we have a history of innovation, so we know that there are new requirements for the hybrid cloud. People not only want to protect the data, they want to make sure that when they move to a hybrid cloud, when they put the workloads in a public cloud, that that data is protected, is secured and protected. So that's one capability that customers are looking for. Another capability, they want to be able to move the data back on-prem, or between the clouds, what we call cloud mobility, so they want to have this flexibility and freedom, be cloud agnostic or avoid that cloud lock-in. So they want to also make sure that from compliance standpoint, they are able to move the data if needed. In other use cases they want to leverage the cloud for different data protection capabilities. They want to leverage the cloud for backup, for disaster recovery as well as for long term retention, what we call cloud tier, so they want to, instead of tape, they want to replace tape with the public cloud low storage. So they want to use the cost and the skill ability of the public cloud for long term retentions. So all these use cases, extension of our platform. So we already have the, we own the one component of the hybrid cloud which is on-prem, modern data center, what some people call private cloud. We already own one component and we have 350,000 customers. Most of these customers are going to deploy hybrid cloud. In fact, according to our survey, 73% of our customers are deploying or planning to deploy a hybrid cloud. So most of them I think, in how to leverage the performance, the skill ability, and the elasticity, of the public cloud. So we own this component, we have the capabilities and we're developing product capabilities for the public cloud and with our orchestration on top of it and monitoring and analytics capabilities. So it's a complete solution. >> So Ratmir, I want to build upon this notion of act one and act two because good for you guys over ten years but the industry also is going through an act one to act two when you come right down to it. Where data, for the first four years of this industry, was about recording events that have happened. And now data going forward is becoming a strategic asset that's actually shaping the events that are happening or will happen. And it requires a new approach. It requires that data be regarded as a strategic asset and capabilities have to be established to support that data. I'm especially itched in with the introduction that you made because it suggests that you guys are going to look to an ecosystem to bring that degree of specialization and uniqueness and invention, on top of your platform, to serve a rapidly expanding range of strategic capability requirements when we think about data protection, data assurance. Do you see it the same way? >> Absolutely yeah, I 100% agree. I talked about that briefly during my keynote. We see that there are this four technology superpowers what Pat Galson from Veeamware calls technology superpowers. And those are the cloud, the mobile, artificial intelligence and age in internal things. So all this four technology superpowers. The biggest producers and consumers of the data. So it has to be both in the cloud and on the age so the new product and services are built on that data. Either we are talking about self driving cars, or we are talking about breakthrough in DNA research or cancer research. It's all built both in the cloud and on the age. And Veeam has this technology called data lapse. So when we've actually provide the access to the data, to a field party, either security or compliance or analytical tenders. So they can build more solutions on top of our data lapse. >> So talk a little bit about how you planned to deploy capital going forward, particularly as you try to leverage the opportunities in cloud two. You're seeing all kinds of new emerging technologies. We talk about coup berneties and containers all the time. You've made some acquisitions in the cloud area. Should we think about your emanate strategies as just sort of advancing your ability to either form ecosystems or actually bring in more cloud like capabilities, beyond act one into act two? >> Yeah I mean, first of all, we have a very powerful product and RNZ group. Partially we have this mentality not invented here so in other words we want to invent more in house. However, there are some cases where we need to extend our platform and we might not have the bandwidths or time through market so we're looking at some adjacent in the cloud management space, in the cloud optimization, course optimization, analytics. Those areas are very interesting for us to expand our platform to. >> I'm guessing that NIH mentality, acquisitions you make have to fit into that platform, that architecture. How do you evaluate? You say okay, can we do this ourselves? You say do we have the bandwidth? Is that technology here now? >> Does with Veeam help? >> Yeah with Veeam that's a great problem that we announced today as well. Yeah so the way we evaluate is that, is this adjacent market to what we're doing? For example, AWS or Asur, how close the buyer is. Or Office 365 backup we evolved in house. Or Office 365 backup we evolved in house. Azureware developed in house. Some technologies we are looking to acquire. The question is, is that the same buyer? If the buyer is the same, we prefer to develop in house. If the buyer, for now, is different, we would like to acquire the company and let it grow, and then merge into Veeam later. >> So your co founder runs RND correct? >> Correct >> And you run sales and marketing? So you guys fight over how you're going to allocate the dollars. But as a specialist in data protection, you're allocating all of your RND funding toward data protection. Presumably that helps you compete against the guys who are doing primary storage, secondary storage, all kinds of other software. So when you think about that road map, you told the story about how you got inspiration. You went to Silicon Valley and you were flying back and your partner said, well you know the best product just doesn't always win but you said, whoa so what, do we not invent the best products? You want to have the best products. Talk a little about that sort of organic development. How you guys think about that approach. Where the ideas come from. Is it obviously the customer input? Your knowledge of the space? Where do you see that going? >> So Veeam we believe is very different from other companies. First, we don't build long term road map because the technology is changing so fast that we want to keep that flexibility and agility to change our roadmap. We only disclose our release that we're imminent. Within the next six, nine months we already know. Beyond that, we don't provide the roadmap. We have the vision but we don't have the roadmap with the exact specific dates. >> But it's not a waterfall thinking. It's more agile applied to our-- >> Exactly, agile and flexibility that's what's, agility and flexibility that's what's most important. For example, a year ago or even two years ago when we announced version 10. We didn't know that object storage will become such a needed hot thing that all our customers are asking for. Including the on-prem object storage and the cloud object storage. So we changed our plans and we put lots of resources into object storage. And we finally released the best capability to use the object storage. We believe that object storage is the next cool thing in cloud data management because it will provide 10 times more capacity at the 10th of the course and 10 times faster performance. So it's like it's the next cool technology. That's just one example. Another thing is that, what differentiates Veeam in terms of RNZ and product strategy is that, if we release the feature, we don't do it as a marketing check box, we do cloud storage or we do object storage or we do this or we support Azure. When we design the feature, we think about is it going to be really really valuable? So that our customers, when they get it, they say wow, that's exactly what I needed. So we don't do as a marketing check box, we do provide and our customers really value that. They expect from Veeam that when Veeam releases something, it's going to be useful. >> And easy to use. >> Easy to use and very useful. >> That's important because when you're on offence, you don't have to do check box marketing. We know that a lot of times companies will do check box marketing 'cause they'll hear it in the field. The innovater has it, oh we have it too. And when you really peel the onion you see the differences and start to move forward. Okay so let's talk a little about customers. You had United Health on today. What are you hearing from customers? What are the customers saying that are inspiring you and your team? >> Today's conversations with the customers they start with the modernizing the, continue modernizing their data. A lot of customers still use the legacy backup solutions. They want to modernize. But the conversation quickly shifts to the hybrid cloud. How Veeam is going to help me not only modernize the backup data management on-prem, but how Veeam is going to help me to move to the cloud, manage the data, orchestrate the data movement in the cloud and maybe if needed, bring the data back for compliance reasons. So that conversation always occurs with any size companies. In fact, according to our survey, 73% of our customers say that they have a hybrid cloud strategy. Only 10% say no, we will always stay 100% on-prem. And about 15% say I will move everything to a public cloud. The huge majority is in the middle. 