 All right everybody, welcome back to HPE Discover 2023. You're watching theCUBE's coverage. We go to the events. We extract the signal from the noise. This is day two, Dave Vellante, Rob Streche, Lisa Martin is also in the house. And so is Danny Allen, the chief technology officer at Veeam, good to see you again. Many time, CUBE guests, great to have you back on. I am always delighted to be on with you, Dave. Thanks. Yeah, so big show for you guys. You're a platinum or whatever. If there's a level above platinum, you'd be it. And you guys have had a great partnership with HPE and, of course, HPE going back. That's probably a dozen plus years now. So it's been very productive. And you guys, as always, you had Veeam on in May. I think you announced version 12 when in February, is that right? We did, we went GA, generally available in February. Yeah, yeah, so tell us about that, how that aligns with what you're doing with HPE. Well, HPE, as you probably know, is one of our very biggest partnerships. Actually they are the biggest alliance that we have. And people never buy Veeam by itself. We're always protecting something that sits on storage. And we're taking that data, moving it to storage. And so we have integrations with everything from their three-part series to Primera. And we can send data using Catalyst to their store once. So long and deep integrations, we have a very storied history with HPE. And we go to market very closely and effectively. Version 12, which we announced earlier this year, had some unique abilities that took advantage of what they offer. We had the ability to send data directly to object storage rather than tearing it through block storage. And so we've continued to partner very closely with HPE as we iterate on all these capabilities. Yeah, so, and then the other big thing that we've been talking about is just SaaS backup. You guys were the first to do Office 365, O365. I think you were the first to Salesforce, et cetera. How does that play in the world of HPE? Is that sort of a separate thing? Is that part of the partnership? It is, I mean, we protect everything, right? We protect physical, virtual, cloud, SaaS. And so you're right. We are actually the largest provider of data protection for Microsoft 365. We have over 15 million paid users. We continue to invest in that. And we just launched Salesforce last year. And so it's a very strong partnership. And actually, interestingly yesterday, I had a meeting with a customer that was taking the data from Microsoft 365. They were pulling it back on-premises and storing it on HPE Store once. And so it's a very close partnership, regardless of whether it is SaaS or cloud or virtual or physical or any of these systems. How are things going more on the container side? Because with Castin and that acquisition, that seems to be really the net new workloads and where that's going as well. I'm very excited about what's happening in the container space. As you know, three years ago, we acquired Castin with the K10 product. And we're the industry leading data protection for containers and Kubernetes especially. We have partnered with them and we have customers using Esmeral and they're doing data protection of Esmeral using that K10 product. But we continue to partner with them on all these cutting edge technologies and where the industry and infrastructure is going. Go ahead, please. Sorry, go ahead. Well, I was just going to follow up with that. What is the state of container data protection? It's obviously containers and Kubernetes has evolved. Yes. Quite significantly. And so presumably data protection has to evolve with it. But bring us up to date on where we're at. Well, you know what? We never learn from experiences in industry. So when we move to the cloud, people forget, oh, I need security. I need data protection. When we move to containers, people forget, oh, you know what? I should secure my containers and I need to back up my containers. And so we're early stages in containers. I actually think we're crossing the chasm this year in terms of adoption. We're seeing a lot more of it in Europe than in the Americas. However, IT organizations and development organizations need to learn again. Hey, guess what? You need data protection for containers. Why do you think that is? That you're seeing better uptake in Europe than in the US? Often a different persona. With containers specifically, we've seen the rise of DevOps. And so you have these developers who are not only writing the applications, but running the infrastructure. And they haven't run infrastructure historically. And so they don't recognize or realize some of the fundamental principles that we've learned in IT over the last 20 years. Yeah, I think that seems to, and that was actually a big discussion at Cloud NativeCon and KubeCon over in Amsterdam, was that it seems like Kubernetes is finally getting over the hump and becoming real from a, to your point, platform engineering and that platform engineering is taking that on. Is that really where you're seeing Castins, the persona that they're talking to, is it the platform engineers, the DevOps, SRE types? Yeah, really two types of personas that we've been really successful with. One is platform ops. So this is less the DevOps people writing the applications. We're seeing the emergence of this new type of IT that are running the platforms. They do understand about data protection. And we're getting great success as well cross-selling. We have 450,000 customers. And we go back to those customers and we can cross-sell whether it be Microsoft 365 or Kubernetes or AWS or Azure, any of the cloud platforms. Makes total