>> From theCUBE Studios in Palo Alto in Boston, bringing you data-driven insights from theCUBE and ETR, this is Breaking Analysis with Dave Vellante. >> Application performance management AKA APM, you know it's been around since the days of the mainframe. Now, as systems' architectures became more complex, the technology evolved to accommodate client-server, web-tier architectures, mobile and now of course, cloud-based systems. A spate of vendors have emerged to solve the sticky problems associated with ensuring consistent and predictable user experiences. The market has grown, I mean it's decent size, it's about $5 billion globally. It's growing at a consistent 10% CAGR. It's got a variety of established companies and new entrants that are attacking this space. Hi everyone, welcome to this week's Wikibon Cube Insights powered by ETR. My name is Dave Vellante and today, we welcome back ETR's Erik Bradley, who was the chief engagement strategist at Aptiviti which is the holding company of our data partner, ETR. Erik, my friend, great to see you. Thanks so much for coming on and spending some time with us. >> Oh, always enjoy it Dave. Great to see you too and I'm just glad I got some fresh material for ya. >> As always, you have fresh data. Now, Erik just recently hosted an ETR VENN session and on this particular topic, APM. Now VENNs are an open round table, they're exclusively available to ETR's clients and what we do is we sometimes come in theCUBE and we summarize those sessions in our Breaking Analysis. Now Erik, yo let's start with a summary slide here, guys, if you could bring that up, we just want to make a couple of points and... So as I said Erik, I mean this started back, you know in the System/390 days. Now, distributed systems and cloud of course create a lot more complexity, you got data that's really fragmented. You got user data, you got application data, you have infrastructure data and it gets complicated and you've got guys in lab coats having to come in and diagnose these stuff, lot of tribal knowledge. What are you seeing in the space? >> Well yeah, you know to start back, you know it's funny when the panel I hosted, one of the guys even brought up Tivoli, how long ago that was right? Then of course you get, you know you have the solar winds and you had people like that trying to just kind of monitor your network. You know what we've heard a lot about now is infrastructure has really become code-based. So when that happens, you really start wondering to yourself the lines are blurring between infrastructure and application because at the end of the day, what you're really monitoring is code. So it has gotten incredibly complex, you have OnPrem, you have hybrid, you have multi-cloud approach so it has gotten extremely complex and there's also now a third wave of next-gen vendors getting involved in the mix as well. As you're aware, New Relic and Datadog, obviously, Splunk has been in logging and monitoring for a long time. You also had some of the traditional players throw their hat in the ring through acquisition, that you know AppDynamics gobbled up by Cisco and obviously Splunk trying to continue to reinvent themselves a little bit by SignalFx. So it is a very crowded, complex space, it is a complicated problem but it's also a problem that needs to be solved. You know, we were looking at, you said in your intro about, it's only about a $5 billion market right now but there's been a lot of data out there from industry analysts saying that that's going to grow quite handsomely over the next five years and it could get up to 13, 14, 15 billion. And when I asked my panel about that, I had one gentleman say without a doubt, they see the next 10 years that spending in this space will continue. And when you pry and ask why, they simply state that digital transformation is not going to stop, it's marching forward, whether anyone likes it or not and as it does, monitoring is going to be critical, it's only going to increase and increase and increase. So right now, to your point, it's a small market but it's a growing market and there's a lot of entrance in there and their whole goal is to reduce this complexity that you're talking about. >> Now, one of the things we heard from the panel, guys if you bring up that same slide again, you know the third point on that slide was what's closely tied to digital transformation. You heard a number of individuals say, "Look, your digital business is critical, it's all about monitoring your applications and your data and your infrastructure. And we heard a lot that they wanted a, a single pane of glass and you made a number of points about the market. What are your thoughts on both the digital transformation, maybe the COVID acceleration of that mandate and that notion of a single pane of glass, is that aspirational or is it, in your view, something that is actually technically feasible? >> Not only is it technically feasible, it has to happen. It's going to be demanded by the large enterprise, they can't continue to monitor hundreds and hundreds of applications. They need something that not only can give them observability through their entire stack, but they need to be able to view it in one way, there's enough fatigue in monitoring and logging. And actually it goes even further than one pane of glass, they're demanding that these systems can now actually employ machine learning algorithms to be proactive. It's not enough to just say, "Okay, I observed this," you have to let me know that this may happen in the future and what to do about it. So not only is it feasible, it's something that is being demanded by the end-user market and the players that survive are the ones that already have that in their roadmap. >> Now, as we always like to do in these sessions, we're going to bring up some ETR data and we like to position the companies. So what we do is, we're going to bring up some of the pure players, pure-play companies and you can see them on this slide. But Erik, and when we talk about companies in this space, they are well over a dozen. It's just again for reference, you know it's Cisco with AppD, you mentioned that before Dynatrace is one of the leaders, New Relic has been around for awhile and is doing well, Splunk, Datadog. Now of course, and we're not showing them here, AWS, Microsoft and Google cause they just sort of, they pollute the chart. But so I want to start with the guys that are on this view and maybe talk about a few. Elastic came up a lot, certainly AppD came up a little, Dynatrace was obviously mentioned, especially in large organizations. Lot of conversations about New Relic. So let's go through them. Where do you want to start here? >> Yeah there's a lot to go through and we did spend the majority of the panel talking about the individual players, the differences between them and also what we thought their longer term prospects were but yeah, we'll go through each one. I think maybe to start with, let's go back in time a little bit, right? Cisco is a wonderful acquirer, they do a great job at M&A. A lot of companies will acquire something and let it die on the vine. Cisco has proven recently that they are reinventing themselves as a full platform play, whether that be through, you know, kind of, their networking reach or whether it be through the security. And AppDynamics is one of those that actually kind of gives you a little bit of both with being able to monitor. It is a great play for people that are already involved with Cisco. Now, I don't think you're going to see too many people that are non-Cisco customers run out and buy it. There you're going to see some of them, maybe the pure plays or one of my guests called the third wave of vendors. And that third wave is really about a Datadog and a New Relic. Let's talk about Datadog first. >> Yeah let's bring that back up guys, if you would. Now let me just, sorry to interrupt you Erik (indistinct) The vertical axis here is net score, that's the ETR's primary metric, and that's an indication of spending velocity, the higher, the better. And on the horizontal axis is market share. Now we're showing the July data, the October data is in the field, you know once ETR releases that to its clients, then we'll share that with you. But the first thing that jumps out at me is other than Elastic Erik, I mean, I'm not blown away by the spending momentum in this space but let's talk about that and then some of your thoughts on the specific vendors. >> Yeah, you know I'll go back because you asked a little bit about the digital transformation, I don't think I answered it fully. So to your comment about maybe not being impressed with the spend, I think this is one where the spend is going to come, kind of as a laggard because you're not going to rush out and go buy the software to monitor until you've built out the, what needs to be monitored. So as we're seeing this increase in the digital transformation, and I think you and I had a conversation in the past, but when COVID first hit and I did a series of panels, we had one person say that this virus is going to increase digital transformation by five to 10 years. Now that was an amazing statement. Basically, if you were on the fence, if you didn't, if you weren't already heading down to digital transformation, you needed to play catch up quickly. So now that you are doing that right, now that you're moving from OnPrem to a multicloud or a hybrid cloud environment, you have to get observability, you have to get monitoring into it. So now these players start to play catch up and this is where you're going to see the proof of concepts and you're going to see people trying to decide which direction they're going to take their company. Now back to the actual vendors. I believe that there is some differentiation, right? So we'll just take, for instance, Splunk. Splunk is obviously probably the biggest boy on the block when it comes to just straight up logging and monitoring. They've leveraged that big boy position to really, you know, add some costs, kind of intimidate their customers they've been compared in the past of the type of things that Oracle used to do from their cost perspective. And that's opened up some new competition, Datadog is one of those. According to my panel, Datadog is viewed more for logging and monitoring than it is truly full end-to-end observability throughout your entire network and application system. So that is one of the areas that's there. Now, to stay on those two names for a quick second, Splunk obviously has some holes in what they're trying to offer, they went out and tried to buy SignalFx to fill one of those holes. Now according to my panel again, did a great job filling that hole, problem is if you have a boat with three holes, you can't put your fingers everywhere. So they think, hey listen, Splunk scrape, they're going to keep the company they have and I know that we can talk a little bit more about valuations and the equity side later, but I think it's very clear that their sales and revenue are trending flat to down, whereas some of these other names still have great acceleration in their sales. So Splunk and Datadog both are really facing pressure from Elastic or generally just open-source. >> I was struck by the panel and how much emphasis they, how much complaining they did about Splunk pricing. Generally, I feel like hey, if your price is too high is the biggest objection, that's actually not a bad thing for a company but the way they kept hitting on it and said, "Hey, we're actively looking for alternatives" and Datadog was one of those and given the momentum that Datadog has, I don't think that that's necessarily a positive. But you know Splunk has a lot of loyal customers but you know to your point if you go back to the slide, Elastic came up very, very strong and they are head and shoulders from a spending momentum above the rest of the crowd here. >> Right. And you know, so you're right. If the only problem with a vendor or a technology is cost, usually you live with it because that means it's giving you what you need. So okay, it's expensive but it's also the best in breed and that's where Splunk has been for a very long time. And I think they're resting on their laurels knowing that. Enter Elastic and you say to these guys, the panel, I asked them, well okay, you can make Elastic work but is it truly a viable alternative from a technology standpoint? And the answer to that was not only is it viable, it's half the price. So if you can bring something in that can do the job the same and it's half the cost, it's really difficult not to at least try. And I had one of the other gentlemen who was a Datadog customer said, "Listen, we love Datadog, we were a huge customer and then I started getting enormous bills and I just switched over to open-source, I switched to Elastic, I switched to Kibana, I switched to Kafka and I can do this search myself. Now the difference is not every enterprise has the human skillset to do so and I'm not saying Splunk's going to turn around to disappear tomorrow, not even close. Because there is a difference in spending that money with the vendor or spending that money developing the human skillset to use open-source. But the bigger backdrop here is there are more alternatives than there used to be, there's more competition and the space is getting very crowded. >> Yeah, comment on open-source. I mean open-source is free like a puppy. But the thing about that, and we had one of the panelists was a very senior consultant, exclusively work with very large companies, he told a story about one of the companies years ago, he came in to solve a problem. The problem was they had 70% availability and then they had no visibility on their infrastructure and there's really no great, no good monitor, they get them up to whatever, five nines or two, three nines or wherever they got them to, but dramatic improvement. And so, but he said, "Look it, I work with companies with billions of dollars, $3 billion IT budgets so they don't rely on open-source for this stuff, they're happy to spend." But there's a huge market, particularly in the mid size where we heard that New Relic plays in a big way, it might be more receptive to open-source. >> Couple of great points there Dave, honestly. I'm going to jump over to the use case that was given by that person who was in a healthcare role. And essentially the part I didn't write into my summary was that his CEO was two days away from shutting down the entire business because he was so frustrated that he had no observability and Dynatrace was the one that was able to step in and fix that. And this gentleman did say that the majority of the companies that he does work with which are all in the Fortune 100, Dynatrace has a stranglehold in that spot. So that's really interesting to note. Now on the flip side, when pushed a little bit more later in the panel, he said, "Dynatrace is sort of resting on its laurels from a product roadmap standpoint and that's going to open up the possibility of a New Relic getting in," a transition to New Relic as you mentioned on their small to medium sized business. They recently launched a new pricing strategy which is basically a free version to get you involved to kind of get their hooks into you and see if you can work it out. And basically what they're trying to do there I think is, you know, make up for their lack of marketing. As you saw the panel that we spoke about said, "New Relic's technology is fantastic." They have the ability to provide a single pane of glass which is the Holy Grail in this space and they have the ability to provide machine learning and proactive type of ability which again are the two things that all of the end-users are asking for. The problem is that most people might not be aware of it because New Relic doesn't have as flashy a marketing department, they don't have the dollars as much as the others to go out there and compete with the Splunk and Dynatrace and Cisco. But from a roadmap perspective, it was almost unanimous that our panel agreed, New Relic is by far, one of the leaders from a functionality standpoint. >> Yeah, if you guys bring that slide up one more time, the X Y. I mean, I look at where New Relic is and I'm like wow, I'm surprised. I mean this company, I mean they were the hot company for awhile and I think still have the capability. You're talking about the technology. NRDB, New Relic database is like, it kicks ass. In fact, you know Erik, somebody brought up in the panel that they thought that snowflake could compete in this market because essentially Snowflake's positioning is this data cloud. But you know, here's New Relic, they have a purpose-built database specifically for monitoring an APM so you would think that with that technology, they could really make some moves. And then I just want to bring in two other companies to the mix here. Honeycomb who I think even their founder and former CEO now CTO, she coined the term I believe, observability. And there's another company that is run by Jeremy Burton, company's called Observe, okay (indistinct) and it's funded by the Silicon Valley Mafia. So that's going to be an interesting one to watch, they're coming out, well they're out of stealth but they're doing a launch on October 7th. So I think those are two companies that could disrupt this space and I would expect to see, as you said, it's a latent momentum in net score from a dataset standpoint because people are trying to plug the holes cause of COVID, you know security, work from home, that pivot and now it's really on to digital transformation and that's where APM really comes in. >> It really does and again, it comes back to that comment someone made a long time ago that everything's becoming code as software eats the world and everything becomes code, you need the ability to kind of monitor that code, enter Honeycomb. And as you know, we have two different studies at ETR, one of them is for emerging technology. Honeycomb is in our emerging technology study that's more of a private series B to series E round stage whereas our main study is for companies that are pre IPO or already public. But Honeycomb is a little bit different in my opinion, that they're focused very much so on the developers or the software engineers. They're a very microservices oriented type of product whereas some of the other ones may have started as an infrastructure monitoring and then kind of work their way backward into