 Live from San Francisco, celebrating 10 years of high-tech coverage, it's theCUBE. Covering VMworld 2019. Brought to you by VMware and its ecosystem partners. Welcome back, I'm Stu Miniman, my co-host Justin Warren and you're watching theCUBE. We have two sets, three days here at VMworld 2019, our 10th year of the show and happy to welcome back to our program two of our CUBE alumni. We were at Veeam on earlier this year, down in Miami, but sitting to my right is Ratmir Timachev, who's the co-founder and executive vice president of global sales and marketing with Veeam and joining us also is Danny Allen, who's the vice president of product strategy, also at Veeam. Thank you so much both for joining us. Thanks for having us. All right, so Ratmir, let's start. Veeam has been very transparent as to how the company is doing. There's all those talks about unicorns and crazy valuations or anything like that, but gives the update on actual dollars and actually what's happening in your business. Absolutely, we're always transparent. So actually there is this term unicorn, right? So does it mean one billion in valuation or one billion in revenue? In valuation. Yeah, I know that. So Veeam is not unicorn anymore, right? So Veeam is one billion in bookings, so. Yeah, the major trend in the industry is that we are moving from perpetual to subscription because we are moving from on-prem to hybrid cloud. So, and Veeam is actually leading that wave. So we've been always known to be very customer friendly, to do business with, easy to do business with from the channel, from the customer perspective and that's the major trend. If the customers are moving to hybrid cloud, we have to move from our business model to hybrid cloud. So we are changing our business model to make it very easy for customers. And Ratmir, that's not an easy adjustment. We've watched some public companies go through a little bit of challenges as you work through. There's the financial pieces, there's the sales pieces of that, since you give us a little bit of how that works. You just retrain the sales force and go. That is awesome, awesome question. That is awesome point that it's extremely painful. Extremely painful. And for some companies, like everybody says Adobe is the best example of moving from perpetual or traditional business model to a subscription, right? So annual or even monthly subscription. For us, it's even 10 times more difficult than Adobe because we are not only moving from perpetual to subscription, we are moving, we are changing our licensing unit per socket, which is VMware traditional, to per VM or per workload or per instance, right? What we call instance, basically means, so it's extremely painful. We have to change how we do business, how we incentivize ourselves people, how we incentivize our channel, how we incentivize our customers. But that's inevitable. We are moving through a hybrid cloud where sockets don't exist. Sockets, there are no sockets in the hybrid cloud. There are workloads and data, data and applications. That's what, so we have to change our business model, but we also have to keep our current business model. And it's very difficult in terms of the bookings and revenue when we give customer an option to buy this way or that way, of course they will choose the way that is the less expensive for them and we are ready to do that. We can absorb that because we are a private company and we are profitable, we are fast growing. So we can afford that unlike some of the public companies or companies that venture capital financed. So how do you make that kind of substantial change to the, I mean, that's changing half your company, really, to change that many structures. How do you do that without losing the soul of the company? And like Veeam is famous for being extremely Veeam-y. How do you make all those sorts of changes and still not lose the soul of a company like that? How do you keep that there? That's an awesome question because that's 50% of our executive management discussions are about that question, right? So what made Veeam successful? Core values, what we call core values, there are family values, there are company core values every company has. So that's the most important and one of them is be extremely customer friendly, right? So easy to do business with. That's the number one priority. Revenue, profits, number two, number three, being doing the right things for the customer is number one. That's how we are discussing it. And we're introducing a major change on October 1st. Oh, yes. Another major change. We've done these major changes in the last two years moving to subscription. So we started that move two, two and a half years ago by introducing our product for Office 365 backup when that was available only on subscription basis, not perpetual. So we are moving in subscription to the subscription business model in the last three years. On October 1st, 2019, in one month, we are introducing another major change. We are extremely simplifying our subscription licensing and introducing what we will call Veeam Universal License, where you can buy once and move for clothes everywhere. From physical to VMware, to Hyper-V, to AWS, Azure back to VMware and back to physical. I'm joking. All right, Danny, bring us inside the product. You know, we've watched the maturity at 10 years of the cube here. You know, Veeam was one of the early, you know, big ecosystem success stories, of course, went into multi-hypervisor, went into multi-cloud, you know, Ratmir just went through, you know, all of the changes there, exciting the