 Live from Las Vegas, it's theCUBE. Covering VMworld 2017, brought to you by VMware and its ecosystem partners. Hey, welcome back to theCUBE. Live from VMworld 2017, day one, I'm Lisa Martin with the co-host Dave Vellante. Very excited to be joined by our next guest, CUBE alumni, Peter McKay, president and co-CEO of V. Welcome to theCUBE, welcome back. Great to be here. Thanks Lisa. Good to see you. Hello Bostonian. Yeah, all right, good to be here. Now look, it's so good right now. It only matters how it ends. That's true. Yep, until October, it's not over till October. Not over till October. So some good news. You guys were just named a leader in the 2017 Gartner Magic Quadret for backup and recovery. What is next generation availability for the enterprise that has to be always on 24 seven? Yeah, you know, it's a category, we call it availability and now kind of the market has adopted this availability label term. And it's really around any application, any file, any service, access to your data at any time. So it's always on, always available, seven by 24, 365. And more and more companies need to be always on. And so it's not used to be, it's just about backup, backup. And you can back up a hundred times, but it's about the recovery, the time to actually get back up. And so that's becoming a bigger driver for a lot of companies. They need to be always on. And so this category of availability is what we focus on. Everybody at Veeam wakes up every morning thinking about how we can help our customers stay up and running and always on, always available. From a buyer's perspective, are you seeing this elevated to the level of the C-suite or are you still talking more with some of the guys and gals in IT or at lines of business? So I would say if you asked me two years ago, it was definitely IT centric. More and more as you start to see British Airways, I mean almost every day you're seeing another outage, major outage of a service or access to data or Australian Internal Revenue Service equivalent being down for a day. It's starting to be a bigger issue. And CIOs, CEOs, it's a major focus here, not just for the cost of the revenue, but also just the brand associated with it being down. With new buyers, is new millenniums and people always on access to devices, if you have a shoddy service, they're going to go elsewhere. And so more and more companies are focused on that being a differentiator for their business and that's why it's elevating up the C-suite. I've personally been sort of getting more knowledge about Veeam in the past six or seven months. We had you guys on at HP Discover in London and then of course we did Veeam on. You were at Pure Show, we were at the Nutanix Show, the HP in Vegas. And I just recently presented to your alliance team back in Boston, so kind of getting a feel for what's going on. We're going to be an expert in Veeam. I am starting to. So one of the things I'm noticing is you guys are moving up market, getting into the enterprise, talking a little more, CIO, CXO language. So I want to challenge you on something Peter. And you've really brought in a lot of that new branding and messaging. A lot of people talk about digital transformation and to us digital transformation is all about how well you leverage data. So in your mind, is that a viable sort of definition if you will and how is Veeam helping its customers particularly up market leverage data? Well, I mean, more and more companies are leveraging data on almost every aspect of their business to drive new markets, to drive new products to market. And so the importance of data in this digital transformation, they call it the currency of digital transformation. And so the more that data is growing in its importance, the more the need for accessing that data and to have that data always available for you to make faster, quicker decisions is only growing. And so not only is it the size of data, but it's the ability to access it at all times in any location, on-premise, off-premise is becoming more and more because of the importance of data, right? So the applications need to have access to it, decisions. I mean, I look at our business, more and more of what I do every day is off of data we're accumulating for and how we drive our business, how users, how people are buying, how we can market our products better. So if we're just an example of what we're seeing not just in the enterprise, but in that medium-sized business as well where data is becoming a crucial differentiator in one of the leading movements that kind of drivers of digital transformation. I was going to ask is that the underpinning of your enterprise portion, what you're saying is not just the enterprise, it's the small businesses as well, which was, it really was a simplicity, which was the attractiveness to Veeam historically, but you're saying that's changing and it's becoming a data centricity. It is, I think, as the importance of data, but it's not just the accumulation of data and the access of data, but it's also regulatory and security is also driving that, right? You need to, with regulation, GDPR in Europe is becoming a bigger issue, right? And so how are we managing that data? What are we doing? Are we in compliance or not with that data? Making sure that data is secure and you can back up if there's ransomware. So you look at a lot, as you accumulate this personal identifiable information on people and your customers, the protecting of that data, making sure that that's always available and you're in compliance, it's just growing in importance, which has been a major driver for the growth of our business over the past couple of years. You talk about that growth, I mean, what kind of metrics, you know, your