application. But Honeycomb certainly needs to be observed and it's funny when you talk about that, the one thing I think is, "Oh great, more players." The crowded space gets even more crowded. And I think well you know, kind of foreshadowing something you and I will be speaking about in a little bit but there's a lot of players in this space and there's a lot of other possible interest in there. You mentioned Snowflake. It actually wasn't brought up from our panelists, it was a question that came from one of my clients that said, "Hey, I'm curious, can snowflake play in this space?" And the panel thought about it for a second and said, "There's absolutely no reason why they can't, they most certainly can." And we all know the cash they have so I mean the easiest way to play in that would maybe be to buy some of the technology, integrate it in and yeah, they have that portability. And if I can real quickly, they've just, one of the things that came out that was so important about this, we haven't spoken about the vendors is, is the public cloud. The public cloud offers this. They offer monitoring, they'll give it to you for free. If I'm going to run Kubernetes at Google, I'm going to get the monitoring for free which is super nice, right? But if I have an enterprise that has multicloud or hybrid cloud, and I'm working outside of that public cloud silo, it doesn't work. This is the exact conversation you and I had about Snowflake. AWS Redshift's fantastic but it doesn't work outside of AWS. So if every one of our enterprises continues on the digital transformation, they need portability. They have to be able to go across any architecture structure and that's why these independent providers are really starting to gain steam when you would think they could never compete with the public cloud. >> Yeah man, that's a great point. And we've talked about this in the context of Snowflake that who are you going to trust with your multi-cloud strategy? Are you going to trust AWS? Are you going to trust Google? Yeah, okay, they got Anthos but we kind of know why they're taking that posture. Microsoft, look, I'm probably going to partner with somebody who can, who's maybe I have a relationship with them with my OnPrem and that is really sort of agnostic to the various clouds so I'm glad you brought that up. And you know the point you're making about Honeycomb is a good one and I'll add that, again, it gets more complex with microservices and containers, that's spinning them up, spinning them down. Sometimes these, first of all, these microservices, sometimes aren't that micro and second of all, you're sometimes talking about hundreds of thousands of containers so it's a really increasingly complex environment. All right. What I want to do is-- >> You didn't even touch on serverless, we'll do that some other day. >> Oh, yeah, I mean absolutely. A hundred percent, right. So, now let's take a look at some of the valuations, guys if you bring that up for me. So I put this little chart together and it's always instructive. Now I like to, simple guy Erik so I like to... So you see, the company, I take a trailing 12-month revenue and then the market cap as of 9/25. And then just a simple revenue multiple, just to get a sense, it's not a hardcore valuation model but it's interesting and there usually is a correlation to the growth rate, I just pulled that off the latest quarterly growth rate. I mean, look at Datadog. I mean that's like Snowflake pre IPO valuations. I mean you're really, right around there with smaller revenue, smaller growth rate, Snowflakes up in the whatever 120% range but well eye-popping. You know the same valuation as Splunk, I mean that's just amazing. What do you make of this data? >> Well, you know I was an equity analyst for almost 15 years on the Wall Street side. So the, my first caveat is a trailing revenue to the multiple is not always the same because people are looking at what the forward expected revenue will be but I actually do see the correlation here. And when you brought this up, my eyes popped open. I do not understand why Datadog has a 27 billion market cap on a trailing 350 million in revenue. I just don't know if their forward looking growth really warrants that and at the same time, then you look at a Splunk, right? I mean they have two and a half billion in revenue but their growth rate's down and truthfully, when I see a -5% growth rate, I don't know why you weren't at 12% sales either. I would argue that there's quite a few names on here that could be in for a reckoning, ETR actually as far back as a year ago caught this in our data and said, "Hey, there's some inflection points here and I think investors need to pay attention to them." And since we came out with the July report, a lot of these names we're talking about, despite insane valuations in the equity markets are flat to down. And, you know I do think that, hey if they stay stagnant and their technology is right but it's a crowded space, I think we're really leading to the point where as one of my panelists said, this industry is ripe for consolidation. These players are not all going to be here in 12 months, it's that simple. >> Yeah and by the way, thank you for mentioning that as a former equity analyst, you were right (indistinct) 12 months, it's kind of the rear-view mirror. But I'll tell you, two reasons why I do that. One is, I put the growth rate in there so you can pick your own growth rate and your own forward revenue. The other is it's really easy for me to get TTM off a Yahoo as opposed to >> Right exactly. >> And so truth be told. But, guys bring that back up one more time cause I want to make a point about New Relic. I mean I think they are potentially right for an M&A because they got great technology. Now remember Elliot Management is in there and when Elliot's is in there, stuff's going to happen. They're going to start cleaning house, they're going to really create changes, they don't just get in in a big way and sit back and watch, they are extremely active. And the New Relic, leader in this space, great technology, great heritage. So either they got to clean up and get that valuation back up maybe as you pointed out, little bit better marketing posture, et cetera or they get taken out. >> Yeah and let's think about the two things that coincide, right? You have one of the world's best activist funds get involved in Elliot Management. And as you said, they don't get involved to just sort of watch or observe as we're talking about here today, they are very active in trying to get some sort of a, you know, corporate action done. And at the same time, all of a sudden New Relic comes out with a new pricing model. They're trying to create a moat around the small to medium business, right? They're trying to grow their footprint. Now the great thing about getting involved in small to medium businesses, it starts off for free but you grow with them. So I don't think those two are a coincidence, let me just put it that way. I think that they're coming in, they're trying to entrench themselves in a new market and set themselves up for future growth and I truly believe that based on the product roadmap and the feedback we were getting from the end-users in my panel, New Relic has the ability to look across all architecture, it has the ability to provide a single pane of glass and it has the ability to incorporate machine learning for proactive response. Their roadmap is fantastic, they have an active manager inside as an investor, I don't think they're going to be around for much, much longer. And obviously that you look around and you wonder who the acquirers will be and it might be one of the major cloud players. >> Yeah that would be interesting. I mean it gives them a play in a multicloud world and either they're going to just use that for their own advantage or they will actually see that as an opportunity, we'll be itching to watch. Alright, anything we didn't cover that you want to touch on or give us your final thoughts, please Erik. >> You know I would also just sort of mention a little bit about Splunk. This is a company that has a tremendous amount of revenue, a tremendous installed customer base but many, many times we've seen it before and Oracle is the greatest example. They kind of forget about their customers and they don't treat them properly. And I can't tell you how many people I have mentioned to me said, "Hey when this all went down in the viral pandemic and I went to Splunk and I asked for a little bit of pricing flexibility, I asked for this, I asked for that and they just wouldn't give it to me." And I wrote an article once called (indistinct) never forget similar to an elephant. And when they come out the other side, they're going to find a way to replace them. And today I also wrote an article that it was our 200th interview and I entitled it, The Splunk Funk. And basically it's about all the alternatives that are now out there, not just open source, but other vendors, even the vulnerability management players like a Rapid7, like a Tenable are getting into this space now. Fortinet, which one guy called "Fortaeverything" is a company that's really expanding. So I would just really kind of caution some of those vendors out there that don't rest on your laurels, don't take your customers for granted because sooner or later, they're going to be in a position to bite the back. >> Well I'll say this about Splunk, I've been following the company since the early part of last decade and I've done a lot of Cube interviews at their shows. They do have a passionate, passionate customer base, they got the experts that run around with that crazy hat and I've seen Splunk killers emerge for the last decade and so... But I think your point is right. I mean they've, the SignalFx acquisition was something that, it was a hole to fill and it gets them into a subscription-based model, they're going through that transition now. But I think they have some real gravity with their customer base. So, all right, let me summarize. For years, the application monitoring and management, it's really relied on alerts, logs, traces and even what I call tribal knowledge. In that world of pre-distributed systems, that was fine, like I said a trace can tell you what was going on. But things have begotten much more complicated architecturally with cloud and mobile and they're really changing fast now. Erik mentioned serverless, we talked about containers. So, today it's much harder to understand the customer experience because it's difficult to get a full picture of the data. And what I mean by that is that the user data, the application data, the infrastructure data, they're all fragmented and the Holy Grail solution really takes all this disparate data, it ingests it, it transforms it. Connects the dots if you will, across clouds, Onprem and then it shapes it, brings in machine intelligence, really creating an organic systems view that can proactively tell you that there's a problem coming. And finally, nearly absolute Nirvana is doing this in a way that non-technical people are going to be able to understand the true user experience. You know in theory, this is going to allow organizations to remediate in 110th the time with much, much lower costs and that's going to be critical in this world of digital transformation. So thank you Erik, really appreciate you coming on today. >> Always enjoy it Dave, it's always great talking to you and hopefully we'll do it again soon. >> All right, I can't wait. And thank you everybody for watching this episode of theCUBE Insights powered by ETR. Remember these episodes, they're all available on podcasts. We publish weekly on wikibon.com and siliconangle.com so you got to check that out. And don't forget, go to etr.plus for all the survey action. Would appreciate if you kindly comment on my LinkedIn post or tweet me @dvellante or email at david.vellante@siliconangle.com This is Dave Vellante. Thanks so much to Erik Bradley, be well and we'll see you next time. (bouncy music)

from the silicon angle media office in Boston Massachusetts it's the queue now here's your host David on tape hi everybody welcome to this breaking analysis in this cube insights powered by ETR I'm Dave Volante and this episode is about data protection you might be saying Dave why are you gonna bore us with the conversation about backup well it's interesting the market is actually quite hot you know over the last 18 to 24 months there's been well over a billion dollars probably 1.3 1.4 billion dollars raised just from companies like rubric Kohi City Dhruva certo and a number of other startups like clew mio is a name you might not have heard of and I'm gonna mention a couple of others so you have the situation where these upstarts particularly rubric and cohesive er really challenging the install based players and they're spending a lot of money on marketing engineering and sales and they're going to market and they're really shaking things up and I want to talk about that dynamic share with you some ETR data and talk about some of the other players like veem who was you know a rocket ship because of the virtualization trend how are they faring in this kind of new market and why is this market gaining so much attention today and what does this mean for incumbents what does it mean for customers who can achieve escape velocity and what are some of the likely outcomes that we see the market is very confused right now if you look at the Gartner Magic Quadrant the and compare that to for instance the Forrester wave del EMC is not even in the Forrester wave the Gartner Magic Quadrant has rubric you know not as a leader and and it's just all over the place and so what I want to do is use some ETR data and some context from the cube to share with you our audience what we are seeing in the marketplace and kind of what it all means so let's get into it Alex if you bring up the first slide I first want to make a statement about the overall storage market the the ETR data set which is incredible doesn't drill down into backup although it does have pure play backup vendors in the data set so I want to start with storage because it's a it's the superset of the data protection market so what this chart shows is the all the sectors and it shows the net scores remember net score is they they ask every every quarter are you spending more you're spending less so he's spending the same they subtract the less from the more and that gives you net score so this is the net score for the three periods of October 18 survey July 19 survey in the October 19 survey and you can see the red line shows you know storage is kind of on the back burner yeah it's up ticking a little bit from previous surveys but it's got a next score of 18 that's crappy I mean it's not really a hot market and I've talked in previous episodes and breaking analysis as to why I really two main factors that I cited cloud guys eating away at the traditional storage array business and flash injected so much capacity and performance into the equation that data center managers are saying hey I don't really need any more storage right now so storage is kind of on the back burner you can see I blew it up here and you can see sort of how it's playing you see the hot sectors are analytics cloud computing container platforms data warehousing is is making a comeback I've talked about snowflake on previous breaking analyses machine learning and AI and new workloads robotic process automation even virtualization these are the hot sectors that are that are driving spending but I will tell you storage ultimately is going to be there it won't be down forever because people are always going to need storage these new workloads are gonna require new storage and obviously backup if you go to the next slide Alex you can see some of the vendors here so we've sort of established ok storage is is right now it's down it's not one of the hottest sectors but you can see there's some companies in here that are pretty hot rubric leads the list with a net score of 53 percent now the shared end might be a little hard for you to read here but the shared end out of the last survey 1,300 respondents from the ETR survey answered what there's you know spending intentions were and then the individuals mentioning specific companies in this case rubric 55 so it's kind of a small shared in you can see pure storage a company that we've talked about previously you know continues to to show strength you know 48.1% down slightly from you know the previous quarters but still really the only clear share gainer in the overall a primary storage market again rubric you can see Nutanix is up on the list veeam is actually quite impressive I'm going to show you some data in a minute that I think will impress you in terms of Eames continued staying power you see vcn on there sis goes on the list God knows why sis goes on the list their storage is not you know perceived as as leading but they do have offerings and Cisco so big people just kind of yeah we're buying from Cisco you see cookie City their little dip this past survey but still very strong again I'll show you some other data there you know etc so you can see that the point is even though storage is down there are a couple of shining stars like rubric like Nutanix pure storage veem Kohi City etc so let's let's dig into that a little bit before I do that I just want to share with you some trends on this slide with regard to the the backup market you know i underscore backup because it's no longer just the backup market its evolving so there's pressure on the overall storage market but but the data protection is actually really hot right now it's it's it's captured a lot of venture capital startups are moving in I'll mention a few that you might not have heard of why well several reasons one is the data explosion continues it's it's it's growing at an exponential rate and it's kind of nonlinear digital transformations are all about how you leverage data and so if you're making your business a data business in a digital business well you better have a way to protect it so things like ransomware are coming into play and people are really concerned obviously about ransomware so so data protection of evolves and expands sort of transcends back up into business continuity cloud and hybrid cloud are some other trends that I'll talk about in more detail that are driving opportunities for what we're traditionally known as backup and