sense. What's the market update these days? You guys, you guys number one yet? I mean, you were kind of tied, you know? Is it still a photo finish here? What do we got? There's not a photo finish. We are number one in market share according to IDC for the last 12 consecutive months. So very proud of that because, you know, five years ago we were probably fifth place and now we are number one in market share in growing quickly, growing faster, sequentially and by revenue ahead of all the data protection vendors. How do you think you've been able to maintain that trajectory? Is it just being first on areas that everybody else is ignoring? Like nobody was talking about SaaS backup. And then people were questioning you guys, like, well, why are you doing this? It's a tiny little market, you know? And now the numbers that you're throwing around are enormous and it's a meaningful part of your business now. It is. I really attribute it to two things. One is customer obsession. If you listen to your customers, you'll do what the market wants to be done and so that's one part of it. And the other is innovation. We don't always try to be first to market. Sometimes we are, but we try to be best to market. We don't just try and check a box. We go and look at Kubernetes and say, how can we do that differently? How can we do a better same thing in Salesforce? Same thing in the cloud. How can we do it better than what the existing vendors are doing? And that always ends up in amazing traction and success for us. You guys, I always say the ascendancy of Veeam it sort of coincided with the ascendancy of VMware specifically, but virtualization generally. What are you hearing from VMware customers today? There are obviously a lot of them are concerned, oh, they're going to raise prices on us, but we think it's going to be okay that the migration costs are going to be greater than any price increases that you might have to endure. But what are you seeing in that market? It's obviously maturing. At the same time, VMware, we heard them on stage yesterday and what's the state of that virtualization space? Well, there's certainly concern. I won't deny that within the customer base, but you're right, infrastructure is very much of a lock-in. It's hard to move from on-premises to the cloud. And you heard it here. They talked about Edge, they talked about hybrid and they talked about AI. That hybrid model I think is going to be sustainable for the long-term future. We're going to continue to see heavy VMware infrastructures on-premises. I don't see that as changing anytime soon because the cost models of on-premises still continue to be better than the cloud for most traditional workloads. You guys do a lot of research. Veeam is kind of renowned for the research that you guys do. I noticed last, let's see, I guess your Veeamon, Dave and Jaybuff were talking about some of the studies that you were doing. They had some stats on ransomware, just the state of backup in general and recovery. Anything that stood out to you as the CTO that you looked at and said, hm, that's something I need to investigate or here's a trend that I want to explore more with customers that stood out? Well, one of the things that stands out probably more than anything else. We did a research study on 12 underdog organizations that had been hit by ransomware. It wasn't theoretically, they actually had been hit by ransomware. 93% of the time, the ransomware went after the backup repositories to try to delete them and in 75% of the cases, they were actually successful in impacting some of the backups. And so that clearly stands out to us. How do you prevent that type of attack from deleting the backups? Because if you don't have the backups and you don't have the data, what do you end up doing, paying the ransom? And so that's resulted in us partnering with HPE, for example, we support immutability on their StoreOne systems. We can send data to the cloud, make it immutable, we support tape. So protecting the data systems is kind of mission number one for us. So basically enabling the customers to have that almost air gap, a virtual air gap, if not a actual physical air gap in there. Yes, 100% of the time, because you need to recover the data and if you look at that study, and this was the whole industry, not just Veeam customers, although Veeam customers made up 7% of the study, what you found is they could only recover on average 66% of the data. That means they are losing a third of their data if they're hit by ransomware. That's a staggering statistic to me and we need to do a better job. So security and data protection, I've always said these adjacencies. There's some companies, some of your competitors have said now we're a security company now. Okay, you haven't made that step. Like you said, you're not necessarily first, you sort of watch the markets and do what you think is going to drive customer value. You've always done that. In fact, when there was a big trend toward data management, not that you didn't talk about data management, but I remember the theme of Veeam on that year was, it's basically about the backup folks on recovery, kind of bread and butter. But nonetheless, it is an adjacency. It's becoming sort of an integral part of an overall cybersecurity strategy and I think that's important because, for instance, even in ransomware, okay, you want to be able to recover if they go after the backup corpus, but other times they're just ransoming, hey, they're threatening to put your data out there. So backup in and of itself in recovery is not going to solve your security problem. But so how do you interrelate with your security colleagues? How