73% have the hybrid strategy. >> Yeah that sort of answers my next question but I'm going to ask it anyway. So an observer might well aren't the cloud guys just going to do their own backup and recovery. Why wouldn't that supplant Veeam? You sort of addressed it with the hybrid approach but I want to hear your answer. All the cloud guys have some form of replication or snapshotting, granted it's not as robust, you and I know that. But for the audience, explain to them why the cloud doesn't put you out of business. >> In fact cloud represents the biggest opportunity for the next 5-7-10 years. It's just historically, the platform vendors they don't provide the good tools, security tools or backup tools. We've been in this business over 25 years. Our first company was specialized in Windows Enterprise Management so we developed lots of tools around Microsoft platforms for managing active directory exchange server, share points, equal server. We always were afraid maybe Microsoft will come up with the similar solutions but they never did. The same is for today's world. Customers want to have the independence from the platform and the vendor, like AWS or Microsoft, they will never provide the capability to move the data outside of AWS. But for the true compliance security, a vendor like Veeam you need the capability not just backup AWS to AWS but you want to be able to backup AWS to on-prem and on-prem to AWS. Or AWS to Azure. So only Veeam can platform vendors, they are not looking to do that. So they want to move the data to the cloud. They're not necessarily providing more capabilities. Move the data outside of their cloud and that's where Veeam comes in, with the cloud mobility capabilities. >> One of the things that our researchers strongly pointed out, is that there are few places within a technology set of capabilities that they must control. And data protection is one of them. So they have to have an approach for managing data protection within their business that's their approach. And there are a few companies in a position to actually provide that. >> Yeah, I absolutely agree. Some customers they think that if I put the data into AWS or Azure or Office 365, Microsoft is going to protect it or AWS. No, it's your data, microsoft protects the infrastructure. So it's a off time service. That's where Microsoft or AWS are responsible. The data is yours. You are responsible for protecting the data recovery. If you delete an email, it's not Microsoft's fault. If you need to do an e-discovery on your email system, that's not Microsoft's problem. >> If you're out of compliance, Microsoft executives aren't going to jail. >> Exactly. That's your responsibility. Your data, Your responsibility. In fact we have a white paper that talks about the shared responsibility model. So there is a shared responsibility. AWS, public cloud providers, they're responsible to keep the service up and running. So therefore resilient infrastructure. Not the data, the data is yours. That sits on top of that resilient infrastructure. >> Yeah you've gone after Office 365 as the starting point for SaaS. Maybe there's other opportunities down the road. Right now it's probably a small market but I think it could emerge over time. But the overall time, you showed $15 billion. Today you have 1/15th of it. Lot more competition today. You see some of your competitors risk $250 million you have to one up them with a $500 million risk. You told me years ago Ratmir, we're probably not going to do an IPO. Give us an update there, same stance on that? >> No we've actually very open to the idea about IPO and we're exploring different opportunities. But we believe that we can continue growing organically because the company is very profitable. So we're reinvesting money into RNZ and we have good foundation for the next act two. But speaking about Office 365 by the way, it's the fastest growing product in the history of Veeam. >> Really? >> Of backup for Office 365 is the fastest growing because we have 350,000 customers, most of them are using Office 365 and they need to protect that data. So and they love Veeam, they are buying. But also we'll actually need new customers just buying Office 365. 23% of our customers for Office 365 are new customers. Also a little bit surprising for us. >> So O365 OneDrive is another opportunity that you guys have gone after. >> It's all part of the same product, yes. >> Salesforce maybe not quite there yet but you could potentially see that emerging as an opportunity? Do you see that? >> Yes we are looking at Salesforce. We are looking at G's width. We are looking at other SaaS applications that are popular among the business customers. >> One point really quickly Dave, is that 1/15th of that $15 billion TAM is just Veeam. Your ecosystem is increasingly going to use the Veeam services to expand the Veeam share of that, the virtual Veeam share of that, even as you grow. I think that's what's particularly interesting is how will that ecosystem add additional services on top of that, to grab more of that overall share. >> And I think, and please comment on that, that's unique to Veeam and the data protection space. You have your own events. You have premier partners that come in. Some of your competitors don't, they're not quite there yet. Some of the other larger competitors it's a small little piece of their whole business so the focus really is accentuated. >> Veeam has always had a channel part in ariant stretch. From day one we were 100% channel, 100%. We don't take the deal directly. Also, we build the broad service provider system network. So we have over 20,000 what we call Veeam cloud and service providers that provide the services to our customers based on Veeam platform backup in the cloud, disaster recovery, manage backup. Finally today we announce with Veeam that's another new initiative that we are expanding our ecosystem with Veeam APS where we want our partners, together with us, build this secondary storage systems that provide a single solution because some customers they want to buy in the form of the hardware appliance, our solution. So it's going to be pre installed, similar experience, out of the box functionality, easy to deploy, easy to manage with a single interphase. All provided and with a single support wise. So those systems will be created together with our partners. Like we announced one with Nutanix as well as with ExaGrid. We are working, Nutanix is one of the most innovative companies in our industry and we were very happy to partner with them because we believe that we will develop the right solution and we will be able to take this APS and offer our other partners to Build a secondary storage system, together with us. >> Well we've seen this little company, years ago, called Veeam, what a great name, superglue itself to the virtualization trend and really ride that wave now going onto act two, which is a cloud rapid timid shift. Thanks so much for coming to theCUBE. Great to see you again. >> Thank you Dave. >> Keep right there everybody. This is theCUBE, we're here at VeeamOn2019 in Miami. We'll be right back after this short break.

>> Announcer: Live from Chicago, Illinois. It's the Cube, covering Veeamon 2018. Brought to you by Veeam. >> Welcome back to Chicago everybody, this is the Cube, the leader in live tech coverage. My name is Dave Vellante, and I'm joined by my co-host Stewart Miniman, Ratmir Timashev is here, he's the cofounder of Veeam and in my opinion, the man who brought Veeam into the modern era, created the persona of Veeam, allowed it to punch above its way, Ratmir thanks for coming back in the Cube, great to see you again. >> Thank you Dave, thanks. >> So congratulations on another kickoff to another great event, you painted Chicago green. Love it, first of all how do you feel. >> Fantastic, awesome. It's great being here, great city, the weather is finally nice, so spring is here finally, so we are great time. >> Yeah we had a little trouble getting in, but everybody's here, everybody's here safely which is the most important thing. I want you to talk about the evolution of Veeam, you started out as a virtualization specialist, generally VMware specialists, especially focusing on small business. We used to see you everywhere, now you're extending into the enterprise. What's that all about, what's the vision, give us your perspective. >> You're absolutely right, Veeam started with the single focus to be the best for VMware, for VMware, data protection, cap replication, and we started as the easy to use, simple, powerful solution for SMB, moved into mid-enterprise and now we added lots of enterprise features, and moving into the large enterprise. And last year was really the most important and most successful year, 2017, in the history of Veeam, so we finally admitted that we'd be lying to our customers for 10 years. >> Dave: You've been lying? >> Yeah, we've been lying. >> What do you mean by that. >> For 10 years we've been saying, Veeam is VMware only, Veeam is high B only, we will never do physical. So last year we introduced the comprehensive M2M platform to do everything, virtual, physical, and cloud. So we integrated our agent-based technology into our flagship product, to provide a single panel blast to manage all your data across the cloud, M2M. >> Why lie for a decade? >> That's a good question. You know, when you deal with sales people, smart sales people, they constantly ask you, hey, when I will do that, I will go and do physical, I was going to do physical. You have to tell them no, never, because once you say yeah, we will do physical, the next question is when. >> Dave: Yeah, when can I sell it, right. >> So we don't want to give our sales people an excuse to lose a deal because we've got the best virtual, go and sell the best virtual, and make our customers happy. >> You don't want to head fake the customers either. >> Maybe explain, what were the core principles back from the early days that are still holding true, what is the same and what's different now that you're doing cloud and virtual. >> Again, the core principle. >> Stu: Or physical, I should say. >> For principle, again, in terms of the product design, think customer first, make it easy for the customer and really stick to your core customer, that customer that is using your product every day. So make it easy, powerful, and affordable. That was our core principles in designing the product, and the whole business model behind Veeam. >> Talk about the metrics a little bit. Stu and I were talking at the open, 820 some odd million in booking, so you can see a billion dollars. We said, software companies that are a billion dollars are few and far between so that's a huge milestone if