really now evolving into sort of these new areas last decade it was about moving from from tape to disc you know tape sucks that was kind of the data domain mantra and they were the hot company of last decade they got you know they did an IPO they reached escape velocity they sold for 2.5 billion you know but today you know the data domain platform that EMC bought and and now is Dell EMC is kind of old school right it's these new guys that are coming after that so so well well data domain pioneer data deduplication and higher performance back up moving to storage today it's a whole new conversation and people have come to the realization that the primary and active storage is only about 20% of the stored data all the all the less hot data I don't want to say inactive stuff it's not cold storage but it's files and objects and copies and replicas and and backups that's 80% of the marketplace today it's in terms of the volume of data not necessarily the spend you know OLTP stuff primary storage is expensive flash arrays expensive but huge opportunity especially in terms of data growth that's where all the data growth is happening all that unstructured data so today the conversation is evolving to data protection data management data assurance particularly with containers so you think about spinning up containers spinning down containers you know dozens hundreds thousands of containers how do you keep track of that stuff how do you protect that how do you assure that your data is not leaking that you're not exposed and so that's a really hot area that you're seeing a number of startups focus on so real focus on recovery becomes much more important for a digital business how fast can I recover security compliance this notion of data sharing CDM on this slide which is stands for copy data management a practice that was really popularized by actifi Oh DevOps really supporting DevOps through a data management platform being able to give live copies or near live copies of data so that you know tests can be tested on you know much more fresh data in that in compressing that cycle time analytics becomes more important I talked about ransomware before well you can look at the the backup corpus and do analytics on that to see if there are anomalies in anomalous behavior just in terms of bad actors coming in so all this stuff joined with cloud and hybrid cloud and is put a bridging the legacy business and it's bringing out a lot of new challengers to the incumbents so let's take a look at some of that data from ETR Alex if you go to the next slide this is the ETR data set on backup vendors so what I've done here is it is pulled out of storage the pure-play data protection folks so I can you know call in backup vendors they hate when they call them backup know we're much more than backup it's where data management now data management means a lot of things to a lot of people but but nonetheless they are expanding and transcending pure backup so so credit to them this is the net score timeline from January 2017 to the latest October survey from enterprise technology research and you can see here I've pulled our rubric cohesively veem CommVault and Veritas and rubric leads as they say with 53% net score followed by Veen 44% so you can see Veeam really hanging tough though he said he just relat relat of lis new to the survey jumped up jumped down a little bit in in this quarter you'll see that you'll see that in the et our data anyone get too freaked out about it I think he said he still got some some tailwind and cementum momentum as does rubric but look at Veen Dean's ascendancy came from really VMware they were the VMware specialists and they were all virtualized and now you know they do bare metal they're doing cloud and multi cloud and and and they backup you know office 365 and and and so that's the SAS platform but look at how well they've held up quite impressive there with Veen made have made a major push into the enterprise kind of pivoted back to SMB but still does a lot of business in the enterprise and you can see them showing up here what's relevant to me is that the the shared end in other words out of the 1,300 and the total survey how many are responding to these vendors rubric 55 relatively small veeam 155 much larger so a bigger install base cohesive 42 kind of just getting started in the ETA dataset CommVault 105 so carve-outs a 700 million dollar company and revenues on a trailing 12-month basis they get about a 2.2 billion dollar market cap they just bought hedvig they're moving toward a SAS model they launched a product called metallic they get a very very large install base you can see their net scores yeah we're there holding relatively well they're smaller obviously they're lower than those top three and then you can see Veritas Veritas is the big whale in the business they kind of mostly almost a pure play software company they do have an appliance but they really are the the leader a leader here and have had a big market they went private they got bought by semantics semantics didn't know what to do with them they fumbled around with it they did a private equity deal you know that was going okay but they had some management turnover a private equity you know squeeze them a little bit even though they made some investments in the platform and so Veritas has you know some challenges they have to serve the install base but at the same time they got to compete with the new guys and all the new guys cohesively and rubric in particular are attacking you know the veritas install base you know certainly CommVault and as well Dell and EMC you can't have a discussion really around leadership and backup and data protection without talking about Delhi and C they're so large so Alex if you go to the next slide you can see the net score for Dell EMC the N here is 348 much much larger than some of the other guys that I just mentioned I'm actually look at Veritas 97 even though I have a large install base so Dell EMC but here's the caveat this is all of Delhi MC storage so not just the pure play back up the previous slide I was showing you pure play data protection vendors this is all of Dell EMC so it includes all their primary stuff all their flash storage all their storage not the other parts of their business not the compute and analytics and other stuff just storage so I'm using this as a proxy okay so this is not Dells data protection business only and so what let me make some comments there and I'll comment on Dell data protection business you can see it came out of the downturn on the past 2009 big optic and Joe toots used to say we're gonna come out stronger we're gonna invest through the downturn we got the cash we're gonna come out stronger that's exactly what happened they came out very strong but then you know cash flow started to get squeezed they expanded their product portfolio it was like product du jour all these mega launches and it just got too confusing for customers Salesforce got confused they got less productive and any an Adele or EMC at the time was really relying on VMware it's the value in Dell and I'm sorry I keep saying Dell value in EMC at the time was really in VMware and you could see that kind of steady decline in the net score and that's what happened to Elliott management came in they squeezed EMC kind of forced him forced her hand and then Dell ended up taking in private let me make some comments about the Dell acquisition and specifically Dell emcs data protection business Dell MC took its eye off the ball in storage generally but specifically in the data protection business it fell behind it wasn't investing fast enough it had some management changes that put Beth Phelan in charge a couple years ago now and her task was okay sure she was tasked with shoring up this business so but they had to get some new products out they had to focus on you know some of the the lower end of the market and then have to refocus on the higher end of the market so they've really begun to get their act together again in in data protection and really refreshing the data domain piece of the portfolio bringing Alomar and data domain to get and becoming much more competitive having said that they lost some ground okay so they've got that same challenge challenges Veritas they've not only got the new guys coming at them with this modern you know data platform they've got to service the existing install basin it's going to manage that cash flow they're now a public company again so a lot of pressure on those guys I want to go back to the to the previous chart Alex if you will and then is the one that shows you know rubric cohesive veem CommVault and and Veritas the the pure plays there's some other dynamics that I want to talk to talk about here HPE exited the software business it's it's its course offer a business it's sold off the Micro Focus and as part of that it's sold off data protector when it did that it opened up a whole new partnership opportunity for these emerging companies particular cohesive and veeam are actually reselling through HPE HP he's got a massive channel and those two companies are doing very well there I said you can't talk about data protection without talking about Dell EMC same thing for IBM you got to talk about IBM IBM is a huge install base and IBM free but Tivoli years ago Frank Moss's company and then they served mainframes and it was this big complicated platform kind of still is and so IBM had to make a move so it it it was getting killed in the marketplace by Veeam in particular so it created spectrum protect Plus and an IBM is really gone after software-defined it's it's it's it's begun to modernize its platform going after containers as I mentioned is a hot area but it's still got that same problem it's got to service the install base and so they're sort of doing that balancing act but it definitely had to you know refresh the portfolio and it's done a good job there with spectrum protect plus a couple of the companies that I haven't mentioned Dhruva is getting into that whole data management space so cohesively and rubric kind of redefining back up into data management theme goes back to the basics really talks about backup in data protection data management as being the future so it's kind of Dee trying to deep position rubric and cohesive as as you know much more in the future and not here today and so they're sort of playing that marketing game and very effectively as you can see by its net scores again Dhruva hopping on the the data management day bandwagon certo kind of a dr replication expert Klum you know is calling BS and all these guys is saying we're going pure sass model and and Klum you know does a sass for pure sass pure software for just AWS small company but it's raised a bunch of dough it's raised about 50 million dollars I think but here's some other names you might not have heard of caste ni o Valero trillion ease guys are going hard after containers and what I referred to earlier as data assurance so the big question is who's going to be able to achieve escape velocity for the for the upstarts who's going to be able to hold serve for the the incumbents let me make a couple of comments on that I think storage eventually is going to bounce back as I say some of those hot emerging workload areas like AI they they're gonna need storage you know analytics is gonna be driving you know the need for these types of things security data surance data protection service storage will theirs don't bet against the data so storage will I think eventually you know bounce back and unlike compute where Intel makes all the margin storage is more like networking where you get really good margins it's a you know 60 Plus percent gross margin business pure storage has almost 70 percent gross margins cloud is the wild card here I predict you're gonna see the cloud vendors begin to dramatically expand you know their their portfolios and you know use beyond just gonna s3 simple object storage okay yeah we got elastic you know a block store EBS from Amazon you know Microsoft has you know the you know similar store just as Google they are gonna double down on storage they're gonna they're gonna look at storage as a bigger opportunity and that is a wild card it could you know continue to pressure the traditional storage guys but look let's face it it's a hybrid world still ton of stuff going on Prem so I think that that the the overall market will bounce back I think data protection as a subset and data management is going to grow faster it has some tailwind I think it's got an expanding Tam and those tail winds are digital data digital business security data assurance this new management capability that I talked about DevOps and contain a protection container platforms as I showed you earlier and the ETR data is one of the hottest areas going and I think you're gonna see some consolidation you saw CommVault bought Hedvig you're gonna see some exits veeam is now talking about doing an IPO it just took in a half a billion dollars in investment so its investors are gonna want an exit so are cohesive ease and rubrics which together have raised almost a billion dollars so you're gonna see some some M&A I think specialists like zero and and Dhruva are probably gonna be B targets I think you're still gonna see Dell become much much more aggressive kind of getting their act together the big incumbents IBM you know Veritas refreshing their portfolio again their challenge is the innovators dilemma so I do think you're gonna see some at least one maybe two the the favorites there would be cohesive near rubric is achieve escape velocity I don't think there's enough room for three to be like blockbuster IPOs that that that can survive long term but I think this data management thing has legs and we're gonna continue to watch it here thanks to you for watching thanks to our friends at ETR for sharing this data is Dave Volante for cube insights powered by ETR we'll see you next time

>> from Boston, Massachusetts. It's the queue covering active eo 2019. Data driven you by activity. >> We're back with the Cuban active FiO Data driven day one day Volante with student a man you're watching The Cube. Steve Duplessis here is the, uh, let's see. Uh, I'm going to say benevolent. Dictator of Enterprise Strategy Group. Chief analyst, Founder Welcome. Welcome back to the Cube. >> Thanks. Nice friend. Nice to be here, you fellows, and we don't Great. Congratulations. Newly newly closed. That's awesome. I want Yeah, thank you very much. >> Great. Looking good. You're here for your honeymoon. >> He said this is it? After a few marriages. This is the honeymoon. >> Yeah. That's good to know that the honeymoon's not over. So let's talk data, Tio. It's happening. >> That is a terrible question, Dave. >> So yeah, Data. Okay, everybody talks. Data you here, bro. My data is the new oil. Fate is a competitive advantage. And >> you like that. >> You do like what Data's in oil. >> So it's funny because we're I think I'm way older than you. You look better. >> God, no. >> But if you go back in time as long as we were doing this, it's been kind of hilarious, really. In retrospect, when you watch way watch these massive industries get created like the AMC just created because all they were about building bigger buckets to put data, zeros and ones. But no context, completely useless, just big buckets. So we valued Wow, you built a big fast bucket. Then IBM and her tachy whoever was gonna leap frog your next built a faster, bigger bucket. And that was with the world considered valuable. And it's now fast forward to the modern day and oh, maybe with the thing that's really valuable with those zeros and he's in contact. Maybe it's not really the bucket. It's, uh so valuable anymore. So >> So, do you think the with the bucket builders still bucket builders air they actually becoming data Insite creators? Or is it just still build a better bucket? That's cheaper. Faster >> till it's a great question. I think >> that we're first of all, you You still have to have the buckets, right? It's a relative who's going to make a smarter bucket builder. I don't know. >> You need someplace to put it, so >> you're gonna have to put it some place and you're gonna have to deliver it in the good news, you know, storage and or infrastructural say is the most brilliant business ever. From a capacity demand perspective, no one ever needs less, right. You always need Mauritz justa matter what you're gonna do with it, how you're going to address that. So it's we've propagated for 50 years and infrastructure business that build a bigger, faster bucket. Build a bigger, faster processor, build a bigger, faster. And every time you you solve one of those particular problems as long as data doesn't abate and it never does, is only is there's more versus Les. It's just every time we fix one problem way, you stick your finger in the dike and another poll springs out. So right now we're at the we've got more processing capabilities that week, ever possible. Use not true, right? We'll figure out a way to use it so that the last five years of and for the >> next five years waiting talk about analytics, wouldn't talk about io ti. We didn't talk about any of those things that are all just precursors to folk crap. We could make a whole bunch more NATO and do stuff with >> so So computers. Kind of a similar dynamic. It's sort of sensational. But is the relatively crappy business compared to storage rights? Storage is 60% plus gross margin. Business servers. I don't know. You're lucky if you get in in a low twenty's. Um, why is that? >> Hello, Number one. It's essentially monogamous. So 20% is wonderful if your intel and you get it. All right. Well, it sells. Got great gross margins, right? Everybody else's does it. You go down the supply chain. That's where you're gonna add value. So that's difficult for anything. Hard to get gross margins out of like spending. She had a box. >> So, Steve Yes, she's now 20 years old. >> I know >> when I think back 20 years ago. You know, short. You know this capacity price per dollar price per gigabyte. You know, all that stuff has changed a lot. The other thing, You know, I think back 20 years talk about automation and intelligent infrastructure. We were using those terms back that sure, one of things that they did. That that's right. Well, that's what I wanted to ask you about is like, right back then when you talked about well, how intelligent wasn't what could it do? And automation was There was a lot of times, you know, I'm just building a little script. I'm doing something like that. At least you know, from what we see, it feels like, you know, today's automation and intelligence is light times away from what we were talking about. 