private company, but what kind of metrics can you share with us about recent growth, recent quarters? Yeah, so we're growing at about 35% year over year, so that's been kind of consistent over the past two, three years. We have 256,000 customers, we're adding about 4,000 customers a month, you know, small, medium, and now larger companies, so the growth continues to drive, all that is through our channel organization, our alliance partners that we've continued to add. And so, you know, steady up and to the right has been our business. As you've said, your stake in the ground is a billion, right? We're on track, our goal is, you know, 800 this year, a billion next year, and 1.2, 1.5, and 2020. That's, we're well on our way. So speaking of partners, you were a VMware guy for a while. Yes, I was. We were talking about that, and you've been with them for about a year or so. Year and a half. Tell us about what was the theme that we've had for the last couple of hours is that, you know, data protection, backup and recovery is a hot topic, something that you've probably seen evolve over time. Tell us about some of your thoughts on some of the announcements today that VMware has made regarding helping customers migrate to the cloud around data protection. What are some of the things that excite you about working with VMware? Well, I think most companies have a hybrid strategy, right? In that medium, you know, definitely small is moving to either buying things, buying applications in the cloud, or moving more off-premise. You know, that's in the SMB market. Anything above that, it's a hybrid story, right? There's some degree of, you know, there'll always be an on-premise, there'll always be kind of a cloud component, and we're seeing a multi-cloud component. And so, you know, the announcement on VMware cloud on AWS is important. We're the only solution that is ready to go from a backup and recovery, from availability perspective. So that was a, you know, VMware's an incredibly important partner for us. So announcements around anything data protection is critical because we built our business on the back of VMware's virtualization and vSphere. You know, so whenever you talk virtualization and data, that's Veeam. But also, you know, security in moving, allowing that flexibility of moving from off-premise to cloud solutions. I mean, that's music to our ears. That's a big part of our, of what excites me about the VM world in 2012. 27. Your thoughts on the market? I mean, it's on fire. VMware is booming. The data center is smoking hot. If you look back, take your VMware experiences, look back two years ago, VMware as a company was under fire. It's licensed revenue was, you know, down, you know, 1% to flat. Now it's growing, you know, 10 to 15, 13% I guess is the latest quarter. Cash flows, you know, cruising, the stock's doubling. Is this in your view sort of a product cycle thing, you know, updates of ELA's? Or is this a sustained recognition by the customer base that not everything is going to go into the public cloud that we're going to bring the cloud operating model to the business? What's your sense? Yeah, it's a great question. I think a big part of this is, I do think it will be a sustainable growth going forward. I think a big part when I was at VMware, they had the whole vCloud air kind of, you know, cloud environment, which was confusing to the public cloud and for customers because, you know, I think people didn't buy in on the vCloud air strategy. I think what changed it, one aspect that changed it for VMware was this, VMware cloud on AWS announcement, which, you know, a lot of companies want to move to AWS and want to move to the cloud, but they want to do it with the same infrastructure that they have on premise. So if you could give them vSphere, the same kind of stack, but in the cloud that opens up opportunities, and that's when we started to see at VMware where companies would do a one-year, two-year agreement because we weren't sure of their long-term cloud strategy. Now they are, it's like, that's a great model, that's a great plan. Now I'll go three, four years with VMware because I like that strategy. And it's great for AWS because they weren't getting a lot of mission critical apps going to AWS in the enterprise, but now you've got VMware infrastructure that makes it so much easier for companies to take some of this on-premise mission critical and move it to the cloud. So I think it was great for Amazon, great for VMware. But I also think a lot of some of smaller drivers, I think Microsoft kind of not focusing as much on Hyper-V has kind of led vSphere to kind of rebirth of vSphere in the market. We see that growth and we're pegged a lot to the vSphere in Hyper-V, the whole virtualization side. I think it's part of VMware getting a better strategy for the cloud, but I think it's also customers kind of getting comfortable that it's not going to be this massive shift to the cloud. It's going to be a hybrid story. Well, it's interesting. I mean, you know, the vCloud Air piece was always, even go back to Maritz, it was the recognition that the advantage that the hyperscalers had was homogeneity. The vCloud Air was always homogeneous, you know, like-to-like, what Oracle calls same-same. And so in effect, what they're doing, and what VMware is doing, I wonder if you agree with this with AWS, with, certainly with IBM and potentially others, is similar to the vCloud Air strategy, they just don't own the cloud. So that's a two-edge sword. I mean, I saw VMware did a debt, you know, they raised about another four billion. Their capex is relatively low, a couple hundred million. So they don't have all that hyperscale capex, that's an advantage, but at the