 From around the globe, it's theCUBE with digital coverage of VeeamOn 2020. Brought to you by Veeam. Hi everybody, this is Dave Vellante and you're watching theCUBE and our continuous coverage of VeeamOn 2020. It's the VeeamOnline version 2020. Of course, we've had a pivot to virtual, Bill Largen is here. He's the CEO of Veeam and Jim Kruger is the Chief Marketing Officer. Guys, I wish we were face to face, but you know, this'll do. So thanks for coming on. Yeah, the next best thing. Thank you, Dave. Yeah, thank you, Dave. Glad to be here. Well, first of all, Bill, I got to congratulate you. It was the first time really we've talked, you know, blockbuster acquisition, inside capital growth minded, awesome, you know, private equity. So congratulations on the new role and, you know, best of luck. Hey, well, thanks very much. Greatly appreciated. I've been with the team since bounding in 2006. So it's a, well, it's a new role. It's a good older team that we're very experienced with. Yeah, indeed. You know the good, the bad and the ugly and you know where the skeletons are buried. You know where to take the ship. So we wish you the best. And then Jim, I got to ask you, I mean, everybody says, okay, it was a really hard decision to go to the virtual. You actually had no choice, but maybe the harder decision was, do we postpone or do we go forward? You guys chose to go forward, which I think is the right call. And I'd also think it seems like you're taking the approach of, you know, we're not just going to try to plug the physical into the virtual. We're going to think about the halo effect and really keep this discussion going. But maybe your thoughts on that pivot to the virtual. Yeah, yeah. It didn't take us too long to decide. And we felt rather than postponing it and trying to do a large event before the end of the year, which was not really realistic. We decided to go with the virtual and actually just a month after for the most part after what the real event was supposed to happen in Las Vegas. And yeah, we're really looking at it from, you know, keeping the discussion going with our customers, keeping them updated. We're going to be highlighting some of the new releases that are going to be coming out, making some key announcements. And it actually gives us an opportunity to draw in more of the crowd from around the entire globe. I think we have 148 different countries that are represented. So, yeah, it's a, I think a new platform and I think it's working very well so far. So Bill, you know, you came into this role and immediately you're dealt with a pandemic. And I want to sort of talk a little bit about, you know, how you're dealing with that. And we'll get into maybe what you're seeing in your business. But, you know, in a way, there's a silver lining here because it really kind of forces change, changes you said in your keynote as a constant. But you know, you might have, you know the business obviously very well and you might have had some gut feels as to where you wanted to take it, but change is hard. But boy, everybody has to change now. So in a way, that's sort of an accelerant to change. But your thoughts, what was your first move out of coming into this pandemic? Yeah, coming into the pandemic, it was one of making sure we understood what the issues were, getting people home and in safe working environments. So our big move was that some of our team had a desktop so they did not have laptops, which made it a little more cumbersome multi-screen. So it's really a physical activity to have moved these people. So we moved our whole team 4,300, about 1,300 or so of those people our employees were already working out of their house. So the big move was, let's get them home, let's make sure they're efficient, good connectivity. And with that, we were off and running. I don't believe we missed much of a beat at all, considering we started this really mid-March, we were finishing our first quarter, which came out right about on plan, which we were really excited about. So that was the first move I would say we make. A few more to go, but the big first move. I want to share some data with you guys if you bring up that first slide. This is data from our data partner, ETR, every quarter we go out and we talk to customers. And this is a survey of over 1,200 end practitioners, buyers. And they're about 120 or so Veeam customers in there. What I'm showing here is data, the gray bar is data from a year ago, April 19 survey. The blue bar is January 2020 and the yellow bar is the April 20 survey that was taken right at the height of the lockdown. And what this is showing is customers that are spending more by the percentage of those customers that are doing business with Veeam. And you could see at the gray, it was 50% it dropped slightly to January. Now it's back up in the height of the lockdown. And so what you saw is that new adoptions and people spending more, i.e. more than 6% is actually up since the pandemic hit. And Jim, I, or a bill rather, let's start with you. I wonder if this is what you're seeing kind of in your businesses, a little bit of an uptick, not all businesses obviously are seeing that, but seems like yours is. Yeah, our April was up just amazingly so. And I think it allowed us to get the transition out of the