VUL, I guess we'll call it. Yes, yeah. Boom. Well, absolutely. So on the product piece, how's the product keeping in line with all of these things? Yeah, so our vision is to be the most trusted provider of backup solutions that enable cloud data management. So backup is still a core of it and it's the start of everything that we do. But if you look at what we've done over the course this year, it's very much about the cloud. So we added the ability, for example, to tear things into object storage in the hyperscale public cloud and that has been taking off gangbusters into S3 and into Azure Blob storage. And so that's a big part of it. Second part of it in cloud data management is the ability to recover. If you're sending your data into the cloud, why not recover there? So we've added the ability to recover workloads in Azure, recover workloads in EC2. And lastly, of course, once your workloads are in the cloud, then you want to protect it using cloud-native technologies. And so we've addressed all of these solutions and we've been announcing all these exciting things over the course of 2019. The product started off as being VM-centric or VM-only back in the day. And then you've gradually added different capabilities to it as customers demanded it. And it was on a pretty regular cadence as well. And you've recently added cloud functionality and backups there. What's the next thing customers are asking for? Because we've got lots of workloads being deployed in Edge. We've got lots of people doing things with no SQL backups. We've got Kubernetes is mentioned every second breath at this show. So where are you seeing demand for customers that you need to take the product next? So we've heard a lot about Kubernetes, obviously, at this show, so containers is obviously a focus point. But one of the things we demoed yesterday, we actually had a breakout session, is leveraging an API from VMware called the VCR API for IO filtering. So it basically enables you to fork the rights when you're writing down to the storage level so that you have continuous replication into environments. And that just highlights the relationship we have with VMware. 80% of our customers are running on VMware. But that's the exciting things that we're innovating on. Things like making availability better, making the agility and movement between clouds better, making sure that people can take copies of their data to accelerate their business. These are all areas that we're focusing on. Yeah, a lot of companies have tried to, multiple times have tried to go from backup and go into data management. I like that you don't shy away from, oh yeah, we do backup and it's an important workload and you're not afraid to mention that. Whereas some other companies seem to be quite scared of saying, well yeah, we do backup because it's not very cool or sexy. Well it doesn't have to be cool and sexy to be important. So I like that you actually say that yes, we do backup but we are also able to do some of these other bits and pieces and it's enabled by that backup. So copy data management so we can take copies of things and do this. Where are some of the demand coming around what to do with that data management side of things? I know there's people who are interested in things like for example, data masking where you want to take a copy of some data and use it for testing. There's a whole bunch of issues and risks around doing that. So companies look for assistance from companies like Veeam to do that sort of thing. Is that where you're heading with some of that product? It is, there's four big use cases. DevOps is certainly one of them. We've been talking a lot about Kubernetes, right? Which is all about developers and DevOps type development. So that's a big one and one of the interesting things about that use case is when you make copies of data compliance comes into play. If you need to give a copy of the data to the developer you don't want to give them credit card numbers or health information so you probably want to mask that out and we have the capability today in Veeam. We call it staged restore that you can actually open the data in a sandbox to manipulate it before you give it to the developer. But that's certainly one big use case and it's highlighted at conferences like this. Another one is security. Spend a decade in security to get passionate about it but pen testing or forensics. If you do an invasive test on a production system you'll bring the system down. And so another use case of the data is take a copy, give it to the security team to do that test without impacting the production workload. A third one would be IT operations, patching and updating all these systems. One of the interesting things about Veeam customers they're far more likely to be on the most recent versions of software because you can test it easily by taking a copy, test the patch, test the update and then roll it forward. And then a fourth huge use case that we can't ignore is GDPR and analytics and compliance. There's just this huge demand right now and I think there's going to be marketplaces opened in the public cloud around delegating access to the data so that they can analyze it and give you more intelligence about it. So GDPR is just the start. Where is my personally identifiable information? But I can imagine a workload where a marketplace or an offering where someone comes in and says, hey, I'll pay us some money and I'll classify your data for you or I'll archive it smartly for you and the business doesn't have to do that. All they have to do is delegate access to the