20 years. Sure, and it's true. What do you see in that? Well, >> so remember where we came from When we were talking originally about automation and orchestration, we were talking about how to manage a box, how to expand a box, how to manage infrastructure. Now it's data operations. Right now it's that that's the whole point of activity. Right to be in with is all right, if you are good enough and smart enoughto have the data sort of everything. What kind of matters? There you've gotta have the data and what can you up? What can you automate an orchestra from a data out perspective? Not from a box, not from a Let's scale out or scale up or something like that again, that's just a bigger bucket. It's a better bucket, but to be able to actually take data and say, You know what? I don't even know necessarily what I'm going to want to use this for, but I know that I gotta have. It's gotta be You have to be able to go click, click, click and get it. If if and when I figure out who I want to find out how lowering the price of Sharman and Seattle at a Wal Mart is going to affect my revenue or my supply chain or whatever. >> So one of the things I've talked with you in the past about is the pace of change of the industry. And, you know, I've said, you know, we know things are changing rather fast, but the average company, how much were they? Actually are they good at adopting change? And you've called me on stupid enterprises slow getting any faster, you know? Are they Are they open to change? Mohr. You know, what do you see in 2019? Is is it any different than it was in, You know, two thousand nine? >> That's a great question. So thie answer is yes, they're getting better. We are finally getting better. Problem, though, is a CZ industry insider watcher or a Boyar is ur is you see it and know what should happen 10 years. It takes 10 years in general for the world to actually catch upto the stuff that we're talking about. So it's not really that helpful to the poor schlub that's running on operation that build sneakers in Kansas, right? That's not really that helpful that we're talking about. This is what you could be doing and should be doing. The pace of change is much faster now because and give the em where most of the credit. Because once that went into place, all of the sudden and that you gotta remember there, everyone thinks vm where was an instant home run? It was 10 years of the same cold sitting in the corner in a queue, a environment before. Finally, we ran out of room in the data center, and that's the only reason they were able to come out. But once it was there, and it enabled you to stop associating the physical to the to the logical once, we could just just dis aggregate that stuff that I think opened up a tidal wave of kind of what else can we do? And people have adopted now. Now it's pervasive. So VM where's everywhere? Now? We're moving in the next level of kind of woman. Why can't I just build a containerized app that I can execute anywhere? No matter of fact, I don't even want it in my data center on. No one has to know that necessarily. So as modernization exercises have started to take off, they just they pick up, they actually pick up steam. So what we know empirically is those that are are halfway down. Call it the transformation or the modernization curve are going three times faster than those just starting. And those guys are going three times faster than the ones that are sitting there in idle doing stuff. The same >> city with the inertia going on. What do you make of this Bubblicious Back up market. Let's talk about that a little bit. You got these big install bases? The veritas, Conmebol, Delhi emcee, IBM, Tivoli install base. Everybody wants a piece of that action. Well, I guess cohesive rubric also want a piece of each other. Sure, which is kind of, you know, they get that urinary Olympics going on. I'd like to say And then you got these guys, which is kind of, you know, playing. Uh, I said to Ashleigh kind of East Coast, West Coast, There's no no, it's not East Coast, West Coast, but there's definitely more conservativism on this side of the of the flyover states. What's your take on what's going on in the landscape right now? >> So back up is awesome from the again, still probably the single most consistently line item budget thing for five decades. It's a guaranteed money in and out, and by and large it still sucks. My general rule is still it's crazy that we haven't been able to solve that particular problem. But regardless, the reason that it's so important is, besides the obvious. Yeah, you need to protect stuff, case. Something goes away and something bad happened good. But really, it's That's the inn. Just point for everything you do, you create data today. I'm backing it up on our later so that backup becomes the injust engine and it also is kicking off point. So at tapioca it started as wow, this is a better backup, most trap for lack of a better term. But really what? It was is didn't matter what with was back up or something else. It's I need tohave the data in order to do other stuff with it, and back up is just a natural, easiest way to be able to do that. So I think what's finally happening is we're moving from Christophe Would would say it's really about intelligence intelligence more so than just capturing those bits and being able to assemble and put it back together. It's understanding the context of those bits so that I can say stew in test. Dev has a different use case than Dave in whatever analytics, etcetera, etcetera. But they both need a copy of the exact scene data, the exact same state at the exact same point in time, etcetera. So if lungs backup's going to be kind of a tip of the spear in terms of going from what I will say, production or live data to the first copy, there's almost always back up. It's gonna matter. >> Christoph, Christoph Bertrand want your analyst? And so we saw, uh, c'mon, Danni Allen put a slideshow $15,000,000,000 tam and back up being a big chunk of that, probably half of it um, how does that jibe with your gut feel in terms of the opportunity beyond backup Dev ops? You know, I don't know. Ransomware insights. So you think that's low? High? Makes sense. >> I think I could justify the number. And what history has taught me is that it's probably low because we we're only talking about a handful of use cases that we've all glommed onto. But there will be remembered, like 11 years ago, there was no iPhone. You know what? How bad that changed. Everything that we do over there. And when did you know at some point during that particular journey, the phone became Who gives a shit about the phone? Excuse. But it's a text machine and it's an instagram thing, and it's a video production facility and all these other things, and the phone's almost dead. I only use it when my mom calls me kind of thing. So, you know, really, it's difficult to imagine. I certainly don't have the mental capabilities to imagine what the next 10 things after Dev Ops and this that and the other. But it's still all predicated on the same you got Somebody's gonna have a copy of that data and you're gonna be able to access it. You've got to be able to put it where you need it for whatever the reason again, a disaster is an important thing to recover from. But so is being ableto farm That data for nuggets of gold. >> Well, I guess I asked the question because, you know, it's a logical question is, is the market big enough to support all these companies that are in, You know, that gardener thing that they do? And I hope so because we love competition. >> I think I >> can answer it >> this way. Everything. Even the oldest guard Veritas, for God's sakes, 1000 years old, t sm 1000 years old con vault code base, 1000 years old. You're all big companies, right? And they're not perishing anytime soon. And I don't run. Love the startup Love the active FiOS or the cohesive sees coming in. But what they're really trying to do is not, you know, they might have started, as in a common ground, backup is a common warzone, but because there's money there like this consistent money there go get. But they soon turn in Teo other value propositions. And that's not is true with the incumbent back up guys because of their own legacy, right? It's hard to turn 1,000,000 year 1,000,000 lines of code into something. It wasn't designed, innit? >> Yeah, and it's not trivial to disrupt that base. But I guess if you get, you know, raising I don't know how much the industry is raised, but it's well over $1,000,000,000 now. I mean, activity has raised 200,000,000 and that's like chump change. Compared to some of the other races that you've seen. Cody City was to 60 and their last rubric was even, you know, crazy, crazy, even >> count the private money that beam God is that, you know, that was half 1,000,000,000 >> right? Well, that's a That's an off camera discussion. All right, we gotta go. So, Steve, thanks so much for for coming. Thank you. Great to >> have you. All right. All right, everybody. We'll be back with our next guest. You wanted the Cube from active field data driven from Boston, right on the harbor. Right back

>> Narrator: Live from Miami Beach, Florida, it's theCUBE. Covering veeAMON 2019. Brought to you by veeAM. >> Welcome back to veeAMON 2019, in Miami. My name is Dave Vellante, I'm here with Justin Warren as my co-host. Simon Robinson here is the Senior Vice President, 451 Research, Simon it's great to see you, thanks for coming to the cube. >> Thanks for having me. >> So is this your, is this right, your first veeAMON. >> It is, it is, first veeAMON, the first time in Miami, first time on theCUBE. So kind of bucket list check. >> Hey, got to give you a sticker here then, so here you go, thank you for coming on. And of course you've got the veeAM party tonight, which you may have been to some other veeAM parties at other shows, but-- >> Simon: I know them by reputation. >> Yeah, they're good. So looking forward to that. Two days, what have you learned here in the last couple of days, what are your impressions? >> Yeah, my impressions are that this is a conference that reflects the type of company that I think veeAM is, and veeAM's a little atypical for a technology company in this space, they didn't go down the traditional route, they had a very kind of different model right from the get-go, but what I see is real grass roots innovation, and veeAM has always been short on rhetoric, short on hype, and long on actually delivering the products and the capabilities that customers want, and it's been great to see examples of how that's playing out at the show, and we heard Ratmir talking about innovation, and 451 Research, we're an analyst firm focused on understanding the impacts of innovation, we provide data and insight around the technology innovation lifecycle, and it's always been, we've covered veeAM from pretty much day one, and it's always been clear to us that veeAM is a pretty special company, not just you have to be in the right place at the right time with the right product, but you also have to do it in a way that, they're kind of table stakes, you've got to do it in a way that actually engages and empathizes with what a customer is looking to achieve, and I think they've got that at the grassroots level, the veeAM admin level, a decade or more ago, and really have doubled down on that, so it's been awesome to see some of the examples of that at the conference this last couple of days, to have a general session with the eight demos. (laughing) >> And they all worked. >> They all worked. >> All of the eight!. >> I was terrified when they wheeled out the tub of water and it was like, they were dropping a laptop in there. Hey, you know, it was awesome and I think Ratmir is talking around, this being Act Two of veeAM's journey and veeAM's story. But firstly, lets kind of pay tribute to what they did in Act One. I think for any company to build a billion dollar revenue business software is a phenomenal achievement. But to do it in the data protection space? It's even more so. >> It's on backup, possibly the most boring thing ever, and they've kind of made it exciting. >> They used to say that backup was, well they used to say two things about backup. Firstly it's an insurance policy. And secondly, it was the one part of the IT environment that even storage people found boring. (laughing) But I mean, just see the kind of energy, enthusiasm, passion, of the folks here. That really isn't the case. >> That's true. It's been one of those boring but important factors. And then, veeAM's ascendancy, I've said this many times, has coincided with the birth of virtualization. We were consolidating physical servers because they were under-utilized, but then the backup had to be completely rethought because you didn't have enough band-width in the servers, and the capacity to run a backup job, and here comes veeAM, and it's just perfect fit, boom. Takes off. Now you've got Act Two, which is cloud. And I feel like it's jump balled, to use a U.S. basketball analogy, for you-- >> Simon: No idea what that means. >> --folks who don't follow basketball. (laughing) But it's "start over," right? And so, everybody's going after cloud, multi-cloud hybrid. And so, do you feel as though veeAM can replicate a success in what Ratmir's calling "Act Two" and draft from "Act One"? And one of the key factors, what's the tail wind for them, and what are some of the head winds. Certainly competition, we're going to' talk about that, but what are some of the other things that you guys see in your research? >> Yeah, so I think, I mean, first off, I think the hybrid cloud is a reality. Our research tells us that 60% of organizations are looking to, or characterize their strategy as being hybrid cloud strategy. But they're really struggling with actually enacting that and doing that in a processed, organized, deliberate way. We got a lot going on in the multi-cloud world, but multi-cloud is often an accident rather than something deliberate. It just turns out that they've got all these assets across all these different-- >> Dave: Multi-vendor, "Oh, I've got all these clouds!" >> That's right, that's right. Again, go back a decade, and how relatively straight forward the data and application environment seemed, right? I mean you had your application, it was probably on-prem, it really on a server that was connected to this bit of tin, and-- >> Little did we know at the time, right? >> Yeah, and fast forward to today, and data is just everywhere. So I think the tailwind for a company like veeAM is that, obviously, there's always going to be a need for backup, but I think that the conversation is evolving from one around data backup into one of data management, because you can only manage the data in your environment if you understand where it is, what its value is, what the potential exposures are, and I think that's why we see a big opportunity in managing data across this much more diverse and broader environment. >> So given that, do you think customers are better able to manage their data environment now than they used to be, or is it actually getting worse because now it's a much more dynamic and disparate environment. People weren't that great at it beforehand, have they gotten better, or not? >> It's hard to generalize. I think, in the main, customers acknowledge that they do a pretty bad job of managing it on a holistic basis. And I think we are seeing many organizations do it on a piece by piece basis. I think things like GDPR have been a wake-up call that, "Hey, your data is your responsibility!" And whether that data is on your facilities or it's in somebody else's, that doesn't matter. It's still your responsibility. So that was kind of a little bit of a wake-up call for organizations, certainly in Europe, and I think we're going to' see that replicated across the region also. >> We had the rise of Ransomware as well, which was actually the best advertisement for backup that you could ever have had. >> No doubt. >> Absolutely. >> Absolutely. >> These, we talk about the shared responsibility model, I mean, to your point, Simon, I mean, it's like security, right? I mean, somebody misconfigures an Amazon EC2-- >> Simon: That's right. >> -okay, it's not Amazon, it's the shared responsibility, and the same thing with the GDPR, malware. >> It really is, but I think, when we think about what the major challenges that just about every business faces, it's how do they scale their operations in a way that's going to' allow them to really take advantage of this thing we're calling "Digital Transformation," I know it's an over-used term, but-- >> Dave: But it's real. >> It is real, it is real. And I'll research, we asked a question in a survey recently, which is, "What is your organization's single biggest barrier?" And it's, "We don't respond quickly enough to the business." It's the biggest objective, but it's also the most difficult barrier to overcome. And I think we're only going to start to address this if we can fundamentally have a different look at how we scale operations, and that's across the application estate, across the infrastructure, it's also across data, right? And it's modernized, and it's transforming the way we think about managing data, and it's, we don't want to repeat the mistakes of the past and end up with a zillion silos that all have a person that needs managing that silo, that environment. We've done that. We don't want to, as we move to multi-cloud, and we acknowledge that data and applications are going to' be in a greater diversity of locations, we have to have a model that scales to managing across those environments. And it's that kind of consistency of approach that I think the industry is lacking, but there's definitely an awareness that we need to address though. >> Yeah, so given that there's that awareness and there's a need there for the market, there has been a refresh in data protection in that part of the industry. Nothing much was happening for probably a good 10 years. David LaMein was kind of the last big disrupter that we had in that marketplace. And then it feels like overnight, everything changed. And suddenly there were a whole bunch of