and when you hit that. But talk about that and the growth, share with us whatever metrics you can. >> Again, 2017 was one of the most successful years in our history, yeah, like you mention, we recorded bookings revenue of 830 million and that was 36% growth. Actually, our growth is accelerating as we become bigger. So we just celebrated 300,000 customers, we are adding 4,000 new customers every day, and Peter Mackay, our president and co COO mentioned this morning at the keynote, that we're adding 133 customers every single day, so that's very impressive. >> Yeah, it's awesome. So yeah, just to give you a sense, 300,000 customers, VMware, who basically owns the enterprise, says slightly over half a million customers. >> So we probably are on 50% of VMware, so we own 50% of VMware market in terms of data protection. >> So one of the challenges that we mentioned upfront was okay, so you drove a truck through the opportunity when virtualization VMware came in, and a lot of the incumbents were caught flat footed. They didn't have the architecture, they didn't have the go to market, et. Cetera. Now things are changing, moving to cloud, moving to this digital world, how does Veeam retain its edge in that new world. >> That's an excellent question, so that's the big opportunities that we see for the next five years. So we won the first battle, the battle of on pram, highly virtualized modern data center. We are the leader, we are number one data protection and ideal ability for that market, right. So the next battle, the next opportunity that we see for the next five years is to dominate the, what we call intelligent data management market in the multi cloud world. So we have to think how we approach that, once you win the market, like there is a saying, the winner takes it all. Once you win the market, you are going to dominate that, so for us the next two or three years are the most critical in dominating this multi cloud world for the next decade. >> Ratmir, I'd love to hear, you wrote that virtualization wave, which really was about creating virtualization admin, huge shift going from silos to admins. And we're seeing that change from architects in the cloud and the like, talk to, who you're selling to, and the partners that you have to grow. There's just so much change happening in that kind of environment. >> Yeah we see the change as we are moving from VMware administrator, so originally the product was designed for VMware administrator, now we are moving to the infrastructure person that is responsible not just for private part of your infrastructure, but for the multi cloud strategy, which includes the public cloud, SAS, physical servers, everything than an enterprise has as far as the infrastructure. >> Okay, so I want to go through just a couple of things that we talked about earlier and get your reaction to this. So some of the things that we've seen in our research is that data protection and orchestration are becoming much much more important in the list of CXO concerns. And that's something that your messaging is going after. But there's a dissonance between the business expects out of data protection and what IT is actually delivering, and I wonder if you can comment on that. >> Sure, so yeah, we are introducing our new message. So our previous message was focused on VMware administrator, now we are moving into the enterprise, and our message is about the importance of data. We see the three characteristics of the modern data, hyper critical, hyper sprawled, and hyper growth. So this leads to the need of creating a new type of solution what we call is intelligent data management solution. To manage the hyper available enterprise. So we're using the word hyper a lot because the data is now hyper critical, it's over distributed, hyper distributed, and is growing exponentially. That's part of our new message, that as we go into the C level people, about how important this data, and what with all the things that going on, in terms of the security compliance and how we're going to extend this platform to solve other business issues and provide more value and more business outcomes of using your late. Veeam's emporium has grown within this enterprise customers. However, as we mentioned, we are moving further, we are not standing still, so we have added lots of capabilities in terms of protecting cloud, native cloud, AWS, Azure, as well as a physical servers. So we are moving more into the end to end strategic data management platform provider from being just a niche point solution. >> I want to give you another stat that came out of our research, which I think you'll love, is that our David Foyer calculated that on average, a Fortune 1000 company over I think a three or a four year period, loses about a billion and a half dollars in value because of poorly architected data protection approaches, whether it's they're not end to end, or they're not protecting their cloud data properly, or they're not doing, whether it's backup or disaster recovery properly, well over a billion dollars over a four year period, your thoughts. >> Yeah, that's similar to what our research shows as well. So we do annual research and ask all customers how much down time and data loss costs them annually or through hour, that research shows that average enterprise can lose as much as over 10 million dollars per hour, so if you add it up over four years, that might be close to that number. But with all the compliance and the new security risks and security threat, and reason where this is becoming more and more of a critical business critical problem to solve. >> So this is a huge opportunity for Veeam, because when you think about your total available market, what a lot of time analysts will do is they'll add up all the spending on let's say data protection solutions, but to me your tam is actually quite a bit larger because of this lost revenue opportunity. It's many tens of billions, maybe 30 to 50 billion, I don't know if you have any thoughts on that. >> Yeah definitely, so data protection is just part of that core market right, so that data management is much bigger, by data management we mean not just the protection of data, but using this data to help businesses, to accelerate the innovation rate, so to reduce risk, to comply with the new regulations. So all these challenges are much bigger part of not just the data backup and recovery, overall data management market which is much bigger and probably is larger than 20, 30 billion range. >> So okay, so you have 2,500, 3,000 of your favorite people here gathered this week. As always I expect that you're going to have a big sendoff, a big party, what can we expect this week. >> As always, that's part of the Veeam culture, is work hard, play hard, and so Veeam is known for having the best parties. Yeah we, now Peter runs the company day to day, but culturally we still remain young entrepreneurial spirited company right, so we like party and we like to work hard. >> Well you know, if you've never been to a Veeam party, you're missing it. I don't usually stay for these things, I get out of here, we have to do so many Cubes, but we'll be at the Veeam party this week. >> Awesome, awesome. >> Thanks very much, always a pleasure seeing you, and congratulations on all your success. >> Thank you very much. >> Alright you're welcome. Keep it right there everybody, we'll be back with our next guest, you're watching the Cube from Veeamon 2018. We're in the Windy City and we'll be right back.

>> Voiceover: Live from New Orleans, it's The Cube. Covering VeeamOn 2017. Brought to you by Veeam. (funky electronic theme music) >> Welcome back to New Orleans everybody. This is the Cube, the leader in live tech coverage. We go out to the events, we extract a signal from the noise. My name is Dave Vellante and I'm here with Stu Miniman. Ratmir Timashev is here, he's the co-founder of Veeam and he's joined by Peter McKay who's the co-CEO and president. Gentleman, good to see you. >> Good to see you. >> Welcome to the Cube, congratulations on the great keynote this morning. >> Great to see you, Dave. >> Seemed like you guys were having fun out there. >> Yeah it is, it's a lot of fun, it's a great, great time. >> So Ratmir, I want to start with you. A lot of people in our audience may not be familiar with Veeam. We've been sort of sharing with them, the rapid ascendancy of the company. But come, go back ten years, why did you start, you and your co-founder, start the company? >> Yeah, the company's ten years old. Last year we celebrated ten years, it was started in 2006 by me and my partner who is the technology side. He's my technology genius. I'm on the sales and marketing. So we started the company with the simple idea to build the new version, or new generation data protection for virtualized environments. VMware was getting hot back in 2005, 2006, 2007. It kept more and more penetration within enterprise. Back then the cloud was like, 10 or 20 percent penetrated, but we saw that, it's going to be 90 eventually, so we wanted to ride this big wave, technology revolution wave. And now I think we, looking back ten years I think we're in a very similar spot with the cloud. Cloud is where visualization was 10 years ago so and we want to ride this new wave or the cloud wave the same way exactly that we rode the VM wave, visualization and hyper-V wave. >> You know that's interesting, I was explaining to the audience this morning that your ascendancy coincided with Vmware and what happened was we consolidated resources and the one resource that was so precious was for backup and everybody had to re architect their backup and you guys were the, were an answer and obviously one of the more popular answers. Now we're into this cloud era and you see a similar opportunity, you're messaging sort of focuses on that and there's an emergent strategy that you're >> Yeah. >> putting forth. >> I mean I think everybody is moving into a multi cloud environment, right? Where there's going to be, their data's going to be all over the place, they're going to be on premise or manage service providers or in AWS or Azure and so and for us we need to be able to make it available and