data so that they can run some kind of machine learning algorithm on that data. So these are all interesting use cases. I go back DevOps, security, IT operations and analytics. All of those. So Ratmir, when I go to the keynote it did feel like it was Kubernetes world but I went down to the show floor it definitely felt like data protection world. So it's definitely been one of the busier conversations the last couple of years at this show but you look, walk through the floor whether it be some of the big traditional vendors, lots of brand new startups, some of the cloud native players in this space. How do you make sure that Veeam keeps the customers that they have and can keep growing on the momentum that you've been building on? That's great questions too. Yeah, so like Pat Galsinger mentioned yesterday that number of applications is growing, has grown in the last five years from 50 million to something like 330 million and will grow to another almost 800 million in the next five years by 2024. Veeam is in the right business. Veeam is the leader. Veeam is driving the vision and the strategy, right? So yeah, we have good competition in the form of legacy vendors and emerging vendors but we are very good positioned because we own the major part of your hybrid cloud which is the private cloud. So, and we are providing a good vision for how the hybrid cloud data management not just data protection what just Danny explained should be done, right? So I think we are in a good position and I feel very comfortable for the next five, 10 years for Veeam. That's a good place to be. Veeam, I'm feeling confident about the future. It's, I don't know, five to 10 years, that's a long way out. I don't know. Yeah, I agree, I agree. It used to be like now you cannot predict more than six months. Justin, am I going to ask him about China now? Six months is good, yeah. Six months is maximum, what we can predict this day. We were asking Michael Dell about the impacts of China these days. So there's a lot of uncertainty in the world these days. Totally. Yeah, anything macroeconomic that you look at, your global footprint and? No, we're a traditional global technology company that generates most of the revenue between Europe and North America. And we have emerging markets like Asia-Pac and Latin. So it's, we're no different than any other global technology company in terms of the revenue and our investment. The fastest growing region of course is Asia-Pac but I mean our traditional markets is North America and Europe. Hailing from Asia-Pac, I do know the region reasonably well. And Veeam is, yeah, Veeam is definitely, has a very strong presence there and growing. Australia used to be there, one of our claims to fame was one of the highest virtualized workloads. And now highest cloud adapter. Cloud adoption. Yes, we like new, shiny toys. So we adopt it very, very quickly. So do you see any innovation coming out of Asia-Pac? Because we use these things so much and we tend to be on that leading edge. Do you see things coming out of the Asia-Pac teams that notice how customers are using these systems and that, is that placing demand on Veeam? Absolutely, but Danny knows better because he just came back from the Asia-Pacific trip. That's right, you did. Yeah, I did. I always say you live in the future, which, because you're so many hours ahead, but the reality is actually the adoption of things like hyper-converged infrastructure was far faster in areas like Anzed. The adoption of the cloud. And it's because of New Zealand as part of the D8, Australia is very much associated with taking that. One of the things that we're seeing there is a consumption-based model. I was just there a few weeks ago and the move to a consumption and subscription-based model is far further advanced than other parrots of the world. So I go over there regularly, mostly because it gives me a good perspective on what the US is going to do two years later and maybe Amia three years later. It gives us a good perspective of where the industry is going. It's not to the US, it comes to California first. And then it spreads from there. Yeah, are you saying he's literally using the technology of tomorrow in his today, is what we're saying? Maybe I can make predictions a little bit further ahead then. Well, you live in the future. All right, I want to give you the both, just final word here, VMworld 2019. It's always the best show for us. VMworld is the, I mean, like Danny said, 80% of our customers is VMware. So it's always the best. We've been here for the last 12 years since 2007. I have so many friends, buddies, I love to come here, like to spend three, four days with my best friends in the industry and just in life. I love the perspective here of the multi-cloud world. So we've saw some really interesting things and moving things across clouds and leveraging Kubernetes and containers. And I think the focus on where the industry is going is very much aligned with Veeam. We also believe that while it starts with backup, the exciting thing is what's coming in two, three years. And so we have a close alignment, close relationship. It's been a great conference. Danny, Ratmir, thank you so much for the updates as always. And yeah, have fun with some of your friends in the remaining time that we have. We have a party tonight, Stu, so Justin. Yeah, I think most people that have been to VMworld are familiar with the Veeam party. It is, you know, famous, definitely. For Justin Warren, I'm Stu Miniman. We'll be back with more coverage here from VMworld 2019. Thanks for watching theCUBE.