competitors all trying to go after this data-protection market, and veeAM being one of them. So with that challenge for customers happening, and this dynamic market, how do you see the market dynamics evolving as we go through what veeAM calls its "Act Two," and people start moving to this hybrid cloud. What does that look like from your research? >> I think from a customer's perspective, it is often actually just perplexing. I mean, where do you start? How do you think about this on a strategic basis? And again, some of our research has pointed out, highlighted that, again, it's kind of obvious, but, how do we get better alignment between IT and the business? And when we asked about that in the context of digital transformation, it was the businesses, it was the respondents that said, "Yes, our IT strategy is being developed in lock-step with the business," right? Those are the companies that feel like they can, that they have a good handle on this digital transformation. Data transformation. And we do see a bit of a, almost kind of a schism opening up. There is a kind of digital leaders, and there are definitely digital laggards that are really, really struggling with this. And I think that, to me, means opportunity. I mean, there's opportunity for vendors to come here, to come in here and address it. I think with data protection specifically, if you'd have said 10 years ago that there was almost kind of a Cambrian explosion of start-ups and new companies in backup recovery, and data protection, DR. That sounded like madness a decade ago. You know, we've seen absolute explosion, huge number of companies coming together, coming to market with real innovation, which ultimately, I think, is going to' be good for customers. I think there's probably too many for the market to sustain at this point, 'cause all these new entrants, none of the incumbents are going away. But I think it's going to' be very much a partner-centric kind of success. There's a realization I think from, certainly from the hyperscale cloud providers that they're not going to be able to do this on their own, right? They're going to' have to work with "legacy" incumbents. These guys definitely have a role to play. I mean, I was just in a session earlier today talking about VTL in the cloud. >> Dave: Yeah. >> I mean (laughing) VTL?! In the cloud?! (laughing) >> Legacy processes, they're hard to kill. >> But the more this evolves, the more it seems like the public cloud is starting to resemble kind of the on-prem world in some ways. >> Well that's interesting. You know I was in London a couple of weeks ago for the AWS summit and Matt Garman, who's the AWS exec, I think he's the guy who first launched EC2, he was the product manager at the time. Now he's the senior executive. He said, "We believe the vast majority of customers will eventually migrate all workloads into the cloud." And then it was, "But," and this is the "but" that they wouldn't have acknowledged two years ago, we realize that its a hybrid world-- >> We can't do this ourselves. >> And then they talked about snowball, and outpost, and all these other things that they're doing. And Microsoft has always had a different posture. Of course it has a huge on-premise state. But let's talk a little bit about the horses on the track. So you were mentioning some of the legacy backup guys, all the start-ups coming in. There's been over a billion and a half raised for data protection. So you've got Veritas, Dell EMC, IBM with its Tivoli business, it's done some stuff with Catalogic. And then you've got Cohesity and Rubrik trying to get escape velocity, so they got tons of cash, having big parties, trying to replicate that marketing momentum. And you've got veeAM, has, to your point, Simon, built a billion dollar software business, okay. And is now saying, "Okay, we're going into the next wave." >> And profitable! I was speaking with Ratmir this morning, and they were actually cash-flow positive and on gap-basis as well, they're making money! >> There's nothing more atypical than-- >> I know! >> --a start-up type company that's making money. >> And you've got specialists. You've got Drover in there and Zerto-- >> Simon: Yeah, you've got Zerto, you got, >> --you know, a lot of guys, Amantis just got taken out by Cohesity, so. How do you guys see that competitive market shaking out, Dave Russel did the bubble chart, Ratmir showed it yesterday, 15 billion. Is the tam big enough to support all these guys? What do they have to do to get return for their investors? We're talking IPO's in the future before the window closes. It's getting hairy. >> It is, and you know, certainly some of those incumbents are not without having their challenges. I think it's incumbent on them to listen to what customers are asking for. Customers are moving to the cloud, right? They're going to' do that with or without the legacy guys. So they have to get on-board with that and help manage that process for customers. I think what I like about some of the newer guys, the Rubrik's, the Cohesity's, is they are talking about this bigger picture, this issue that, we said at the start, that many organizations acknowledges is a real challenge, and that's having an overall view into their data estate, their data assets. But for many different reasons, it's always been very, very difficult to crack that on a holistic basis. These guys are putting together some compelling stories, some compelling products to do that, and customers are definitely buying it. Now it's not on the scale that they're buying Veeam on a very tactical basis, so I think the challenge for Veeam is to evolve their own proposition from being pretty tactical, important, absolutely, but to kind of move up the value chain from there. And I think we are starting to see many examples of how that is coming into play with some of the announcements we've had at the show today. >> Yeah, I mean, to your point. A billion dollars profitable, 350,000 customers, and a modern sort of approach. >> Yeah, absolutely, absolutely. We've heard simplicity so many times over the last couple of days, but to me when we talk about if the challenge is operational scale, you can't do that without simplicity. And I think the fact that they acknowledge that from a very early date, we speak to a lot of, you know, customers overall, but lots of veeAM customers. Every single one says, "I love the simplicity." It works, it just works. You know, it's these kinds of things that they really do matter, because, not just because it just sounds great, but actually it lets, it either lets the administrator do other things, it's freeing up their time, or it allows a different part, maybe a less experienced or different type of professional to come in and manage the environment and not have to have a PhD in storage and backup and all those things that made this such a human capital-intensive process in the past. >> Easy and simple, they're easy, things to claim, and many companies actually try to claim that they're either easy or simple. It's really difficult to actually deliver on. >> That's right. >> But when you have customers coming back to you and telling you, "You are simple and easy to use," That's when you know that you've got it right. >> What I like about veeAM's messaging is, I've heard it a lot this week, is it's, start with backup. It actually is all about the backup, and you don't hear that from a lot of the upstarts, they're like, "No, no, no, backup. It's all about the data management." It's this sort of vision, these guys used the term "aspirational," almost as a pejorative. >> Right. >> So it's kind of interesting to see that competitive battle and then you've got the legacy guys trying to hang onto their install base, maybe making some announcements, I mean, Dell EMC just made a bunch of announcements, and kind of came out and admitted, "Hey, we took our eye off the ball." Obviously Veritas has a huge install base that everybody's trying to attack. IBM with Tivoli. >> There's a new CEO at Commvault. >> Yeah, and Commvault. We, I don't want to leave them out of the equation, right? They're doing their enterprise piece. And they've always had a little different angle on this space, so, there's a lot of action going on here. 15 billion, half of that is probably backup. >> The challenge is that this isn't a homogenous market, right? >> Dave: Right, very fragmented. >> There are just so many different things that we need to protect. There are so many different ways we can protect them, that soon just started getting into the details, that's when it starts, the market starts to stratify. >> And with cloud and new programming-- >> And people keep creating new ones, you know, object storage comes up, and then we've got no sequel databases that are now happening. >> Microservices, kubernetes, protection-- >> The whole container thing which we haven't really heard an awful lot about this week, I think. I mean, I'm looking forward to seein' how veeAM's story evolves there, but if we do accept that containers, kubernetes is going to be the new middleware that connects a new breed of infrastructure to a new application paradigm, if you like, then that's going to' need protecting. So I think we talk about it, backup, as being tactical, but actually it is a start of a journey, and also, I think one thing that's come out from this last couple of days is the importance of DR, and that's absolutely reflected in our research when we ask about, "What are big challenges in the storage and data arena, DR is a top two challenge every single time. It's too expensive. It's too difficult to run, to build, to test. I've been hearing that for 15, 20 years, right? And we're still not there. >> You can't automate the testing, it's too dangerous to fail over and fail back, so we don't do it, and we don't test it, so we clearly haven't cracked this one as an industry, and there is massive latent demand, I think, and I think, as we think, I mean who can tolerate any sort of down time for any sort of application, right? It just becomes a prerequisite to have applications always on-line. You know, that prerequisite for effective DR is going to' continue. >> Okay, guys, we got to' go. Thanks very much, Simon, for coming on theCUBE. >> Simon: Hey, great! Great to be here! >> Great to have you. All right, keep it right there, everybody. We'll be right back with our next guest, you're watching theCUBE, live, from veeAMON, 2019, Miami. We'll be right back. (theme 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 theCUBE. Covering VeeamON 2018. Brought to you by Veeam. >> Welcome back to VeeamON 2018. This is theCUBE, the leader in live tech coverage. My name is Dave Vellante with my co-host Stu Miniman. #VeeamON, our second year of VeeamON coverage, this is day one. Carey Stanton this year is the Vice President of Strategic Alliances at Veeam. We're having a great conversation about it. Hockey, Cape Cod. >> Golden Retrievers. Golden Retrievers. >> Oh, I love dogs. >> Dave, how many times do we travel the world and talk to a local? (laughs) >> Boston area guy. >> So welcome to theCUBE. >> Thank you very much. >> And welcome to Boston. >> A year and a half in Boston, right downtown empty nesters. My two children are back doing university in Canada. I've got a sophomore and a junior so my wife and I are living in Boston empty nesters, it's awesome. >> That's great, you've got to love it. And I love the fact that you're from Ottawa, but you're a Bruins fan. >> Yes, I've basically turned into a Bruins fan. I'm a Red Sox fan and a Patriots fan and the Celtics are in the playoffs. >> Yes, love this guy. >> You'd better be if you're working for Peter MacKay. >> Yeah, you have to. It's like you have to sign in. And I've worked for Peter for 17 years, three different companies. >> Okay, so you were at VMware. >> I was at Vmware, I was at Desktone, and then we did IBM and part of that was Watchfire which we sold to IBM. So, a long journey. >> So give us the update, what's happening in alliances. >> Yeah, so it's great. As you know we have our global reseller agreement that we announced most recently with NetApp just in March. We're now on their GPL. We went live on Cisco, we announced Cisco back in August but we went live on November 15th and we have HPE and all three of them are just exceeding expectations as far as the demand and the interest we're getting from our sellers. As you've seen from Peter and Veeam, we're targeted to the enterprise. We have our messaging our own hyper-availability. So these partners bring us a huge opportunity by working into their customer base, but we close 133 customers a day, right you heard Peter mention that. But we're bringing them into our customer base which is traditionally SMB and commercial and we're working with them on their enterprise. But an exciting stat for that one is that we say no naked Veeam. When you sell with an alliance partner it's six to eight times larger than if we sell standalone. So it's working, the messaging and the enabling we have with our field and we're 100% channel. So that's working very well on just the enablement with Jeff Giannetti, Sean, and Olivia, and Ameya. >> Well the other thing that you guys seem to have done is figured out how to take a long view, a strategic view with these partners. Many organizations, they look for the tactical. Okay, how much money >> Yes, yeah. are we going to make this year? You're looking at the lifetime value of a customer. >> Correct. >> It's frankly quite unique in this business. >> Well, the interesting thing we're doing which is not just on the global resellers which is on all of our partners is that we look and say what's a good partnership look like or what's the great partnership look like. And what we have is the investment that we are because we're private is we'll do the front-end investing up front. We'll do a joint business plan, have shared metrics across the table. So whether that's with Pure Storage or with Nutanix, with our VMware, Microsoft, we front-load all of those investments. To your point, is that we're not just waiting to see did we have success year one and then we'll invest year two. We take that three year business case view up front and do the front-end load investment. So, what does that mean? That's a dedicated business development team. We have 25 people working and go to market with HPE or 12 working with Cisco and we take that from technical architects, field marketing, product marketing and to make that in clot entire plot. >> Yeah, Carey, I wonder if you can give us a little bit of a compare and contrast. VMware built one of the best ecosystems out there. We already talked once today. For every dollar you spend on VMware you did 15, 20 dollars with the ecosystem, Veeam's nice vibrant ecosystem >> Yes. getting deeper with some of those partners. Give us a little compare from your previous life. >> Yeah, sure, so at VMware no question that they had that solution so we take that here as well and we call it the Veeam Currency. So when you're going in and selling Veeam, if you're selling an average selling price of $10,000, we're working with our partners where they're seeing that that deal is going to turn into a $50,000 traditional with an alliance partner sale in conjunction with their hard work. So they're managing the entire software process so they're seeing their up leveling the messaging so no longer just pinpointing at a hardware solution. And they're increasing their average selling price by 10x, so Cisco is at a great set. 10x, again I'll repeat 10x with Veeam on doing those deals. First it's just trying to go in and sell HyperFlex Standalone. >> It's just a really critical time in the industry right now. Our research shows that there's a gap between what the business expects in terms of the degrees of automation, the level of quality of services and what IT is actually delivering. So that says that customer base is really ripe for churn in a lot of accounts. And so you guys being aggressive with partnerships in regard to making that investment as a private company, the timing frankly couldn't be better. Especially as you go from what was a virtualized world where you guys did very, very well to now this cloud, multi-cloud digital, you know throw in whatever buzzword you want. But, we are at an inflection point. >> Yeah, we sure are. I think that what we're seeing with our partners especially on HPE and Cisco and Nutanix is they're all near hyper converged and so they're going in a whole different sales motion. We're seeing it on our hybrid cloud, we're a number one close sell partner with Microsoft. So we have our backup, native backup to Azure and so we're seeing this destructive market in the market place and we're also seeing a lot of our partners have competitive takeouts of Dell Avamar, right and their data domain. So we're going in and taking out Dell Avamar and they're going in and data domain so we have a lot of synergy and so as these traditional vendors such as Avamar, Veritas, Commvault, and the IBM Tivoli Solution is that we have those sales motions going with our partners that are going after those hardware solutions. So, again, it's very synergistic with our tier one partnerships. >> Well you see a huge drive towards simplicity. I mean, another thing you guys do really well is, and it sounds so simple, but you're compatible with a lot of different clouds, for example. So more work loads, more environments increases your TAM and your friendliness to partners. It sounds simple, but execution is not. >> Yeah, we're a Swiss based company, we remain. The Switzerland is that we work with all partners in all routes and so we've seen a lot of success in that way. We see a lot of demand coming from our customers, our partners wanting to work with us in these multi-cloud solutions that we have with Microsoft. >> Biggest challenges, is it a channel conflict? Dealing with deal registration, I mean, what are some of the challenges you guys are facing? >> I think that challenge is just enabling our sales teams on how to work with these partners and to understand the sales motion. And some of our sales execs are 20 year veterans that have come in and worked in a traditional place where when you went out to tackle an enterprise deal, you did that standalone. And we realize that we don't take any deals direct. So just getting them in the sales motion with our partners is a challenge, but one that is easily adapting to success that we're having in the field. >> Alright, Carey I know you're super tight on time. We promised to get you out >> Yes, sir. of here. We've got to leave it there, but thanks so much for coming on theCUBE. We really enjoyed having you. >> Okay, thank you very much. >> Alright, keep right there everybody, we'll be back with our next guest right after this short break. You're watching theCUBE live from VeeamON 2018. (techno music)