do you think about that? Well, there's definitely an adjacency and a partnership there. Security, historically, I always say it's been in three categories. It's been kind of identity and access management. It's been all the EDR, XDR, kind of security analysis. And then you have all the network capabilities. So these are firewalls and patching and IDS and IPS and all those things. What we've seen over the last three or four years is that data protection has become kind of the fourth pillar of security. And I expect that to continue. Now, we don't pretend to be a security company ourselves, but if you ask me, are we having conversations with Chief Information Security Officers every day? 100% because data protection, actually, if you look at the guidance by the Cyber Infrastructure Security Agency and the US government, number one thing they tell you to do, protect your data. Number one thing they ask you to do. And so we're talking now to security organizations more than we ever have in the past. So it's not like you don't need firewalls anymore. It's just, it's another layer you're saying data protection is the fourth layer and it's becoming sort of an integral part, not a bolt-on. All right, how about, what's the year of AI? The AI heard around the world, I like to say, what's your AI story? Well, you have to define AI first of all. Okay, let's, I love when we have the CTO on, he's going to get pedantic, which is a good thing. Well, you know, everyone always jumps on to the latest thing, whether it be blockchain or crypto or you know, you hear all these things. And so true AI actually has come into the forefront simply because of chat GPT and people have been amazed by the ability with these LLMs to drive capability. And we've had that within our product for a long time now. Actually, if you look at our support organization, we take in all the data, 450,000 customers, we put it in the big Hadoop system and we run our own models on it. And we can actually proactively predict before a customer has an issue that they're about to have an issue. We can send out updates, we call it in beam intelligent diagnostics. That truly is machine learning and AI. We're also building that into our engine around ransomware analysis. Right now, people are doing it after the fact. So after they do a backup, they'll look at it and say, hey, is there malware in there? We're actually building in line as the data passes through our data proxies and data movers, it will say, is it likely that there's ransomware because of the characteristics of the data and file entropy and those types of things. So we're building it in as well, but I'm always cautious of the marketing buzzwords. I like to think of it more as machine learning and algorithms than anything else. So has, well, how has or has the introduction of ChatGPT changed the conversations that you're having with your customers and or changed the way that you guys think about generative AI? Well, generative AI is very useful in some areas where you don't have concerns around intellectual property. So for example, internally, one of the things that we did as a project, we fed in all our support cases, all our knowledge bases into the ChatGPT engine and actually we could generate support even more efficiently using AI. However, if you say, well, why don't you do that with code and generate code with AI? Well, where did the code come from? What are the licensing associated with that? So where it makes sense, we're applying it within the business and where it doesn't make as much sense, we're being a little more cautious. Are customers asking you specifically about your AI or is it something that they don't think about Veeam being sort of a supply? I mean, they might want to know what's inside of Veeam but are they talking to you about their AI strategies? They're talking to us about their AI strategies and they're asking what we're doing but it tends to be very shallow. They just say, what's your AI strategy? What are you doing? We'll talk about some of those things. What's interesting is the one company that has all of their data that drives the LLMs, it's Veeam. We have all their data, the physical data, the virtual data, the cloud data, the SAS data and we have it all in a passive repository and they're saying, how can I use that to drive my LLMs? How can I use that to do generative AI and help my business be better faster? So there's a real opportunity for Veeam as we move forward into the future with our customers. Are you having these discussions with your colleagues at Insight? I mean, they must have a giant observation space here whether it's writing code more efficiently or starting companies or investing in companies that don't need as much capital to get up off the ground. Although I suppose if you have to buy GPUs you need capital, but you know what I mean. Yes, that's actually one of the great things about the LLMs as a service from HPE is that you don't have to put the capital up for GPUs. But yes, we're having that conversation with Insight. The portfolio is very large. We talk across the portfolio all the time. How can we help one another? It's been a fantastic environment for us to thrive in. Good, well, Danny, thanks again for coming back back on theCUBE. It's always good to see you and congratulations on all the success. Number one again now for trailing 12 months so you can claim the crown. So good job. Thank you. You're welcome. All right, for Rob Streche, Lisa Martin is also here. I'm Dave Vellante. You're watching theCUBE's coverage of HPE Discover 2023 up next, desperately seeking repatriation. Is it in the numbers or not? Stay tuned, we'll tell you.