way at the end of March while also closing the quarter. But yeah, we had a double-digit gain in April that was extremely nice way to start out the first month of the second quarter. So that's exactly what we're seeing, very positive activity. And you know, I think that if we talk about, Jim, some of the data that you showed in your keynote, you talked about some of the challenges that your data showed, you guys get this new survey and we'll talk about that, the data protection report. But what stood out was cyber threat, the number one challenge that came up. And I often say that the lines between security, cyber security and data protection and backup and recovery are really starting to blur. You guys aren't known as a cyber company, but increasingly people are thinking about data protection and backup and recovery as part of their overall cyber strategy. Yeah, yeah, I agree. And I think from our most recent release, version 10, we've built in some new capabilities around ransomware protection and cyber security. So yeah, I would say those lines are blurring, but we're definitely not a security company. Although, as you mentioned, a backup definitely provides that security and customers want to be able to do scans prior to putting things into production. And that's some of the new capabilities that we've provided in our latest version. Well, I mean, and cyber obviously has expanded, has become a board level topic, as you well know, it has been years. Later on we're interviewing Gil Vega, who's your newly minted CISO. And you're seeing that role expand. It's not just sort of off on the corner, okay, it's IT's problem or it's the security SecOps team's problem. It really is, the tongue in cheek is it's a team sport, but you really have to take a broader view of cyber, don't you? And especially Bill, given something that you shared in your keynote talk, you shared some IDC data, a 5x increase in Zettabytes over a seven year period, I think 33 in 2018, up to 175 in 2025. And I've taken bets that IDC is probably low in that number. Yeah, yeah, probably low. Well, that's what we're seeing. You brought up a good point. It's Veeam's evolution into a much larger entity and protecting many more customers, well over 375,000 customers. And that's bringing Gil Vega on our CISO. And a major step for us to focus on external and internal threats that exist out there. So major activity for us in bringing Gil on. So you're right, our growth, we think that's where growth continues to evolve is we have our customers and what we're trying to make sure we do is we protect them, which talk about security, it's a little bit of that, protect them and then make sure they have access to their data. And same with our employee count, what are we trying to do in back to the COVID-19 issue? Is that we're trying to make sure we protect our employees as well as make them productive in this whole process. But the cyber threat is clearly playing into the security. Well, Bill, staying on the COVID discussion for a minute, you talked in your keynote about, there were three things that stood out there, the resource management, security and governance and digital transformation, all very relevant in the context of this pandemic. My question is, can you add some color as to Veeam's role in those areas? Yeah, well, clearly in the governance piece of it that's built in our product and orchestration and all the product offerings that we have, our primary concern does go back to protecting data and making it accessible. So I think that's where it's the most common place for us to see our focus has been not security. As Jim said, we're not a security company, but it's really availability, data availability and it's data availability throughout any platform back to the hybrid cloud conversation we talked about is that we want to make data available over hybrid cloud. And I think with the COVID-19, it's showing that the cloud-based activities are going to be more critical versus in addition to on-prem. So that's an answer to that one. So Jim, I want to ask you about something you talked about in the keynote, which is the data protection report. I referenced it earlier. Tell us a little bit more about this study. You guys are like I am, you love data, but what was that study all about and what were some of the key takeaways? Yeah, so just a few months back, so it's fresh off the presses. We surveyed about 1500 IT pros across the world and wanted to just get a good feel for where their head is, what are some of the key concerns they have. And so we kind of bucket it into three key areas. One was around downtime threats, which you talked about the security and ransomware threats is definitely top of mind for customers. We also drilled down a little bit into the move to the cloud and then also digital transformation. And what's clear is that, I think in the past, people thought that their most important data was the only data that needed to be protected and we're seeing some compression there relative to customers thinking they need to basically protect all data. So the difference between sort of the critical data and just normal data is really blending together. And so they're looking to drive efficiencies from that perspective. And I think about 49% of the customers are