 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 Vellantem here with Justin Warren, who's my co-host. Simon Robinson here is the Senior Vice President 451 Research. Simon, it's great to see you. Thanks for coming to theCUBE. Thanks for having me. So this is your, is this right? Your first Veeamon? It is, it is. First Veeamon, first time in Miami, first time on theCUBE. So, book it list, check. Hey, gotta give you a sticker here then. There you go, thank you for coming on. So, and of course you got the Veeam party tonight, which you may have been to some other Veeam parties at other shows, but you know. I know them by reputation. Yeah, they're good. And so, looking forward to that. Two days, what have you learned here in the last couple of days? What are your impressions? Yeah, so my impressions are that this is a conference that reflects the type of company that I think Veeam is. And Veeam's kind of a little bit atypical for a company, 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, real grassroots innovation. And you know, 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 you know, we heard about, you know, Ratmeer talking about innovation. You know, in 451 research, we're an analyst firm focused on understanding the impact 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. No, not just you have to be in the kind of the right place at the right time with the right products, 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 got that at the grassroots level the kind of, you know, the Veeam admin level, you know, 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. I mean, to have, you know, a general session with eight demos. And they all worked. They all worked. I was terrified when they wheeled out the tub of water. I was like, there was all the laptop in there, but hey, you know, it was awesome. And I think, you know, Ratme is talking around, you know, the kind of this being act two of Veeam's journey and Veeam's story. But firstly, let's kind of pay tribute to what they did in Act One. I mean, I think for any company to, you know, to build a billion dollar revenue business software is a phenomenal achievement. But to do it in the kind of data protection space. Yeah, great. I know it's even more so. It's like the most boring thing ever. And it's, and they've kind of made it exciting. You know, they used to say that, you know, backup was, well, I used to say two things about backup. Firstly, it's insurance policy. And secondly, it was the one part of the IT environment that even storage people found boring. Yeah. Sorry. But I mean, I mean, just see the kind of energy, enthusiasm, passion of the folks here. That really isn't the case. It's been one of those boring but important factors. And then Veeam's ascendancy, I've said this many times, is sort of coincided with the birth of virtualization. Yep. You were consolidating, you know, physical servers and because they were underutilized, but then the backup had to be completely rethought, right? Because you didn't have enough, you know, bandwidth 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 got Act Two, which is cloud. And I feel like it's jump ball. They use a, you know, U.S. basketball analogy. No idea what that means. Folks who don't follow basketball. 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 is calling Act Two and draft from Act One? And what are the key factors? What's the tailwind for them? And what are some of the headwinds? Certainly competition and 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 characterize their strategy as being a hybrid cloud strategy. But they're really struggling with actually enacting that and doing that in a kind of, you know, in a process organized, deliberate way. You know, we kind of got a lot going on in the kind of multi-cloud world. But multi-cloud is often an accident rather than something deliberate. It just turns out that they've got all of these assets across all these different properties. Oh, I got all these clouds. That's right, that's right. And, you know, again, go back a decade and how sort of relatively straightforward the data and application environment seemed, right? I mean, you had your application, it was probably on-prem, it was running on a server that was connected to this bit of tin and... Little did we know at the time, but yeah, right? And, you know, fast forward to today and data is just, you know, 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 kind of 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 that data environment now than they used to be? Or is it actually getting worse because now it's a much more dynamic and disparate kind of environment? And 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 kind of a wakeup call that, hey, your data is your responsibility, right? 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 wakeup call for organizations, certainly in Europe. And I think we're going to see that kind of replicated across other regions. 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. You've been talking about the shared responsibility model, I mean, to your point, Simon, right? I mean, it's like security, right? I mean, somebody misconfigures an Amazon, I mean, you know, EC2. That's right. That's right. Not Amazon, it's a shared responsibility and the same thing with GDPR, malware. It really is. But I think, you know, when we think about what the major challenge is that any, 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 overused term, but. But it's real. It is real. And our research, we asked a question in a survey recently, which is what is your organization's kind of single biggest barrier? And it's, we don't respond quickly enough to the business. Right? 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, it's across the infrastructure. But it's also across data, right? And it's modernizing, it's transforming the way we think about, you know, managing data. And it's, we don't want to kind of repeat the mistakes of the past and end up with, you know, a zillion silos that all have, you know, a person that needs managing that silo, that environment, we've done that. We don't want to, as we move to multicloud and we acknowledge that data and applications are going to be in a greater diversity of locations. We have to have a model at 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 that. Yeah, so given that there's that awareness and there's a need there for the market, so there has been a refresh in data protection in that part of the industry, nothing much was happening for probably a good 10 years. Data Domain was kind of the last big disruptor 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 kind of challenge for customers happening and this dynamic market, wait, how do you see