(upbeat music) >> This is theCUBE from Silicon ANGLE Media. I'm Paul Gillin. The cloud is all the rage these days, but as companies move to the cloud, and some of them seeking simplicity, what they find is they actually get complexity. Because they want to balance their resources, they want to hedge their bets, they don't want to get locked in, so they end up doing business with multiple cloud providers, and often with an on premise cloud as well. That creates cost complexity, and that's what Cloud Health Technologies is addressing. My guest is Tom Axbey, he's the new CEO of Cloud Health Technologies, a Boston based company, recently raised $46 million, they have software that helps companies understand their cloud costs and of course, to reduce them as well. So, Tom, just a couple weeks on the job, welcome to theCUBE. >> Right, thank you Paul, nice to be here. >> I'm sure you could tell better what Cloud Health does, than I can, so why don't you give your description. >> Actually, I mean you just did a very good set up for me. I mean Cloud Health is the de facto standard, cloud service management software. And as you quite rightly pointed out, One of the complexities now, is have a multi-cloud or hybrid cloud environment. So people aren't making a single vendor bet. That of course, increases, as you mentioned, the complexity and the costs controls, the governance, security, even more, and that's what we do. We manage all that complexity and give our customers a single pane of glass to help manage and optimize their cloud experience. >> When do customers typically come to you? Are they in a crisis, or are they coming to you earlier in the process, to avoid that crisis? >> You know, it's all over the map. It depends on their cloud maturity. So, customers, we've got, who are early customers, who were literally born in the cloud. So you think of services such as AirBnB and Pinterest, and Yelp!, you know, those services are cloud based right from the get go. What they've done is experienced tremendous growth, on global basis by offering these services, managing huge data sets, in the public cloud. But, they also had the expertise, because they were going through that right from the beginning. As soon as that scale becomes unmanageable, as it does, and that complexity becomes greater in a multi-cloud environment, they bring us in. It's just that their technical acumen was a little bit more advanced than say someone in the enterprise, who's been managing data centers and they want to migrate to the cloud. But they find that their expertise is in the data center world, and their expectations are, I want the same governance and management that I had in my data center, as I move to the cloud. So you're really embarking on the beginning of their cloud journey. Then sort of the third set of our customers are MSPs. So these are actually cloud service providers, who are basically offering their customers, and they're the trusted source for their customers, all the aggregated services that are available for them, and their experience. Mainly small-medium businesses and mid-market businesses will go through the MSPs, but they're customers for us too. >> Talk about complexity, what are some of the unique characteristics of the cloud environment that create complexity that perhaps customers don't always anticipate? >> Well the first thing is, is the pace of innovation in the cloud is at light speed. You've got these cloud vendors, Amazon, Microsoft, Google, and now you got IBM, you got Oracle, and many other ones, Alibaba, and AsiaPac, they're all increasing their service offerings at a rapid pace of innovation. Just keeping up to speed with the domain expertise is very very complex. Then, when you migrate to the cloud, you're migrating services, critical business services, and just like any other environment, computing environment, whether it's distributed computing or client server, you got to manage those complexities, so your business services and applications can run smoothly. As you know from certainly your experience, there's an inordinate amount of moving parts, and even more so in the cloud. Now, you multiply that by a multi-cloud or a cloud, or a hybrid cloud experience, and certainly, being able to aggregate that data, becomes a business critical task. >> We hear a lot about multi-cloud and customers trying to hedge their bets, is that a major force in the industry right now? Do you see companies actively trying to diversify the number of providers that they work with? >> We do, yeah, absolutely, and obviously, the larger the company, and the larger their cloud spend, the more likely they are to do that. So their not reliant on one cloud provider, and also they're experiencing different paces of innovation from the cloud providers, who are jockeying for that innovation right now. We're really focused on as well is the hybrid cloud. It could be a multi-cloud environment, but it also could be their private data center they're managing, or both. So yeah, we do see a huge trend in that. >> When customers come to you for the first time, and you do an initial analysis, what are typically some of the areas where you find the greatest inefficiencies, the greatest opportunities to save costs? >> Sure, I think it depends again on where they are in their cloud journey. They may be moving to the cloud, or thinking about it, and they want is some kind of visibility because they're so used to having tight controls, visibility, and budgets within their data center, because that environment is so mature to them, and the cloud is like the wild west to them. They're going to get these monthly bills, or they got to commit to certain workloads, or resources, without really understanding what their usage patterns are going to be. So we may come in and help with the migration, capacity planning, and certainly their forecasting abilities. The more mature they are, they want to start allocating costs, maybe by department, or by geographic regions, so they're getting more and more sophisticated in terms of their cost breakdown and their usage patterns and when those usage patterns happen. But also, as they control their costs, one of the ways they can do that is to buy future visibility, if you will, into those resources or compute power from the cloud providers. Being able to figure that out from a histotical and perspective billing standpoint, can be incredibly valuable to the customers. >> So what kinds of data do you provide for them? >> Well we provide essentially a window of aggregated roll-up of any particular service that they could have. So it could be their financial data in terms of their usage information, which resources or compute loads are working, also as they've deployed stovepipe data vendors for performance management or configuration management, security management, all of that comes into play as well, so we can roll up that aggregated data source. So they got a single pane of glass into sort of their entire environment. That could be at the VP level, who's running a multi-cloud environment, it could be at the financial level, where they're looking for cost controls, or could be the DevOps level where they're looking for anomalies or performance issues, or bottlenecks, or capacity planning, so at every level, we're trying to provide visibility into sort of the function and task that our customers have. >> Of course cloud vendors aren't interested in having their customers be multi-cloud, they want them to be single cloud, how cooperative do you find the vendors are in working with you to enable your customers to hedge their bets? >> I mean I think that they're very helpful, I mean number one, we've got deep relationships with all the cloud providers because we've been doing this a long time. Also, what we're doing is, we're hastening and accelerating our customers movement to the cloud by offering them the same visibility and governance and tools that they had in their data, or private data center world. So they actually embrace it, and they know it's going to be a multi-cloud environment, especially for the larger customers, and so, absolutely, we're helping that. >> Are customers beginning to look to broker their experiences, their costs, to move workloads sort of flexibly between different cloud providers, based, perhaps on even short term savings? >> They can do, yeah, absolutely. But again, short term savings are a trade off between long term savings, in terms of how much capacity you're buying, how much visibility you've got into your usage patterns as well. Certainly, that's the world that we're getting into these days, I mean, Amazon does per second billing now. When you think about all that data, it's absolutely, the complexity of it is absolutely mind boggling. >> The cloud world as Forester pointed out in a recent report, is consolidating into basically three big players, and then sort of everybody else. Do you think that's a good trend as far as customers are concerned? >> I think we've seen it over and over again, you see the dominant providers come forth and start taking over a marketplace, but there's always going to be room for other vendors. Now IBM and Oracle certainly are not just going to lay down. People like VMware are getting into the cloud business as well. They're the dominate ones right now, absolutely. I think what's good for the business is the trend itself of people moving all these workloads to the cloud and having more control over it, so that it'd actually be transparent as to who the cloud provider is. >> You certainly had the opportunity to take executive positions in a number of companies, what was it about this opportunity that appealed to you? >> Well, that's a very good question, I'd been at Rave for quite some time, especially in the high tech world, and we had a very successful run there, and we were acquired by a private equity firm. I was looking around and perhaps making a move, and I'd been fascinated by the cloud, and what it was doing, and how transformative it was to business. It was very akin to experiences I've had in my career, selling infrastructure software. I was at IBM, Tivoli for example, I was at MicroMUSE, and they were basically undergoing exactly the same transformation, in client server and distributed computing days. I was also aware of the investors and a couple of board members of Cloud Health, and I recall their very first investment, and it was explained to me by one their investors, this is Tivoli for the cloud. And of course, that resonated with me. I thought, that's brilliant, that's so simple, 'cause you've got exactly the same complexities, and then I tracked the company, had the opportunity to meet the founders, and I saw how they had executed against their vision, I saw the caliber of the team there. So, when an opportunity came up because the CEO and co-founder Dan Phillips was moving into the Chairman role, as my partner now, I jumped at it. >> You say Tivoli for the cloud, is an interesting analogy, of course the difference with Tivoli and cloud, is that Tivoli is on premise. You control the infrastructure, you have access to all the interfaces you need, not necessarily the case with the cloud. What are some of the difficulties that you encounter with getting customers the information that they need from their cloud providers? >> Well certainly the cloud, like I said, the pace of innovation is huge. So you've really got to be up to speed with the latest offerings, and if you look at all those APIs and how they could be changing, new services that they could be coming out with, literally on week by week basis, you've got to keep track of all of those. Then you've got to have a flexible architecture so you can actually easily integrate with those data sources and also understand the necessary workflows to present all that data in a consumable way. So it really is a very fast pace of innovation right now, and I think that's why the analogy of Tivoli for the cloud was a good one because you are aggregating all that data, you're given critical insight into, certainly back then, their network and infrastructure, business services, so the analogy holds true, but I think you're right, the pace of innovation is much quicker. >> Now, talk about how you justify your cost, what kind of deliverables do you promise customers in exchange for what you charge them? >> Fortunately, the deliverables are born out of history. We've got incredible ROIs. As you know, the monthly spend as it increases, as people's cloud experience grows, those costs can spiral quickly. I think that when people talk about the cost, we always talk about the value. What value are you looking for? How are you going to optimize your environment? So the savings we can save just on their billing or utilization, and then there's the governance, and then people want to do departmental charge backs or geo charge backs, and we can help them with that cost allocation. So we tend to talk about value more than cost. >> Where do customers leave money on the table though? Where do you find some of the greatest disconnects between what they could be spending and what they really are spending? >> It all comes down to consumption. If you, just like if you're deciding which mobile phone bill you want to get based on what your projected consumption is going to be, you know, they want to lock you into the biggest one, they're going to show you lots of different values for signing you up for a three year contract. It's the same for a cloud provider. The more you're willing to prepare, the more you can lock in your costs, and of course, as you do that, the risk is, you don't fulfill all of those costs and realize those savings. On the other hand, you maybe growing so exponentially quickly, that you're actually paying more than you would be, than if you just basically consumed a different pricing model. >> In general though, do you find that customers, if they manage their cloud costs wisely, do they, in the final analysis, save money by moving to the cloud versus an on premises architecture? >> Without a doubt. The time to deploy services is so quick. The time to integrate different facets of your business services is so quick. When you think about unlimited throughput, and speed, and storage, on a global basis for your services, it's unprecedented. >> Does your service cover software as a service as well? We do, I mean, we're a SAS company ourselves. So, as you know, many SAS companies are now providing services into the cloud. We could be collecting data from those services too. >> What's the future hold then for Cloud Health? Where do you want to take this company? >> I think that in beginning, I said we're the de facto standard for cloud service management. It's hard to claim you're really the de facto standard. Especially when we're a private company. I think what we want to do is continue to provide value, continue to innovate, continue to have that domain expertise, and when you look across the whole governance spectrum, about all these different systems, all these cloud providers, all these different data sources, it's absolutely immense. I think that always having that single pane of glass so that people can really get the visibility they need to optimize their services, we're going to be a very large company just doing that. >> I understand you have some ambitious growth plans this year in terms of the number of employees and also moving your headquarters. >> We do, I mean, I've only been on board for what, two and a half weeks, and there's already been 10 people hired since I've been there, so that's the pace of hiring right now. I think we'll end the year at about 240 employees, so probably hired about 80 employees, and then we are moving early next year, we're moving Fort Point to Downtown Crossing. So we got to accommodate them all. >> For those of you who are not familiar with Boston, Downtown Crossing is the center of town, and Four Point is the hot new area where GE is building it's new headquarters. In terms of how your business category develops, do you see this as a continuing to be a major independent category, type of services you provide, or do you think cloud vendors will ultimately acquire companies like yours and offer these services on their own? >> I think both is going to happen. I think cloud vendors will acquire companies who do stovepipe, perhaps functionality, for a certain area, but no cloud vendor's going to be able to offer the cross multi-cloud or hybrid cloud experience that we do. I think you're going to see both, but absolutely, the ability to manage multi and hybrid cloud environments is the key. >> It's something I always ask our Boston based guests, what are the advantages of being based in Boston? >> Well the advantage is absolutely huge, especially in this day and age. Boston has got an immense talent pool coming out every single year from universities, and that talent pool now wants to stay in Boston as opposed to move to other places. Because the city has gone through rejuvenation, it's a vibrant city, it's an invested in city, you mentioned GE, there's other companies moving here, it's a great time to be here, you've got many success points in the high tech arena such as HubSpot and Wayfair, and LogMeIn, publicly traded companies offering great opportunities, so I think the pace of innovation here is happening at a tremendous clip, so Boston's a great place to be. >> Glad to hear it, welcome to town. Congratulations on your growth, and much success to you. >> Tom: Great, well thank you very much for having me. >> Cloud complexity, simplified. I'm Pual Gillin, this is theCUBE. (upbeat music)