backing up to the cloud today. So that's a pretty good number, but that jumps to I think around 76% in two years of customers who believe that they'll be using the cloud for backup. And then on the digital transformation side of things, I don't think there's a company out there who doesn't have some sort of digital transformation initiative, but they are struggling a little bit. They're struggling with the resources that they have and those resources being competent to really take companies in a new direction because a lot of those resources are focused on existing projects and keeping the business up and running. So that's a key area that they're looking to like free up resources to focus on digital transformation. And then we get into some of the benefits that they're seeing from that and so forth. So yeah, it's a good all-around report to really understand the state of the market. I want to stay in this survey for a minute if I can and then have Bill tie it into the company strategy. One of the other things that stood out was one of the blockers, if you will, the customer cited, they said lack of skills, so talent shortage, legacy IT or maybe that's technical debt as well, and then budget constraints. And so, I mean, kind of, those are good blockers for you guys, you simplify, the old, it just works. You've been amazing at maintaining relevance, you're whatever, a 10 plus year old company, but you're right there with all the upstarts and the big portfolio companies and then, of course, budget constraints. I was talking to Anton earlier, just really focused on the economics of protecting data, but maybe you could add some color to those sort of things that the customers referenced as their challenges to moving forward. Yeah, yeah, so you mentioned one big one, which is skills. So I think training and education is definitely, it's certainly one of them. I think from Dean's perspective, we definitely help in all of those areas because our solution is easy to use, easy to manage, easy to deploy. And so, when you look at the resources in comparison to some of the legacy solutions that our customers have, they're typically able to save a significant amount on the budget side and significant amounts on the resources, they just simply don't need as many people to operate a Veeam backup solution, so they can redeploy some of those resources into other areas, which has been definitely an attraction to them. And you mentioned the IDC data that Bill talked about, but that's one of the reasons, if you look back in the second half of 2019, we actually grew three times as fast as the market average, I think mainly because of that. And a lot of people are switching from their legacy over to Veeam because of those reasons. Yeah, so Bill, I want to tie that into company strategy. You guys have been sort of unapologetic about the core, which is backup, and it's kind of, obviously recovery is part of that, but there's a lot of discussion around data management, trying to sort of expand the notion of the TAM, and you guys obviously participate in that as well, but it's sort of three things, protect, manage, and transform with some of the things that you guys talked about in your keynote, but the core is protect. You're all about backup, recovery, data protection, the examples at GNC, for example, and some of the other keynote discussions were all about protecting some of that core data, but then you get into management, which is that sort of TAM expansion, if you will, and then the transform. You know, I think we get the protect pretty well. It's the manage and transform that sometimes is a little bit more opaque to people, but I wonder if you could sort of add some texture to that. Yeah, well, we've always had a very, our focus has been on the protect side and the manage transform is key pieces that we've added on over the time period. So we want to play in that bigger TAM, that bigger market, that cloud data management market that says 30 plus billion dollar marketplace. So I think you'll see, and that's where we've expanded, but those 365, all those 365 are protect category. So it is one of moving on up into that, but we will stay with that core piece of our business on the protect side. It's extremely important to us. We stay focused, it's allowed our development team to stay focused and bring forth products that we believe are superior to any of our competitors and we'll continue to move that way. So, Bill, I mean, Veeam has always been known for punching above its weight class. I mean, the very clever naming of the company, the renowned parties, et cetera, et cetera, et cetera. But now, you're a top dog now. So maybe the strategy is to continue to punch above the weight class, which would be a great thing, although you're now a mainstream, you know, 375,000 customers, you're adding at a very, very rapid pace. You're a big dog now. What can we expect going forward from Veeam? Well, you know, a big piece of our change was our universal licensing. So we want to make those license portable, take them with you, be able to use them in a different setting. So I think we'll work on always punching above our weight. That was really started with our founders, Retmar Timbyshev and Andre Berenoff. We clearly were number one. People might not have believed