always on and so that's our focus is to make it very easy for our customers to store their data and run their applications and always be available no matter what the environment is. On premise, off, no matter what the infrastructure is. >> So we talk about digital transformation a lot on The Cube, every event we go to, it's digital transformation, you guys had a little bit different spin on that, digital life, always on, availability, capabilities. You're having fun with green. (laughs) >> Ratmir: Yeah. >> Peter: Oh yeah. >> Green is, >> We always have fun with green. >> Green is go. >> As you can tell. >> A lot of things you can do with green is go, color of money >> Celtics, right? Boston Celtics. >> Boston Celtics. Number one pick. >> Veeam green team. Veeam green machine. >> Veeam green machine, love it. So give us your perspective on this whole digital life. What is that all about? >> Yeah so our message in the last 10 years has evolved. Originally when we started our message was very simple. We're number one VMware backup. That message really resonated and we did deliver on the purpose of number one VMware backup. I remember first time when we introduce that concept, our competitors look at us like who knows them? But then we did in fact become the number one VMware backup, so And our message has evolved over time so from technical message to, that is focused on our core customer which is IT prone. The person that really understands the modern technologies, responsible for the modern data center. Understands the modern storage cloud technologies and visualization technologies. But that message has evolved as we are growing, becoming bigger, and we're going more into a enterprise so now solution become bigger and broader. That covers cloud. So we had to evolve our message so right now our message is, has become more consumer centric, more emotional, touching our digital life. Because we believe that that's at the end of the day, that's what we do. We enable our customers, our businesses to provide this seamless digital life experience for their users. That's what we do. >> So I love it when a successful company brings in a new leader. Because as opposed to things are bad and they have to make a change, we saw this last week, I mentioned I was at ServiceNow Knowledge, Frank Slootman, incredibly successful CEO, stepped aside, brought in a new, and part of that transition was about reaching a new constituency, so my question to you, Peter, is traditionally the Veeam audience is hardcore operational people. Your messaging is much higher level in the organization so how are you dealing with that sort of bifurcated personas, who are you targeting in this sort of new messaging? >> So as the, in the early days of Veeam it started in kind of that SMB market and kind of expanded into commercial and now very focused on the enterprise and so a lot of the enterprise are kind of working through this transition. The digital life and the new, staying relevant to the new users that are coming online and so we've found that our message needed to evolve as well and it needs to be, lines in business now are getting more involved in some of the decision making so our message wasn't where it needed to be in terms of evolving it for that enterprise customer and one that we think will foster that digital transformation for a lot of our companies customers and so we view this was the right time, especially with version 10, version 9.5 which was very successful and version 10 which really expands our enterprise capability but also we needed to, it broadens a lot of the applications down to things that we could do in an enterprise and we needed that message to also be kind of that enterprise in a broad strategic message. >> Peter, when I talk to customers these days, it's a very fragmented market out there, I think, as Ratmir said you rode that VMware wave, now customers adopting lots of sass, they're doing multiple public clouds, they're trying to figure out how they modernize their private cloud. Before it was VMware, therefore I need backup. Now it's how much does their choice on where they put their data and their application drive to you, how much do you have kind of the brand Veeam out there to kind of pull into those other environments and do customers turn to you for help in sorting out that kind of multi cloud world? >> Yeah actually I was talking to a friend of mine who is a key analyst at ESG, Jason Buffington, you know Jason. >> Yeah he's coming on. >> He had a great point about the industry, that our data industry or storage industry or data protection industry, he said that every new wave you go from mainframe to client server, from client server to visualization, from visualization to cloud. There is always a new backup leader. Because the technology changes so much and the people or the company that doesn't have this old baggage with the old technology, old agent based or supporting all these legacy platforms, that can move much faster and that's what Veeam has demonstrated with visualization. The only exception is the transition from visualization to cloud because cloud is based on visualization. So and based on the concept of the data mobility, and that's, from the mental concept to visualization and so we believe that we are very well set with our leadership position in visualization to also dominate cloud market because our technologies are modern technologies specifically built for visualization and cloud. >> And is the argument then that an Amazon or an Azure won't dominate that, because essentially they are a cloud stovepipe, is that right, can you expand on that a little bit? >> That's the way we look at it, I mean it's choice. People want to put, they should be able to put their data wherever they want or their applications, and we should make it very easy for them to do that. If they want to do an Azure, but it's not only just putting it in Azure, it's being able to get after it, get it and move it and transfer data no matter where wanted to so for us it's about providing the flexibility to move the data or run the apps no matter where you want at any time. >> Peter you ran a company that Vmware acquired that was an Azure service. Veeam has some Azure service solutions, customers often times are trying to switch from there's no more shrink wrap software anymore, models for buying it, where do you see customers in that adoption? Curious of your old role and kind of today what you're seeing. >> It's interesting, so Desktone was very much of a platform for managed service providers and cloud providers and so in coming to Veeam, a big part of our business, which is very different than I think a lot of the other people in the market is focusing on those cloud providers. Not just Amazon, Azure, the public, but also we have 15, over 15,000 managed service providers and cloud providers that run our platform as a business. And so when we rolled out a number of features here that if, unless you were a managed service provider or a cloud provider, you wouldn't get the multi-tenancy and the things that we built on scalability that are really changing the game we believe for the managed service providers. But it's also, what we saw at Desktone that went into Veeam. It's, our customers are also doing it as a service within their organization. Things like multi-tenancy are things that they need and scalability are things that they need as a business, so it's a lot of similarities between the world that I lived in and Desktone and VMware to where we are today. >> One of the impressive stats, you said 2016, 231,000 customers that you have. Are all of those paying customers, you have the free version, can you give us any insight as to how many pay versus free >> It's actually over 245,000, that was at the end of the year, so we're adding 4,000 new customers every month and those are all paid. We don't count the people who downloaded the free version of it. >> That's good to know, you could have millions of >> We have millions so far our other free products, yes. >> Awesome. >> Millions of users. >> That's important. >> And another stat you put out in the keynote was an NPS of 73 which is really, really good. Can we talk about that a little bit? Ratmir you were making the point off camera that it rose from the low 60s. What's going on there? >> Yeah so last year it was 61, the year before it was 62, so we were kind of very high but flat, so and this year it actually jumped to 73 and the reason that I personally contribute that to is because we had extremely powerful release 9.5 and customer are extremely happy with the improvements, and the easy of operate and using all these new capabilities, it was the most, the smoothest upgrade, the smoothest release and with the powerful features. The second reason I think our NPS, net promoter score, rose that much is because Peter came on board. (laughs) So in the last 10 month, Peter really, really strengthen our team. I thought that we are moving very fast but now, so we have the concept of Veeam speed, that means moving really fast but now we, actually with Peter we are moving 10 times faster, all of magnitude faster. >> I don't believe it's me but I think what Veeam has always done is done a really good job of listening to our customers and communicating with our customers on a regular basis. We built at a customer success business, part of our business that we're investing in, but we have a whole, a team of people who just solicit and communicate with our partners, and our customers on a regular basis, so they know what we're doing, it's rare that they don't really get a good sense of where we're going and the vision and strategy of Veeam so I think that goes a long way in driving our NPS score. >> We got to break but last thing we really haven't double clicked on is the ecosystem, maybe a quick word on that and then we'll wrap. >> That's a big, obviously, a partner community, we have 45,000 partners, we have 15, over 15,000 managed service providers in cloud. Probably the area that is impacting our business quite a bit now recently is a lot of the alliance partnerships that have. Today we have Veeamware, we have Cisco, very strong and successful, we announced HPE which not only is a development partnership but also a resell partnership and go to market which is dramatically impacing >> Former competitor. >> Yes yes which has opened up a tremendous amount of opportunities for us so we're going to continue to expand into other companies, we're, because 50% of this market is changing over in 2017 and 18, from legacy solutions to new, in the hardware is a piece of that and we're trying to embed as much of that into one sales motion, one bundle for our customers, making it easy to try and buy Veeam. >> Okay, founder gets the last word, bumper sticker when the buses are pulling away, the trucks are pulling away from New Orleans, what's the bumper sticker on VeeamOn 2017? >> See you in 2018. (laughs) Let's have another great year, and another stick with Veeam. >> We find out I think Thursday where 2018 is going to happen. >> Yes. >> Alright so stay with us alright thanks Gents for coming to The Cube. >> Excellent, thanks for having us. >> You're welcome alright keep it right there buddy we'll be back with our next guest, The Cube are live from VeeamOn in New Orleans, be right back. (funky electronic theme music)