>> Announcer: Live, from Las Vegas, it's the Cube covering Veritas Vision 2017 brought to you by Veritas. >> Welcome back to Las Vegas, everybody. This is the Cube, the leader in live tech coverage, and this is our second day of Veritas Vision in 2017. I'm Dave Vellante with Stu Miniman. Jason Buffington is here, good friend of the Cube, Senior Analyst with the Enterprise Strategy Group, otherwise known as ESG. Jason, good to see you again. >> Thanks for having me back. >> We've been bumping into each other a lot lately, a lot of storage stuff going on and you you gave a panel discussion today. You had, you know, three of the four big Cloud guys up there, no Amazon, Stu. They weren't up on the panel, but that was good, you had an interview with those guys. >> Jason: Yeah. >> So, congratulations on that and welcome again. >> Yeah, everyone wants to talk about data protection, right? So, there's... >> Dave: Hottest topic, isn't it? >> It is, every time you go to a show, the last show that I was at, it seemed like over half the booths were talking about data protection. So, to come here, you know, Veritas kind of owns that as a name. And so it's been fun to just be part of the participants. >> Yeah, Jason, you know, you cover this base, and you know Veritas well. There are people I talked to getting ready for this, and they said, "We remember Veritas back in its hay day." You know, back pre-acquisition. During the virtualization era, it kind of got quiet. I mean, they got acquired by Semantic, things went down, but now they're an independent company, and one of the shows that, you know, we've been at VMWorld, absolutely. Data protection is super hot, you know, product of the year was one of those companies, whole lot of startups there, a lot of investment. What's your take on kind of the new Veritas, you know, where they fit in that ecosystem with all those startups and everybody else? >> No, that's a good read, so let's talk about the market first, and then I'll put Veritas in it, right? So, I think you're spot on that when the virtualization wave came through, most of the really big established data protection vendors were not first market, right? And in fact, every time that we see this, I've been doing this for 28 years, I've been backing stuff up, right? And for most of it, every time the platform shifts, the traditional dominant data protection vendors are not the first ones to jump on that new gear, right? Windows versus NetWare, now we're into virtualization. So, we saw Veeam, and PHD and vRanger, and a few others that barely get an honorable mention in that line, right? We're in a really interesting time, though, this time around because every time, in the past, when you moved off of the old platform, the presumption was, you turned it off, right? This time around, we're on the, here's a fancy word, we're on the precipice of a new shift again because we're looking at Cloud as the new platform to move to. But here's the fun part. We're not leaving the old stuff behind, right? We're not turning off all the virtual servers and the physical servers are on their way out the door as we go to Cloud. We're embracing Multicloud as the new destination, not this mid-step along the way. And I think that's really interesting because, just like in every time past, it means we're going to get a reset of the leader board when it comes to data protection. And, just like in times past, the secret sauce that made you dominant on the last platform, doesn't necessarily give you an edge technology-wise on the next platform. All it really does is give you momentum, right? So, yeah, there's a few other folks that we could list that they've got some momentum going for one reason or another along the way, but for the marketplace, if physical and virtual and Cloud are all going to be together, Veritas has been doing some of those for 20 some odd years. They've made some announcements around the rest of the suites. I think they're in a good place here. The thing I'm excited about from Veritas, and I do, I'm a fan, you want to root for them, right? I mean, 25 years on the bench, you want to see them keep going. I think the opportunity is that, since the divestiture from Semantic, they have a lot more focus, right? You know, it's really hard to tell a story that's everything from Malware and cyber security, all the way through to a breadth of data protection. But if you look at how they're talking about things now, and I really like the 360 narrative that kind of pulls it all together. Every part of their portfolio kind of pulls the other parts together, right? It doesn't matter, in data management, whether you want to start with backup, or you want to start with storage, or you want to start with availability, anywhere you look on that circle, it's going to pull the rest of the line in, and these are all the things that folks are asking for from a customer base. So, I like the tech that they've got. I like where the market is headed, and I think they've got a real shot to be one of those top three dominant names that we talk about moving forward. >> Yeah, so, I mean it's a 30 plus year history. >> Jason: Yeah. >> And pretty amazing, I mean this is an amazing story, this company. I mean, they came out, kind of a small company, and then there was that relationship which they bought Seagate. You know, Seagate's backup business. Seagate actually had a piece of the company for a while. >> Jason: Yeah. >> You know, Al Shugart, when he sold that stock, basically saved Seagate cause of the cash infusion. So, it was a long history, and then they kind of went dormant... >> Jason: Yeah. >> For a while under the Symantec Governance. And now, so the big question is, can Veritas get its mojo back in the space and become that super hot company again? >> So, by the way, sidebar, you talked about Seagate. I actually have a copy of Seagate Backup Exec sitting on a shelf in my office. (Dave laughing) And one of these days, I will open up the data protection museum, cause I think I've got most of the pieces and parts laying around. So, can Veritas get is mojo back? The thing that Veritas has to consistently remind people, one, we are not your daddy's or your granddaddy's backup company anymore, right? So, they're working on things like, they announced this week a new UI coming for NetBackup 8.1, and I thought they were going to crowd mob out of affirmation for that. People were so excited for, you know, finally we're going to get a contemporary UI that doesn't look like 1995 coming in, in that backup. So, certainly, some of the cosmetics, the sterilization of that UI going across as many of those products as possible in order to provide more of a contemporary feel. That's an easy place to dig on, right? But I think what Veritas really needs to think about is, they need to remind folks that, while they are not the stodgy presumption of what people might think, this is not their first rodeo in any of these areas, right? We had new announcements on software to find storage this week. Things like storage foundation and VCS, they've been doing that for 25 years, right? I mean, they've been doing to software to find storage before it was a thing, right? Availability, right? So, we talk about, I like the VRP product. I think it's a cool architecture, and something certainly that powers a lot of the Cloud mobility type capabilities that are there. And the idea of a heterogeneous platform to enable higher levels of availability, I think the market is just now growing into that, right? So, the trick is, we're not the old folks, but, oh by the way, we have reams of experience like you can't imagine. Let's put those things together and have an enterprise level conversation. >> So, let's lay the horses out on the track here. I mean, we were all at VMWorld, and we saw the, it was the hottest... That and security, backup and security are the two hottest spaces in the business right now. We saw the startups, the Cohesity's, the Rubrik's, the Zerto's, and sort of, the upshots. The Veeams, you know, a lot of action at their booths. Obviously, Veritas getting its mojo back. Where's Commvault in all this, so how do you lay out the horses on the track, what's the competitive landscape look like? Paint a picture for us. >> Yeah, so, first and foremost, I always go back to what ESG calls the data protection spectrum, right? So, the behaviors of archive, backup, snapshot, replication, availability. They are not interchangeable mechanisms. We call it a spectrum as a rainbow kind of feel. You know, when is the last time you went outside, saw a rainbow in the sky, and one of the colors was missing? You know, these colors do not replace each other. Snapshots and replications, etc. When you look at where the market's going, imagine a capital Y. In fact, if you go look up on your favorite blog site, I have a blog on, why does data protection have to evolve? This is the answer to your question. The base of that Y is just backup. Can you make copies of all of your stuff? And even that, I think a lot of folks have a challenge with. The next step up is that idea of data protection. So, backup plus snapshots plus replications, single set of policies. Where the market's going, and how it kind of lays out the horses, is now we're at that fork in the road in the capital Y, right? And some of the folks are moving down the availability path. And think about that word for a second, you can remember the vendors who like to go that direction. We're going from reactive recovery to proactive assured productivity, right? Because all the backup folks are just as down until somebody hits the restore button. That's the thing that no one really wants to talk about, as opposed to, if you have monitoring, if you have orchestration, if you have failover and rapid recovery mechanisms. Now, you really do have an availability story that comes out of that. And not all the vendors that you mentioned have that. >> Dave: Well, who are the leaders? >> Yeah, so, certainly, from a momentum and brand perspective, Veeam is definitely on the front line of that, you know, I think car racing is more easier... >> Dave: Cause they've got growth and... >> Yeah, they have momentum, they have, certainly virtualization is still a sweet spot for the data centers... >> Obviously, Veritas is... >> Veritas is absolutely... >> They said 15 years in a row in the Gartner Upper Right... >> Yeah. >> Okay, check. >> Dell EMC, broad portfolio there. Those are kind of the biggest three from, who has all the checked boxes they need to make sure they have a dialogue for the next conversation. >> And Commvault, you wouldn't put in that? >> So, well, I always think of three, you know, bronze, silver, gold, not in that order. >> Yeah, it's like baseball playoffs. Who's going to get in, who's the wild card, you know. >> So, Commvault checks all the right boxes, right? They have all the right narratives along the way. I think the challenge is, organizationally, they're a little siloed in how they tell the stories, and so sometimes it's hard to remember that they're actually the only ones who have a single code base. The ones that, you know, one set of tech that can check all the boxes. Everyone else actually has some myriad of pieces and parts that have to be assembled along the way. >> Dave: So, that's both a strength and a weakness... >> Yeah. >> Dave: For Commvault, right? >> Yeah, the opportunity is there to increase the marketing to tell one narrative. >> Kind of Tivoli, same thing, right? >> Yes, same kind of idea there. And by the way, I don't count, let's call them Spectrum Protect now, but I don't count them out. So, Spectrum Protect took a facelift a couple years ago and really got virtualization savvy. They took the, they had the same gap that everyone else that you mentioned had, and, what is it, six, four, a couple years back, they finally got around to that. And then they just announced Spectrum Protect Plus, which is really built for that V-Admin role. So, certainly we've got a good lens there. On the other side, just like in every other generation, you've got some upstarts that are looking pretty good. >> Well funded, some of them paid 100 million. >> Yeah, well funded, some of them I think have kind of a little bit of a puffer fish, right? They feel bigger than they are for the moment, and yet, the tech looks really good. They want to have a dialogue that says, don't start with backup and try to grow forward. Start over, right? Reimagine what storage might look like in the broader range of things. And by the way, data protection is one of the outcomes for that. And so, you put the Actifio, Cohesity, Rubrik, kind of mix, along the lines for that. You also get the... Catalogic stuff that goes into, that's OEM by IBM, kind of gets on the other side. I think that's going to be probably the coolest thing to watch in 2018. So, you hear the buzz words of copy data management. Everybody wants to talk about some version of those three words. We think that the market's going to go either evolution versus revolution. So, evolution is, start with the data protection folks that you know, and those technologies are going to grow into data management type folks. Here at the show, right, so we saw Veritas Velocity. It's their first foray into that. Cloud Point starts to come into that mix as well. So, the idea of keeping all you need, getting rid of it when you don't, and enabling, and here's the fun part, enabling those secondary use cases so that you can get more value out of that otherwise dormant data. Mike talked about that during the day one keynote. I thought he was spot on for that. So, that's the evolution approach. Revolution, start over, better storage, gets you the same results. Those other guys are old anyway... >> So, Bill Coleman's saying, "It's ours to lose." He said that to us on the Cube. They're obviously an evolution play. >> Jason: Yep. >> I've also heard, they've got, they've made the claim, "We've got the best engineering team in the business." Comments? >> So... >> Dave: It's a very competitive market. >> Yeah, it's hard to say best. I never like ultimate superlatives, but here's what I will say. I meet an amazing number of engineers at Veritas who have been doing this 15, 20, 25 years. There's a lot of wonderful institutional knowledge that comes out of that, that you don't get when you're three, five years, even if you come from multiple vendors, and you kind of pop along the way. There are folks that their initials are still in the source code of NetBackup, and I think that gives them an edge from that perspective if they have a vision from an architecture and from a message perspective on carrying it forward and growing beyond just backup. >> Yeah, Jason, want to get your commentary on the customers. So, one of the things we're trying to reconcile here is, they've got a lot of NetBackup customers. >> Jason: Yeah. >> And then they're pitching this new Cloud hyper-scale, distributed architecture world. Are the customers ready for that? Are they, you know, Bill Coleman told us, five years, ten years, maybe five years from now, every single product that's selling today will be obsolete. So, are the Veritas customers today ready to make that move? What are you hearing? Or are they just going to, you know, go to Microsoft and Amazon and, you know, come in that way? How does this, you know, it goes that kind of revolutionary, evolutionary, discussion you were having. >> Good read, so working backwards, I don't think the answer for better backup for the enterprise is clouding. Cloud managed, absolutely. Disaster recovery as a service, as a secondary tier for the people who don't want to have dormant data centers, yeah probably. But we're still going to have a significant majority of infrastructure on-prem that's going to demand for current SLAs to have recoverability on-prem as well. So, I don't think it starts from a Cloud angle. What I do think, from the Veritas customer perspective is, certainly, you know, Veritas is, their homies are the NetBack of admins. That role is evolving. Or maybe I should say it's devolving. You know, you're not going to have backup admins in the same way. Honestly, more and more, we see that data protection should be part of a broader system's management platform management conversation, right? Cause if I'm an IT generalist, that means I don't have a Ph.D. in backup, and I don't want one. I'm an IT generalist, and I'm the one who's responsible for provisioning servers, and patching servers, and providing access to servers. When those green lights turn red, I want to be able to be part of that process and not wait on somebody else. And if I want to be part of the recovery process, it means I better be part of the protection process as well. So, certainly, Veritas is going to have to grow into some new personas of who they're going to be adding value to. IT ops is the big one, right? So, the backup admin is starting to decline a little bit, the V-Admin for the virtualization role is starting to decline a little bit. That IT operations role is really taking a much more dominant share. That said, Veritas's best route to market is to go through the backup admin, and not in spite of because you can turn that backup admin into a hero by saying, "Look, you have a certain set of problems." "Your adjacent peers have a wider set of problems, "and aren't you going to be the smart one "to walk in somebody who can fix "the rest of the problems while we're at it." And that's that 360 story... >> Well, to your point, evolve or devolve, that role. So, we're out of time, but how about a plug for some recent research, what's hot, what's new, anything that you've worked on that you want to share with the audience. >> Yeah, so ESG, we just finished research on real world SLAs and availabilities. So, how are people doing that proactive lens, as opposed to just reactive? Today, earlier today, I kicked off research with the research team on copy data management, so all that evolution/revolution, we're in that right now. And then the next two projects we're working on, GDPR readiness and data protection drivers in Western Europe. Appliance form factors for data protection, so turnkey versus dedupe, is kind of the next one. And then we're going to refresh our Cloud Strategy Data Protection intersection, so BaaS, DRaaS, STaaS, IaaS, and SaaS, and how the protection traction moves. >> Awesome, sounds like a good lineup. I'd be interested to see that GDPR readiness. We'll have to forecast that and... >> That'll be fun. >> And then hit you up after that comes out cause there's going to be some big gaps going on there. >> Yeah. >> Hey, thanks very much for coming back in the Cube, good job. >> Thanks for having me. >> Alright, you're welcome. Okay, keep it right there everybody, Stu and I will be back. This is day two, Veritas Vision. You're watching the Cube.