that in the beginning, but we grew right to it. So I think you'll see us with more product innovation in that space and working very aggressively to take command of the multi-cloud environment. Well, you know, your business practices have always been pretty leading edge and forward thinking. You mentioned the flexibility and from licensing, you know, that's something that you're known for. Even partners, when I talk to your partners, they say, oh yeah, you know, Veeam has made it very simple for us to do business, not worrying about so much about who gets paid, where they've sort of made that transparent. So you get very high marks for that. And so there's a, you know, you're known for your tech, you're known for the products, but there's also some innovation on the business model side as well, isn't there? Absolutely. Our partners, a significant number of partners have been with us a long time. We do like to make sure that everybody in that distribution channel, and we are two-tiered distribution, makes good profitability. And keeping it simple becomes more challenging. I think the larger you get, we work very hard at making it simple. And it takes some time, a little bit of iteration for us, one of our core values, innovate and iterate, is to make it simple and to keep it that way. But we want our partners to be comfortable working with us in making good economics and knowing that we're gonna bring, we're gonna bring that roadmap of products into them when we get our products ready and they are the products in the marketplace that you put us in any situation in the lab. We're going to work, we're going to work first time. We're going to work well for them, so. Jim, I wanted to ask you about some of the customers that you referenced in the keynotes. I mentioned GNC, you guys showed a video of that. It was pretty cool. It was interesting, Hero Motor Corp, they call it, they don't call themselves a motorcycle company, but essentially what they are. And then IBM Cloud was really interesting to see them in there, IBM is a partner, they're a customer, I guess, they're a competitor on one side of the house. So that was kind of an interesting example. Some of the customer takeaways can share. Yeah, yeah, so when you look at GNC, some of the things that they referenced was a six-figure ROI over a three-year period. And again, that was one of the key drivers as to why they went with Veeam again, just more efficient. And yeah, Hero Motor Corp, very interesting, they're the world's largest manufacturer of two-wheel vehicles, and they do produce a motorcycle every two seconds. They've produced over 90 million. So they're a large organization, I think they have close to 10,000 employees. And Veejay Sethi, who is their CIO, among other things at their company, you know, as you heard, he talked a lot about how they're managing through COVID-19, and he really is a big believer that number one, you got to take care of your people and make sure that they're safe and make sure that they're set up so that they can work from home and so forth, but then also really planning for, not just managing through the crisis, but also preparing for recovery, which is really important. That was some of the advice that he gave, of course, to the attendees of Veeam, which I think is really good advice. And then IBM Cloud has been, yeah, they've been a great partner and a customer for quite some time, we're working very closely with them as backup as a service. They're leveraging kind of the full suite of Veeam products and getting great traction. And as we saw from some of the data, backup as a service is going to continue to grow and be a great opportunity for both IBM and Veeam working together. Well, guys, exciting time for you. I mean, I, like many people, I first bumped into Veeam at a V-Mug. Who, that was years and years and years ago and to watch your ascendancy has been pretty astounding, great products, a very well run company, good vision and just awesome customers. So, Bill, you're on deck when we get to 2030. What do you want this to look like? Well, Veeam ought to be multi-multi-billion by 2030. That's a long way out. It'll be interesting in the transformation that is made and we'll see what happens really globally with the whole work from home, how that moves, how office space plays into it, product innovation and delivery. We think we're at the forefront back when we started in the virtualization space back in 06 and brought forth some really creative project products. I think we'll continue to continue to see that. So what's 2030 bring? Yeah, multi-billion and we're going to continue to add employees throughout the world. We've got over 4,300 employees as I mentioned keynote that are in a multitude of countries and it's just an absolute thrill to be part of them and help us work as a family organization and building and bring good products. Well, we really had a great deal of fun following Veeam and participating in the Veeamon and really appreciate you guys having us here at the digital event. So thanks guys for coming on and sharing your insight. Yeah, thank you very much. Appreciate it. Thank you for watching the cubes continuous coverage of Veeamon 2020, the virtual digital version. Keep it right there, right back right at this short break.