>> From the SiliconANGLE Media office in Boston, Massachusetts, it's theCUBE. Now, here's your host, Dave Vellante. >> Hello everyone, and welcome to this week's episode of theCUBE insights, powered by ETR. In this breaking analysis, I'm going to provide a little detail on the recent announcement that Insight Partners was acquiring Veeam for five billion dollars. There was a lot of information on the announcement in press releases and in news articles, so what I really want to focus on is what it means for the industry generally, and for the data protection community specifically. So, very briefly this was a five billion dollar exit for Veeam on top of a five hundred million dollar investment lead by the same Insight Partners last year. I think it had earlier investments, kind of a rent, with an option to buy. New management is being promoted from within, which I think is significant, to replace the two founders. Andrei Baronov and Ratmir Timashev are going to step down after the transition and give up their board seats. Veeam is a fascinating company. It started in the 2006, 2007 time frame, after the two founders, who met in college, formed and sold Aleta software to Quest. Then they started a company called AMUST Software, from which they created Veeam. You never hear about AMUST, but I believe it's the engineering and development arm of Veeam. Now the new CEO of Veeam, Bill Largent told theCUBE that AMUST is now a wholly owned subsidiary of Veeam and it won't effect any of the engineering assets that exist in Prague and in Russia. So this I the thing about Veeam, it's a very closely held company controlled by it's two founders, with a domicile in Switzerland. My understanding is Baronov is, well he's the technical guru, and he's a resident of that country in Switzerland, and the HQ there is very lean, the sizable engineering teams, as they say, is in Russia and Prague. Timashev resides in the US, and he's a marketing genius, who helped create this company, and it's always punched above it's weight class with, epic parties, and great products. Now interestingly, Veeam's rise, it coincided with the ascendancy of VMware. Veeam became the standard backup software for small to medium size companies within VMware shops. Their products are renowned for being simple, and working as advertised, and their customer support is outstanding by all accounts. But the US business lagged, despite the fact that most of VMware's business is in the Americas. You'd think you think if they super glued themself to VMware their Americas business would be higher. So a few years ago they decided to really go hard after the enterprise and they brought in Peter Mckay, from VMware, and he began to build up a US presence. But the enterprise business, it requires a lot of things that were kind of antithetical to Veeam. So think about long sales cycles, expensive sales people, belly to belly selling, with the expectations of, road maps, and clarity around enterprise feature sets. Now McKay was named CEO with Baronov, who continued to run engineering. So it was a bit of a culture clash. You got the sales oriented leader wanting the engineering team to turn on a dime and help close large deals, and satiate partners like HPE and Sysco, and you've got this genius co-leader, slash engineer, with an incredible track record of delivering features that the customer loves. So it really didn't work out and then Veeam scaled back on it's ambitions some what. At it's annual user conference in Miami last year, Ratmir came on theCUBE, and he talked about how Veeam's act one was all about dominance in virtualized environment. Let's listen to what he said about act two and then we'll come back and talk about it >> That was act one, we dominated it, we grew from zero to one billion within 10, 12 years. We added three hundred fifty thousand customers over that time frame, and now it's act two. What is act two? Act two is the, again, the new major industry transformation to a hybrid cloud. What are the similarities? Again, Veeam is in a great position because we're at the right time at the right place with a brilliant product. >> Now what we know is that act two is about a few things, one, as Ratmir said, hybrid cloud, multi cloud management, etcetera. But it's also about an awesome exit for it's two founders. Wow five billion dollars, five x revenue multiple, handing over the reigns is really the third thing this is about and creating more traditional governance structure for Veeam. Now they're moving from a governance structure that was closely held and opaque to one that is still going to be closely held, but ideally somewhat less opaque. Which brings me to inside partners. In the money world, you basically have a spectrum of investors. On the one side you've got banks, who are the most conservative. On the other side you've got VCs, now they're the most aggressive, of course. Now somewhere in the middle, you have private equity firms. Now they traditionally invest in companies, and they squeeze them for EBITDA, and they suck money out. But inside is more of a hybrid. They invest in a number of companies as VCs, they take a portion of the ownership. And to me they're more of a rule of forty PE, meaning it's not just about EBITDA, it's about growth plus EBITDA. So a rule of thirty or a rule of forty PE company, they can dial down EBITDA and go for growth, or dial up EBIT and moderate growth. So it's a great model. So I would expect Insight to bring structure and leadership to Veeam, with the goal of taking the company public at some point, because they like to sell to companies for all cash, I don't see a logical buyer at these kind of price points for this company in this market. It's growing market but it's still not a giant market. All right let's shift gears a little bit and get into some of the ETR data. Here's a narrative they put out recently that, to me, sums it up well. ETR said Veeam is one of the few vendors growing share among customers vs previous surveys in the storage sector. And that said, spending intentions are decelerating and continue to look poor in the largest sectors and Veeam trails Rubrik and Cohesity, although on a larger user base. So you can see by this statement that Veeam is of course doing well, but there are some cracks in the enterprise armor that I want to talk about and drill into a little bit. Now this now this Arline customer quote also, to me, sums up one of the reasons for Veeam's success. What this person said is if I want to do a Veeam back up to the cloud, it's basically point and click, very easy to use. Now I've talked to dozens, if not hundreds of Veeam customers, and they all say the same thing, it just works, that's kind of their motto. So this is the big reason why Veeam has steadily gained gained share over time. Now take a look at this chart, which shows the progression over time of Veeam's progress in terms of what ETR calls market share. Now remember, market share is a measure of pervasiveness in the ETR data set. And you can see, in the data, that Veeam has had a steady rise since ETR started tracking them at critical mass back in 2014. And you can see the steady decline in the survey for Veritas and Commvault and what appears to be, rapid momentum building for Rubrik and Cohesity, two companies that I said in my 2020 predictions breaking analysis that would continue to do well this year. Now notice I had to black out the January 2020 survey, which is ending shortly, so stay tuned for those results. But let's drill into Veeam's performance a little bit more. What this chart shows is a candlestick of net score and market share across all the respondents in the ETR survey for Veeam. Remember net score is a measure of spending momentum that subtracts customers that are spending less, the red, from those spending more, the greens. And it's represented over time by this blue line that you see. You can see that this blue line, it bounces around but it holds steady in the past couple of years pretty generally, and really in that thirty to forty percent range which you see on the left hand axis. Now that yellow line, is market share or pervasiveness, it also continues to climb steadily as I showed you in the previous chart. Now again this is amongst all respondents. Let's now take a look at this chart which isolates Veeam's performance in the largest companies, that enterprise push. Notice the pictures is somewhat choppier. Market share is okay, although unlike the previous chart, it's not steady. This is stunning. Peter McKay left in October 2018, and that's when Veeam really pulled back on it's big enterprise push, and you can see, there's a noticeable and steady drop there based on ETR data. So what's happening here is we are entering a new chapter for Veeam, act two so to speak. With new leadership and new governance. Danny Allen is taking over CTO, he previously ran strategy, Bill Largent is going to be CEO, the HQ is moving into the US. So in my opinon, Veeam's issues in the US have