>> wait. >> Okay, We're back. Live a V M. World twenty twelve. I'm John for the founder's silicon angle dot com. This is the Cube silicon angle dot TV's flagship telecast. We go out to the events and extracted signal from the noise CEOs, entrepreneurs, analysts, marketing people, developers, whoever has the signal, we want extract that share that with you. We have a special guest today. Frank's Leutnant is a sea of service. Now again, I'm John Furry. I'm joined my co host >> of Dave Alonso, a wicked bond dog. Frank, Last time we saw Europe on the stage, you had these glasses on the hat. Remember that, Elwood? So, uh, welcome to the Cube. First time on Thank you. Too many of'Em worlds. I'm sure. A little different angle now. Yeah, Service now. Very exciting. Just went public solving a big problem on DH. Added again? Yes. So tell us. How do you feel? >> That's interesting. A lot of people ask me, how did you end up in, you know, in a in an application software tap a category you spent all this time in storage. The reality is that most of my life, you know, being in the application, development, dusting and system management. So this is actually close to my wheelhouse. Stories was actually a pretty good diversion for me. Careerwise >> service now, relatively, you know, not not a household name but solving that problem. Really, There's no system of record for i t. What activities air doing? Whether it's finance, it's whether it's application portfolio project portfolio. You guys were attacking that whole nut with a software service model. I mean, it used to be a lot of point tools to do that. And you guys seem to be having a lot of success bringing that all to the cloud. >> Yeah, the irony is, is that you look at all the corporate functions, you know, finance, sales, marketing HR, I sort of ranks, you know, last or near last in terms of management sophistication, right compared to the other functional areas, because the most mighty organization have to show for themselves. They helped US management system for their work. For right now, they are to keep track of what's running in their their operation, and that service model is typical of infrastructure providers. Right? You see it, you know, with tell coast like looking t you see it with power. You tell these, like PG and E their infrastructure providers first and the service model. It is not particularly compelling, right? So what we tried to dio it's really take it from a D M V style service model standing in line waiting to be helped. Do you want this more like amazon dot com, where I help myself, It's into it. If it's online, it's productive. It's where I want to go. Teo to make requests as well. Let's receive service >> So you're selling primarily to the organization. Who you sell to in the theory is that the CEO is that the project management offices all the above >> as the servicers management is a very well defined center of responsibility in i t organization. So there's always a group of people who is in charge of that that disciplined. They're easy to find, But CEOs are always involved, and the reason is these air very high profile system rollout because everybody in it is an actor or participant, the workflow as well as the broader employee population, the enterprise, touchy systems, So you better believe that people are sensitive about this being a successful practical and it looks more like a neo system. Dan. It does an infrastructure type system >> without the AARP complexity of it. >> Yes, it's it's a mixed >> metaphor, but so So here are your roughly a hundred fifty million dollar company, you know, annualized, you nice market. >> Either way, we've we've guided to about two. Thirty five, >> thirty five this year. Okay, Great. That's >> want to make sure that their investors don't get >> background. We're sorry about that. Es to thirty five, which is why your market cap about three point six billion. I think >> way had about ninety eight percent growth and buildings in the last quarter. So the high growth, obviously it's what drives >> what's driving that. So how big is the business that you guys playing? What's your tan? >> So we think that the tam just for the narrow definition around service management is a is a multi billion dollar opportunity Because of the nature ofthe work flows, we're also expanding into the operations management area. Right? This is this is where HP lives and BMC and IBM and CIA with these very large open view Tivoli Well, because their work flows between services system management are all becoming integrator that used to be suffered spheres. Not anymore. >> And that's an enormous market. >> It i d. C. Thanks. It's about a thirteen fourteen doing dollar market, and then you have the platform is a service opportunity because our customers have just gone wild, building all kinds of spoke applications on a platform just because they could. So >> you kind of betting on the intersection of systems management, operations, management >> and the platform. >> Okay, and it's kind of jump ball, really, with the dynamic of the cloud coming in, isn't it? In terms of the competitive, it's >> Ah, it's interesting because we look another assassin categories like HR marketing. You see a whole host of players you're looking in our category on the only breakout play there has been serviced now way have predominately compete against legacy vendors, people that I just mentioned. So >> you've got some experience doing that I want >> I want to ask you about the discipline side of the market. You guys are public companies, so yeah, you're out there is all exposed and then talk about some of the product directions because out yesterday they were really showcasing the vision within VM where old way a new way, a access APS infrastructure. You know the classic in the old way. New Way, Modern era. We've been calling it in your world. You're actually replacing some pretty old stuff. I mean, I remember back in the late eighties, early nineties health testing people had that's headsets on and, you know, homegrown software developers and quit a lot of this legacy kind of mindset. So first question is, Is that true? Is there still that much baggage in that services business? From an infrastructure standpoint? And the second part, the question is, what's the new stuff that's really disrupting the market? So in the new way, what is the key features that that's happening in the services industry? >> So, you know, I already started to allude to it, right. So you want to evolve that service model from that help death centric DNP style of service experience to one that's on the line looks more consumer style. You know, the way we've learned from Apple and Yahoo and Google and people like that help yourself. If you have a problem at home with your apple TV, you're really gonna try and call Apple know you're going to go online and you find years of communities you get Teo answers ten times faster, that weight and then following these needy old models the way you reference there is an awful lot of that still living in the world off because they're focuses infrastructure, not service. That's change it, right? I mean, CEOs, I read somewhere, have a shelf life of about eighteen months, right? There's incredible impatience and dissatisfaction with how that function is running. It's costing too much money in the service is not exactly to to write home about. People are really ready to move their service malls. >> The largest answer was, Just hire someone else to do it. That was the outsourcing boom, right? So that's still brought problems, right? Legacy. So how is that still in play? So if the notion is okay, outsource it, and then the outsources has some warts on it that's got to be tweaked. What's the new version? Because you know amazon dot com and you know this new environment availability, instant access, the information we don't service etcetera is that changing it >> way believed that the move to cloud computing is really going to change the role of the CIA, all right, because infrastructure is going to become something that's behind Courtney, and it's becoming less of an infrastructure centric job. CEOs and T organizations become Mohr service engineering organizations, people that understand work flows. People understand how to automate work, flows right out. And, you know, I know how to run a database or a network or, you know, all the security dimensions and so on because we're just breaking as an industry. There just isn't enough competency and skill sets for everybody to be confident at the level that we need to be at structure. It's not scaling, right. It's sort of the way telephone switching centers were in the nineteen fifties >> means one of those things to with the CIA. Attention, I'LL get to that later. But now, with big data in real time analytics is more pressure on the service delivery side. As a business driver, you seeing that pressure as well, or is it more? We just gotta fix it now. I got to do it >> Well, nighty organizations in the lift from one crisis to the next, completely event driven, you know we haven't out its were all over it. Trying to restore service on DH. You know, we sort of live that life day in, day out. But I've never changes right So waken get ahead of this game. You know, if we start structuring, you know, the interaction model that we have with our users how we communicate with them. I mean, simple things, right when you were, you haven't out it. It would be helpful if we were able to pull status. You know, every twenty minutes us to what? What we're doing, What's going on. Right? But having infrastructure be ableto push data out? No, like that. Most organizations don't do that. They live pretty much in the dark, >> so share with our audience out there. That's watching. We have a lot of professionals and data scientists and analyst type audience that we've that we've that follows. Looking angle with Yvonne on DH. Some CEOs as well on early adopters share the folks out there. The pitch, How bad is it that their environment and how easy is it to change? It is just a norther. A magnitude sense of is a turnkey. How do you guys roll in? What's he engagement look like? It's not as hard as the things that most people might have the opinion. I don't want to get just ugly. It's painful or is it not painful? Is it quick pop now? Is it like how fast a roll in and out the infrastructure that you >> the's are extraordinarily sticky systems the system that were that we replace >> your systems of the old systems. >> The old systems are on the reason that they've been around for ten, fifteen years. They're very difficult to replace. And if you look at our girls, that's certainly testament to our compelling. The value proposition has been people have said, you know, a pain is becoming unbearable and be the view of the promised Land is looking pretty good, right? So there's both an incentive to change and to move, and secondly, there is something to move towards that is this compelling inspiring. And it really is going to change my game right, because now we tell people said, Look, if you just tryingto get to a snazzier, more modern help desk, we're not your guy, okay? Because we don't find out a compelling vision of the world. We wantto wholesale transform how you deliver service just >> take us to some of those cats you were talking before you came on about your growth tripling inside. But talk about a zoo company, which is a whole nother conversation. We could talk about it yet you have expertise in, but talk more about the customer deployments. You got some fresh funding with the AIPO. You're geared up. You go out to the market place. What are the conversations like, What are some of the stats and one of the conversation with the CIA? >> Well, the CIA is obviously are interested, first and foremost of the transformation of the service model, right? I mean, we have to get Teo service experience that's more reminiscent of people experience on the consumer side. Now we typically have to do that, that an economic equation that's very similar to what they're having right now. They're not interested in spend more. They just want to get completely refreshed, you know, platform for similar amounts of money that they're already spending because Versace, you know, we're not just taking the software, not off the after after table. We're also taking the entire infrastructure, all the operating staff, everything it takes to run that environment becomes ours, right? It's no longer in the I T department, so that looks pretty compelling to them. >> How about some of the numbers in terms of uptake with customers recently? What's the growth rate was? Can you share some numbers? >> Way have about twelve hundred price customers? We had about one hundred twenty seven the last quarter. That's that is a huge number of customers. Tio Tio ad we have. Most of our focus is on global two thousand enterprises. We have about two hundred thirty global two thousand enterprises, and they're all you know who's who names that, that people recognize Starting up Ticket's been been strong. We're running very, very hard to make sure that we have two services infrastructure. Both there's people and infrastructure to be able to accommodate that. >> Well, I'm excited to interview you because I want to ask you kind of more of a personal question. And although we just met for the first time here, your name's been kicked around as kind of a maverick operational executive who knows how to scale organization. So we're in kind of living in an era where the business value focused, whether startups and has been a lot of talk about, you know, the Facebook idea, the young kids under thirty running a billion dollar market gap, companies trying to actually move from hyped to real scale. And Palmer. It's made a comment yesterday kind of dissing Facebook of in terms of the value proposition relative to say, you know, bm where. But the question I want to ask you is, um, what's your success model for scaling an organization on DH for the younger execs out there? And for people who don't know you just chairs up on the camera? What's your philosophy as the repeatable sales, lower cost leverage model? I mean variety of different kind of ingredients. What's the Franks Lukman formula for success and scaling? Bringing a product to market and growing it? >> Well, the first order of business for for a start up venture of any sort is growth. I find that a lot of people come on a business school in trying to balance girl for profitability. Um, that mentality makes no sense to me, right? It's economics. Before accounting, accounting becomes the bastardization of economics, we run our ventures cash on booking their economic concepts, not accounting constructs, right people are trying to show profit prematurely when they can invest that money to grow. We tripled our head count over the last year. We got very far over our skis. No, we're burning a hole in our gas pals but were very clear with investors that look, we are still increasing our productivity for head. Why, when we apply to resource is to grow this franchise Growth expands our multiples, expands valuation. That's what everybody is in the business for, so so sort of summarize. Knowing your question. Most people hold back on growth, and they don't really know why they're not all out trying to drive growth and the reason that growth is so important. You need to be a breakout player. Nobody wants to be the in between player. That's neither fish nor fowl and doesn't become a dominant entity into space that it wants to be in >> and have the financing in the dry powder behind you that you were a venture capital Greylock, which no something into about investing. So that's also important part right? >> Well, you don't. That's why I said to you manage on cash you managed on bookings. Those are the economics in the business essentially, >> and you've been looking up, have some really good finances behind you, trust you who get the concepts and that's key well, continue in the right >> way went public. We also explain to investors Look, this is what we're trying to do, and this is what we need you to buy into. Otherwise, find somebody else's talk. So >> what is the going public affect? You know the perception amongst the CEO's when you chose to list on the way we had them on earlier this week? But how is that affected? The brand perception? >> That was the whole reason for us to go public, right? We didn't need to cash liquidity. Obviously, it's good for employees and investors when I pose fundamentally a branding event. You know, I used the analogy. We went from playing on Saturday to playing on Sunday. You know, all of a sudden you know you're transparent, you know, all the all the thud that gets spread about you by competition. People cannot punch you up on Iand. See what the truth is around your balance sheet. You know how abot your last quarter was? It's been three. I po was tremendous for us from a branding standpoint, >> and you've been known Teo have a reputation of really getting the product in this case, the service, right? And then really getting aggressive on the sales side. Can you talk about what you've done in the sales side? I know you've aggressively hired. >> Yeah, we You know, as I said, we tripled our head count. We went from three shells. Reasons to twelve insight. One year we spread out all over Europe today. This is a ground war. You need an army to fight it. This is not Facebook. We cannot sign up annoying people in a week. It is a business that runs over the ground so you cannot scale and drive growth business unless you have two people to run it. >> And you're selling belly to belly. That right? Absolutely. So you know, >> we're going through the front door of the elevator >> way. Okay, We're getting the hook here. We're getting hooked, but I have to quit final questions. One is just put a plug out there for service's angle dot com that Silicon Angles separate publication. We launched last year, thanks to E m. C. For helping us sponsor that but really dedicated to the new era of services. And there is some disruption. We're excited to cover you guys, so I just wanted to say Go, go check out sources angle. So Franklin asked two questions. One. What's the big disruption in the services business that most people aren't getting right now? General, you know, man and tech on the street, not the insider inside the ropes. So that's the first question. The second question. What's your goals for the year? For the business? >> Well, the interesting thing about the services business is how it's one of these areas that is sort of the least automated. Write. It runs on the concept of institutional knowledge. Phone conversations, informal communications, email and the frontier in service management is that those become software automated structure processes that is not just happening in I t able sticks. It's happening everywhere, right? What do you want to request? Food. You know, from the hotel you knew what a Virgin America, right? You know, request from your seat, something that's just, you know, on an example of how >> that's the story, you know, debate about that. >> That's how it's gonna go, right? So services it's going to become, really that I call the service fabric right? Essentially how thes processes get conducted. So we're super excited because our platform sits right in the middle of that trend and we're going to try and make that trend. >> It's eleven. Platform to the economics are fantastic and no real customs agents were brought up exactly so good margins. >> And it's just >> like the stock immediately. >> It's much more scalable in the district. Disintermediation. You know, all the all the manual effort goes into this. >> Okay, so now I know your public CEO and everything now, so you really can't be as wild as you could have you a private. But what's the outlook for year? Your personal goals for the year >> Wait, given guns from or get one quarter for years. So check with your favorite analysts. >> Okay? Growth is on the horizon. Congratulations. Frank's been great to have your leadership in the Cube. Thank you. Time Cuban great to have you. This is silicon angle dot coms. The cube will be right back with our next guest, Cynthia Stoddard from Netapp CIA, Another CIA. We're gonna get into the trenches and hear about the transformation again. We'LL be right back