the market dynamics evolving as we go through what Veeam calls its act to and then people start moving to this hybrid cloud? What does that look like from your research? I think from a customer 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 lockstep with the business, right? Those are the companies that feel like they can, they have a good handle on this digital transformation, data transformation. And we do see a bit of a, you know, almost a kind of a schism opening up. There was the kind of digital leaders and the definitely digital laggards that are really, really struggling with this. And I think, you know, 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, you know, data protection specifically, yeah, it's, if you'd have said 10 years ago that there was almost a kind of a Cambrian explosion of startups and new companies in backup recovery and data protection, DR. You know, that sounded like madness a decade ago. You know, we're seeing 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, because all these new entrants, none of the incumbents are going away. But I think, you know, it's going to be very much a kind of a partner centric kind of success. That they, there's a realization I think from, certainly from the kind of 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, you know, 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. Yeah. I mean, VTL in the cloud. Hey, the legacy processes, they're hard to kill. 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. I was in London a couple of weeks ago for the AWS summit and Matt Garmin, who's AWS executive, I think he's the guy who first launched EC2 as a product manager at the time. Now he's a senior executive. He said, we believe the vast majority of customers will eventually migrate all workloads into the cloud. And then it was, but, you know, and this is a but that they wouldn't have acknowledged two years ago, we realized that it's a hybrid world. And then they talked about snowball and outpost and all these other things that they're doing. So, and Microsoft has always had a different posture. Of course it is 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 startups coming in. It's been over like a billion and a half raised for data protection. But so you got Veritas, Dell EMC, IBM, that's kind of Tivoli business, it's done some stuff with catalogic. And then you got Cohesity and Rubrik trying to get escape velocity. So they get tons of cash, having big parties, trying to replicate that marketing momentum. And then you got Veeam, like his, 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 you about me this morning and they're actually cash flow positive and on gap basis as well, they're making money. There's nothing more atypical than like a startup company that's making money. And you got specialist, you got like Dhruva in there and Zerto. You got Zerto. You got a lot of guys. A man has just got taken out by Cohesity. So how do you guys see that competitive, market shaking out? Dave Russell 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 IPOs in the future. Before the window closes, it's getting hairy. It is, and certainly some of those incumbents are not without having their challenges. I think it's incumbent on them to kind of listen to what customers are asking for. Customers are moving to the cloud, right? They're going to do that with or without the kind of the legacy guys, right? So they have to kind of get on board with that and help manage that process for customers. I think what I like about some of the newer guys, the rubrics, the Cohesities, is they are talking about this bigger picture, this issue that said at the start that many organizations acknowledge 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 kind of crack that on a holistic basis. These guys are putting together some compelling stories and 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. I mean, we've heard simplicity so many times on 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, customers overall, but lots of Veeam customers, every single one says, I love the simplicity. It works, it just works. It's these kinds of things that they really do matter because not just because it just sounds great, but actually 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 professionals 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 kind of a human capital intensive process in the past. Yeah, 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. 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 starting with backup. It actually is all about the backup and you don't hear that from a lot of the upstarts like backup, it's all about the data management. It's this sort of vision. These guys use the term aspirational, almost as a pejorative, so it's kind of interesting to see that competitive battle. And then you got the legacy guys trying to hang on to their install base, maybe making some announcements. I mean, Dell EMC just made a bunch of announcements and it kind of came out and admitted, hey, we took our eye off the ball. Obviously Veritas is a huge install base. Everybody's trying to attack. Yeah, IBM is a new CEO at Commvault. So Commvault, I don't want to leave them out of the equation, right? 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. Right, the challenge is that this isn't a homogenous market. 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 as soon as you start getting into the details, that's when it starts, the market starts to kind of stratify. Cloud and new programming models. Yeah, right. Object storage comes up and we've got no SQL databases. Micro-services, 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 seeing how Veeam's story kind of evolves there. But if we do accept that, containers Kubernetes is going to be the new kind of middleware that connects new breed of infrastructure to a new kind of application paradigm, if you like, then that's going to need protecting. So I think, we talk about it, backup has been 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 just the importance of DR. And that's absolutely reflected in our research when we ask about what are the big challenges in the kind of storage and data arena. DR is a top two challenge every single time. It's too expensive, it's too difficult to kind of 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 downtime for any sort of application, right? It just becomes a prerequisite to have applications always online. That prerequisite for effective DR is going to continue. Okay guys, we got to go. Thanks very much, Simon, for coming on theCUBE. It's great to be here. All right, keep it right there, everybody. We'll be back with our next guest. You're watching theCUBE live from Veeamon 2019 from Miami. We'll be right back.