been more execution related than anything else. Veeam is a leader. So partnerships with Nutanix, Sysco, HPE, NetApp, should continue to improve and be somewhat productive, actually largely productive. Let's talk a little bit about Veeam's architecture, and a point of discussion that you often hear in the community. Veeam's a Window's based architecture. Now is that a blessing or is that a curse? Well the pros are that the Veeam team came out of a Windows world, and they know the platform very well. They are amazingly good at adding function, without screwing up performance somewhere else. You saw this a couple years back when they were making a big push on the enterprise and they increased the file sizes, and the number of objects that they could support. Another example is when Veeam added cloud back up, it was a really good product, version one. Unlink many products, when they first tried to port to the cloud, that wasn't the case. Recovery from the cloud is very tricky. Things are out of sync, you got a metadata challenge, and generally Veeam was able to achieve consistent levels of performance with it's cloud product. Now flip side of this, is that if you look at most, if not all, modern architectures today, are based on Linux. And once you start getting into mulit cloud, and cross cloud management, you're going to bump into and be interfacing with lots of Linux based systems. So Veeam is going to have migrate code, and maintaining consistent performance is going to be tougher. But as David Fourier, my colleague points out, there are many many ways to skin a cat, and Veeam's engineering team has really, based on it's track record, has proven that it can solve tough problems, and really deliver a great product consistently. I think the bigger issue and challenge for Veeam again, is execution in the US, and of course the enterprise. Customers in EBC's executive briefing centers, they want to see road maps, and enterprise features, and specials. And so we'll see, if that's something that Veeam has an appetite for. If they do, and I'm one of the incumbents, I'd be worried that Veeam could do a land and expand. Where Veeam isn't as strong in large enterprises, big companies they buy from Veeam. Maybe it's a smaller division, or remote location, but it's not like they don't do business in large accounts, they do. So in a way, they've already landed and they have an opportunity to expand, so that's something to pay attention to. If I'm an enterprise customer, I would be pressing Veeam on it's roadmap, and having them clarify their vision around hybrid and multi cloud management. Will Veeam be more transparent and willing to do specials for the enterprise, and their big partners, who expect them, when they say jump, they expect Veeam to say how high. How will Veeam's culture change, is the other thing I want to focus on. As the two founders step down, are they going to be able to main their engineering ethos, and customer loyalty, and can they figure out the enterprise. I'm a big fan of founder lead companies, when founders leave cultures often change. When founders stay, they're intensely committed, even beyond great CEOs who aren't founders. Look at Michael Dell. He went to the mat to keep his company against the great icon, now look at Dell technologies, after the EMC acquisition, it was completely transformed. Look at Oracle, look at the lengths that Larry Ellison goes to win. Compare that to a great CEO Joe Tucci, when he was at EMC, but you know when he was done, he was done, it was over. It wasn't his baby. So my point is how will this effect Veeam's culture and prospects in the long term. For me the bottom line is the big opportunity's in the US. And that's about execution. And I expect with the move to US HQ, new management, I expect they're going to see consistent market share gains, that's going to continue. The enterprise however, that's going to take longer, it's going to require more patience and more money. And with Veeam transitioning from essentially the two founder's lifestyle business into a company that's really built for an exit, they're going to have more money to invest, greater transparency, I hope, and a path to really build on their past successes. So this Dave Vellante signing out from the latest episode of theCUBE insights, powered by ETR. Thanks for watching everybody and we'll see you next time. (upbeat music)

>> Live from Miami Beach, Florida. It's theCUBE, covering VeeamON 2019. Brought to you by Veeam. >> Welcome to sunny Miami, everybody. This is theCube, the leader in live tech coverage. My name is Dave Vellante I'm here with Peter Burse. This is day one of VeeamON, theCUBE's third year covering VeeamON. First year was Enola, last year was in Chicago, they chose Miami at the Fontainebleau Hotel. >> Bummer. >> Yeah, which is a real bummer here. A lot of swankiness, a lot of fun people, A lot of big boats Peter, and this morning we're here at the Keynotes, theCUBE is going to be covering wall to wall coverage. We like to go out to the events extract the signal from the noise. Peter and I have done a number of shows together. Peter, I love working with you cause you bring great insights and I want to start off with Veeam. The company, the host company here. We saw when we started Wikibon, we saw the ascendancy of Veaeam kind of coincide with virtualization, and it was all about making backup simpler and easier to use for small to medium size businesses. That's what Ratmir Timashev , the co-founder called Act One. Now, they try to really ride the wave of cloud to create Act Two, of course they're not alone. You've got companies like Rubrik and Cohesity, and then established players, like Dell EMC and Veritas and IBM. All trying to hang on and get a piece of the 15 billion dollar business. But we're seeing the notion of backup and recovery move beyond just a insurance policy into this idea of data protection, what some people call, data management, which, you and I have talked about, means a lot of different things to a lot of different people And a concept that you've sort of coined called data assurance. I don't know if you've coined it, but you've certainly talked about it articulary. I want to unpack some of those trends with you. You've been studying this market. You've written about this notion of data protection. Your take on the event here, 2000 people, but most importantly, what's going on in the marketplace. >> Let's make one single point about Veeam. Ten years ago, you remember, the whole notion of backing up and restoring virtual machines was really hard. It's still something that we take for granted today, but it's pretty amazing technology that we can actually do this. Take these software images of physical devices and actually generate backup that can be very very quickly restored at very very high fidelity. It still is something magical. The reason why I say that is because the degree of complexity and the direction we're going. As state gets associated with different parts of the computing system or not associated with different parts of the computing system, it's going to become that much more challenging. We talked about Kubernetes clusters, for example. They're supposed to be stateless. They're supposed to be, you know, spin 'em up, spin 'em down. Spin 'em up, spin 'em down. Minimize the amount of state. Places that much more pressure on how you handle your data and do data management. Where I like to start, Dave, is we talk about what's going to happen next. Number one, folks have gotten the cloud wrong. Cloud was not strategy for centralizing computing. It really is a strategy for distributing computing with control, with services, with protection, with a common management type of mind. >> What do you mean by that? People think of cloud as putting everything into the public cloud in some kind of central location. Explain the distributed notion. >> The thing that's really interesting about the cloud is that these standards evolve, and as the experience evolves, and as the technology gets built and invented, that we now can see that we can bring cloud services to where the data resides. That's probably, well that's not probably. That's what's going to happen. The cloud is increasingly going to recognize the data, the cost of data state and the cost of data movement, are two of the biggest costs in any computing system. We want to keep data proximate to the activity it's going to support. Not just where it's created, but the activities it's going to support. That's how you associate data and business value. >> You're specifically talking about the services following the data in a consistent manner. Whether it's on-prem, in the cloud, or-- >> That's what it has to be able to do. We have to not just put the data where it's located, but that data as an asset has certain services associated, certain metadata associated with it, and often certain code associated with it. The whole notion is to be able to assure that when I spin up one of these new modern applications that don't know a lot about state, that the data is there. The services that make that data integress, secure, viable, backup and restorable, et cetera, are resonant. Very importantly, that that metadata that describes policy and other types of things also is easily invoked and easily applied without an enormous amount of administrative headache. So ultimately we can get to greater distribution of data with greater automation, lower administration, and greater security. >> We talked at the top about Veeam is really trying to ride the wave of cloud, just the same way it rode the wave of virtualization. There were three announcements today. The first was that Veeam hit a billion dollars in a trailing 12 month basis. That's big for pureplace software company traditionally in backup. Billion dollars is quite a milestone. >> Big range back up. >> Yeah really, it really SMB backup. >> 350 thousand customers. >> 350 thousand customers. Like 4000 a month. They also announced Veeam Availability Orchestrator v2, which is all about fast recovery. We asked Danny Allen in the briefing this morning, how they do that. It's complicated. It's a function of architecture, metadata