same time, they don't have the vertical integration. What's your thought on that as a sort of observer? That's a big, because I was acquired into VMware, you know, three, eight, four years, whatever years ago, from a desk owner, CEO of a desk owner came in, and it was desktop on as a service. So desktop's in a cloud. And so I was, you know, I got the whole vCloud Air and the cloud market, and I told, you know, I kind of said when I came in, I think building your own cloud is don't do it, because it's going to suck a lot of cash, and it's all up front when you're behind in the race to the public market, right? You had IBM already there, you had Amazon there, you had Azure going, you had Google, you know, VMware was going to be, was late to the game on vCloud Air. And so I thought it was, you know, the smart move of kind of moving that out, because plus VMware with vCloud Air alienated, it's the other managed service providers that are building a business. So you're almost competing with the same people you're trying to load up with your technology. So it was like, you know, no, stay out of that. And that's, you know, that's a, you know, you've stayed out of the hardware, stay out of the cloud. So I want to bring that back to Veeam, because for you guys, I think the clarity is a great thing, right? It reduces all that friction and all that noise. And now the mission is clear. I wonder if you could comment on that. Yeah, I think that was the, that's what the market wanted, more clarity on what's your cloud strategy. And that's, that was, I think, the biggest mover in the market, the Veeam, the VMware's growth has really came when they flicked that switch. And they announced that whole Amazon strategy. And I think it helped us because, you know, we were obviously strong partner with VMware and strong partner with Amazon. So putting them together was perfect. That's why we were able to do it faster than anybody. And you can go buy our booth, you can see it. We demo it. It's, you know, it's all up and running. But I think it helped VMware get clarity on their strategy. It helped Amazon and it drove our market. And you guys draft right behind that. You just draft right in behind, right? So I think that's, that was a good move for everybody. Last question for you as the CEO, co-CEO of Veeam been around in this space for a long time. How does, what are some of the core things that Veeam does to attract and retain talent as we look at technology like backup and recovery that's hot again? Yeah. Well, you know, I think it's a, you know, you've got a, I think a lot of it comes down to culture. You know, we've got, I mean, we've always had great technology. So the product has always been the driver, it gets in, it does a really good job. And then it becomes, then it's the people. We've got a great culture of people. We call it hungry, humble and smart people. You know, and we have fun. We drive, you know, we're aggressive, we're scrappy, we're hungry, we're, you know, but no egos, you know, it's a, and our partner community, you know, kind of a, you know, is similar. And so I think it makes, because of that you get a reputation and it's kind of a spot that people want to come to. And, you know, we've, we've done a good job as we're growing, we've invested in our team to make our team better, but we've also brought in a lot of skill set, especially in the enterprise where we need to get more skills outside of kind of SMB and commercial. So we've done, I think, a good job of merging kind of the investment in our, in our existing team with a lot of really good skills and expertise that we didn't have, but also fit the culture. So keep that founders, that Ratmere's founder mentality as the business grows and scales and make it still being that fun, scrappy software company that made Veeam what it is today. Yeah, it kind of gets to my last question, which was, you guys are maturing, even though there's a lot of immature things going on, which is a lot of fun, all good. We're going to talk about that. All good. But, we talked about this, Veeam's ascendancy was during the virtualization craze and you guys really got a strong foothold and beat the competition. And now you're seeing a lot of emergent, cloud data protection guys, very well funded. Hundreds of millions of dollars in a business that's not capital intensive. How are you going to maintain your relevance there? It's a big part of your job. It's a big part of why they brought you in. It is. I mean, a lot of it is going to continue to do what we've done in terms of being, as you grow and as your scale, don't lose the aggressiveness. It's, think big, right? We've always been taking bigger and bigger steps, as an organization, taking risks, being aggressive, being bold, doing things that you do it as a small company but continue to do it. And that's still with our founders. That's the mentality of our business. A big part of my job is to make sure we don't lose that. As you get to 800 and a billion, still be that hungry and aggressive and scrappy company that we were six years ago, seven years ago when we were much smaller, but it's even more important today to be that as we move forward in this hyper competitive, different market that exists. We just got to be so much better every day. Every day that we come to work, we got to be better than we were the day before. And scrappy and hungry. I love it. Scrappy and hungry. Peter McKay, thank you so much for your, we'll say nth time on theCUBE, does that work? That's fair. All right. For Peter McKay, the president and co-CEO of Veeam and my co-host Dave Vellante, I'm Lisa Martin. You're watching theCUBE live from day one of the Emerald 2017. Stick around, we will be right back.