management, but essentially doing fast recovery without necessarily having to rely on replication. There are some other components of that. Automated testing, dynamic documentation. We're going to dig into that a little bit more. Then there's this notion of with Veeam, a set of open APIs, which is cloud-like. When you think of riding the cloud wave, what do you think of Peter? You think of open, you think of, you mentioned Kubernetes and microservices. You think of an ecosystem. You think of simple. You think of cloud-like pricing. Can, in your opinion, Veeam take that success it's had in virtualization and kind of replicate that in the cloud? >> You and I have been on the phone with customers where we've argued to the customer that there's going to be greater specialization of data services based on greater specialization of a customer's data needs. Some people argue with us a lot. Just as some people used to argue with us about the whole notion of hybrid cloud. For a long time, You guys are crazy when you say that. When I saw that with Veeam, which I think is an especially important feature of today's announcement, it opens up the possibility that I can have a common platform for data assurance, data protection, but allow an ecosystem to create value in response to different classes of needs because data protection is going to be a strategic capability with any digital business. If I'm a business that's not treating data as an asset, as a basis for differentiating from my competitors, I have to protect that data and everything that it means and assure that it's available. That has now become a strategic business capability. Like every single strategic business capability, and I'm talking about it from an architectural sense here, there's going to be specialization and specificity to that business. With Veeam, creates an opportunity for an ecosystem to create additional layers of value and function on top of that core set of services to better map Veeam to specific customer needs. That's a good thing. >> When you talk about the ecosystem, I'm glad you brought that up. You got partners like HPE, Cisco, NetApp, Lenovo, Nutanix. Those are sort of the top tier partners that these guys have mentioned and a number of other partners as well. Veeam has become that billion dollar company, and is now attracting and building out this ecosystem in a pretty big way. Ratmir put up a chart that the market's 15 billion. They're not alone, as they say, you've got established players like Dell EMC, certainly Veritas, IBM with the old Tivoli products and then some other new stuff. Then you've got Cohesity and Rubrik just announced, maybe earlier this year, 250 million dollar investments, actually late last year and early this year. Veeam countered that with a 500 million dollar investment. It's a little unclear exactly where all that money is going. Private company, three private companies. But the big point is. >> Close to Miami. (mumbles) >> The point is, a lot of money coming into this space. In the enterprise, data protection is very very hot. Why is that, you mentioned it, is because of digital business and the need to protect data, assure data, be able to recover transparently and very quickly. >> And using some of these new modern application development styles that are intended to create as many options to the developer as possible. That's where you get the agility. >> Your point about Kubernetes and being stateless and some of the security challenges that we were talking about last night. This notion of data assurance, being able to spin up and automatically spin down containers so that they're not a threat. Raising the bar, raising the cost for the bad guys to get in and hack your systems, making it more complex, making it less attractive because Kubernetes, microservices, containers. Sometimes microservices, as one pundit once said, it's so micro. It's some important stuff in there. >> Oh look, you can build really crappy applications with virtually any technology, right. But microservices, when you sit down with a senior guy in a development organization and you ask him about microservices, or her about microservices, it all starts with the observation that microservices is an approach to doing application development. Just as client services started off as an approach to doing application development, where you think about, well I'm going to put all the application function here and all the database function here and we'll make database calls between the two. That's basically what microservices is. If you think about it any other way, you're missing the starting point. It's a way of thinking about how you break down a problem. Increasingly business wants to break down problems into smaller parts that are more segmented, more compartmentalized. But also that don't necessarily persist for any number of different reasons. Resource consumption, change and the need to change, security, et cetera. The whole concept that overtime we're going to see applications being comprised of containers that thought through the microservices approach built with languages that are supportive of containers and utilizing containers as the infrastructure. The other thing is, going back to the first point, virtual machines virtualized hardware. Containers virtualized operating systems. It's a really interesting technology when you come right down to it. Backing up and restoring all that is going to be challenging. Real beauty of this is that ultimately containers are going to reduce threat surface. Not just by the dimensions of location, identity, but also time, because I can vary containers out. It's going to be a multi-dimensional approach to improving security, enhancing function, and getting greater productivity out of IT investments. >> You got to protect that stuff. So we're here, VeeamON, day one. We got two days of wall to wall coverage with theCUBE. Veeam, a billion dollar company, going after a 15 billion dollar pie. We're going to hear from Ratmir Timashev, who's the co-founder of Veeam, and a number of customers and partners. Keep it right there, you're watching theCUBE. Dave Vellante with Peter Burse. We'll be right back after this short break. (techno music)

>> Narrator: Live from Chicago, Illinois, it's the CUBE, covering Veeamon 2018. Brought to you by Veeam. >> Welcome to the Windy City, everybody, you're watching the CUBE, the leader in live tech coverage. My name is Dave Vellante. I'm here with my co-host, Stuart Miniman. Stu, this is our second year of covering Veeamon. Although we have covered Veeam as a company since the early days of its ascendancy into the virtualization space, really focused on as a VMware specialist, virtualization only, now expanding dramatically into the enterprise. This is a company that has grown from very small to quite large, it's going to be probably close to a billion dollars in bookings this year, growing at 30 plus percent each year. A company that is moving beyond just the small business into the core of the enterprise with new executives, new messaging, renewed partnerships that seems to be really gaining traction. Veeam is a backup and data protection specialist that's now trying to rebrand itself as an always on, for the digital world, hyperavailability, intelligent data management, multi-cloud environment, throw in a few more buzzwords, Stu. And they're punching above their weight, as they always have, and it's a playbook that Veeam has used very, very successfully. Combine that with the branding, green everywhere. They've taken over Chicago. Veeam is famous for its parties, parties at VMworld, and other big events, like HPE Discover. And this is, I don't know, the fifth, sixth Veeamon that they've had, and we've got how many people here, Stu? >> 2,200. >> 2,200. So, what's your take? You saw the keynotes this morning, you were in the private analyst sessions today. Give us your analysis of Veeam. >> Yeah, Dave, you know, first of all, they did what most of the big companies do. They started off with a partner day. Veeam's all about their partners. Last year, you and I documented what they talked about is they were transitioning from the 10 years of virtualization to the next big wave, which is cloud. Doesn't mean that virtualization goes away, there's lots that they're doing in the multi-hypervisor world, but multi-hypervisor, multi-cloud, it's any data, any app, any cloud is the message. And Peter McKay started out, Dave, you know, big hero numbers for the company. As you said, they've had over double-digit growth, for now, it's 39 quarters, hugely impressive. 827 million in 2017 booking. The goal absolutely is to be over one billion dollars this year. For me, the number that jumped out, really, is they have 300,000 customers. You and I were talking to Ratmir a little bit and said, okay, you know, VMware has 500 thousand, he's like, well, 550 thousand customers and Veeam's in about 270 thousand of those, so about half of all VMware customers are in there, that Veeam is in there, but they have lots of headroom for growth in those VMware environments. As you've heard Veeam today over and over, the growth opportunity for them is the enterprise. So while they're in a lot of the Fortune 100 and Fortune 1000 accounts, they haven't penetrated them nearly as deeply as, say, a VMware has. But when you look at 300,000 customers, Dave, they're adding 133 customers a day. That's about 10,000 a quarter. 133 a day, 10,000 a quarter. Say, compare and contrast against another Veeam partner, Nutanix. Nutanix is adding about 1,000 customers a quarter, which is great for Nutanix, for their market, but as a software company in the cloud world, Veeam can stack themselves up against, again, some of the largest software companies in the world. And they put out the plan in place, is how they're going to get not only over a billion, but get to, like, that five billion dollar mark, which is some really rarefied air. >> So, let's stay on that for a second. Two themes I want to cover. First, the customers. 300,000 customers, 90% are in a virtualized and using VMware, that was the roots of this company. But there's 500,000, 550,000, I think now, VMware customers, so there's some opportunity there. We're going to talk to Ratmir Timashev, the founder. He was sharing with us before that their mantra earlier on was no physical, just virtual, just virtual. Well, last year, they announced physical. They're expanding, that's a TAM expansion move. Their TAM is much, much bigger than just a couple of billion dollars in pure backup. It's in the 20, 30 billion dollar range now. So that leads me to the second point, which is Veeam is an enterprise software, Veeam's a pure software company, first of all. So they are beginning to reach that rarefied air of a billion dollar plus companies. Obviously, Oracle, SAP, Salesforce, you know, are there. But others have recently cracked the billion: ServiceNow, Workday, companies like that. RedHat, obviously, is another one that's blown through that billion dollar figure, doing very, very well. Some would argue that Nutanix is a software company, could even argue, sort of stretching it now, Pure is a software company, a lot of software innovation. But Veeam, there's no argument, they are a pure software company. The number of billion-dollar software companies is few and far between, Veeam is about to crack that magic number, which is not trivial. >> Yeah, and Dave, we've talked about going beyond virtualization and cloud. Last year, one of the big discussion points was they bought N2WS, which is really how they get backup into AWS. And they've got large growth, 153 growth year over year. Other one, Microsoft, big partner of theirs, both for virtualization, something that kind of sent a ripple through the whole virtualization industry, when Veeam got off of only VMware and added hyper-v support. Well, Azure, they've got over 2,500 downloads of their Azure solution, so showing growth there. Also, supporting IBM Cloud, working with a lot of service providers. The breadth of what they're offering, in expanding beyond just the virtualization, admin, and some simple tools, where Veeam had really cut their teeth. Because, Dave, that core business, there's a lot of competitors there now, and Veeam's trying to make sure that they fight off the competition and stay ahead in this multi-cloud world. >> So much to talk about, I want to talk about the competition, but before we get there, one of the critical factors for a company like Veeam, trying to attract enterprise customers, Veeam's a company who's known for their SMB heritage. And so, partnerships, crucial. Just some of the partnerships that they've signed and emphasized over the last year and a half, two years: HPE, my sources tell me, we heard Bill Philbin up on stage this morning, he had a keynote, my sources tell me that it's many, many tens of millions of dollars, so this is on its way to 100 million dollar partnership. IBM, you mentioned IBM Cloud, Microsoft, the Azure stuff, Pure Storage, Nutanix, VMware, obviously, has always been a partner. NetApp, Cisco, we heard up on stage today. So expanding the partner ecosystem. Stu, explain why that's so important. >> Yeah, so first of all, Dave, so many places, how does Veeam go to market? One of the more interesting things, if you talk about the sales motion, is HP and Cisco now have Veeam in their price book. So Veeam, great channel, customers that love them, over 300,000, but when you take the Cisco sales force and the HPE sales force, and say you guys can make money on this, that really hypercharges what they're doing. It was always nice that they partnered with VMware, but how do you get deeper into those environments? I know you want to touch on the competition, we'll make sure we cover, there's some critical hires that they've also had in recent times, but what's your take on the competition? >> Yeah, that's just what I'm talking about. Before we get to competition, I do want to talk about, >> Oh, partners. >> Talent, but I just want to mention HPE, the reason why HPE, to me, is so interesting is because when they sold their software business to Micro Focus, they jettisoned the old HP Data Protect, or HP Protect software business. That opened up a huge opportunity and vacuum for Veeam to slide in. They were very aggressive with regard to partnering with HPE, smart move by Veeam, and I think, smart move by HPE, even though it's more of a reseller slash partnership agreement. Talent. This company's been able to attract talent. It started with Peter McKay, who was brought in to top-level the messaging and the executive team. He's brought in a number of folks, in sales and marketing, the new CMO is on as well. They've attracted a few, one in particular, analysts. So one of the kerfuffles before this show was Gartner announced that two of its analysts were leaving to go to Rubrik. Well, over the weekend, when this announcement came out, Veeam executives saw that. One of them was Dave Russell, who we've had in the CUBE before, very sharp guy, very well known, respected. Veeam jumped on him on that weekend and said, no, you know us better than you know Rubrik, you got to come work for us, and so they stole Dave Russell away. We saw Dave Russell on stage today. He left Rubrik at the altar, which, you know, I'd rather see that than him going to work for Rubrik, for four or five months. But what do you make of that? >> Yeah, so Dave, we've seen a lot of jumps recently, from the analyst side. It's interesting, Jason Buffington, who we'd have on the CUBE many times, is also here at Veeam, so hot space. I know last year at VMworld, we said this whole backup, secondary storage market is one of the hottest areas. There's a lot of money, there's a lot of growth. And what's the analyst's job? It's to really understand some of these trends here. So, some of 'em, it's something that they're passion on, they called Dave Russell the Godfather of backups. So, he said he wanted to be a builder, he wanted to get in, heck, even a good friend of mine just announced he's joining Veeam, Mark Toomey, who was from the EMC side, worked on the backup stuff, real strong technologist, was one of the early bloggers, really knows his stuff, and based in Ireland. Veeam's doing a real good job of attracting talent. Peter McKay's learning from his patriots, as to how to bring in good talent. >> And we'll have him on to talk to you about that. As a lead-in to the competitive discussion, I want to give some analysis that we got from Peter Burris and David Floyer from the Wikibon team. They gave me a few points leading up to this conference that I want to share with our audience. Number one is data protection and orchestration are moving up the list on the level of CXO concerns. So we're seeing that very clearly in our research. The second point, this company talks a lot about the future, and automation as being part of that. There's a dichotomy between the business and IT, in terms of the expectations to the degrees of automation that exist. The business assumes there's a lot more automation than there actually is, so when you see executives up on stage, talking about this automated world, the expectations in the business are everything's going to be automated. It's not that simple yet today. That causes some friction, potentially, in the customer base. Means there's lots of room for churn, that's good news for a company like Veeam, who's both an incumbent but a disruptor moving upmarket. The global 2000, according to David Floyer, is leaving billions of dollars on the table, in terms of lost revenue, because they have inadequate data protection. If you look over a three or four year period, companies are losing money because of inadequate, bolted-on data protection strategies. The last point is all these vendors are vying for position. It's unclear who's going to win this game. You've got no dominant player. You've got the backup and recovery vendors, the storage companies like Dell and EMC, you got security companies that are in there, you got startups, like Rubrik and Cohesity, you got Veeam, who's an established, they're like a hybrid, both established and startup. So you've got this competitive dynamic, which is really, really interesting. I want to flip it over to you. Last year at VMworld, backup and recovery, data protection was one of the hottest areas of topics of conversation, and on the floor, one of the most trafficked by customers. What's your take on that? >> Well, Dave, you know, core to our research, we've been talking about for, I can't even tell you now how long, data is at the center of it all. How do I not, it's not storing data, it's getting value from my data, it's unlocking data. It's not about big data, it's not about some cool new tooling that we have there, and what we've really found is if I've got good replicas, if I've got strong backup, I can actually leverage my data more, get more value out of it, that's critical to what we're talking about here, Dave. Which is why Veeam and others like them can get this, is simplicity, is something we hear over and over, the early days of VMware, that was why customer loved VMware. And Veeam followed that trend a lot. It's really tough to be simple. That was that whole hyperconverge wave, was supposed to be simple. Cloud is not simple today. It's multi-cloud, there's a lot of challenges there. So Veeam, their customers love 'em, the proof is in the numbers that they're putting in. >> I think that's great analysis. Let's close on that. The challenge, I think, for Veeam, like some of the incumbents that you saw, Veritas, IBM, when VMware's ascendancy occurred, Veeam stepped in and really disrupted and won that battle. Now, the others hung on. They hung on to their install base, but they're hanging on for dear life. You've seeing IBM now retooling its portfolio, Dell EMC retooling its backup portfolio, Veritas retooling its backup portfolio, so it's jump ball in that respect. Veeam's got to demonstrate that it can move from that virtualization specialist, small business specialist, up into the enterprise, resonate with the CXOs, and compete for its fair share. So we'll be watching that, we'll be covering that all week. This is Dave Vellante with Stu Miniman. You're watching the CUBE, live from Chicago, Veeamon 2018.

>> 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.