 Hello, everyone and welcome to Veeam On 2021. My name is Dave Vellante and you're watching theCUBE's continuous coverage of the event. You know, Veeam is a company that made its mark riding the virtualization wave, but quite amazingly has continued to extend its product portfolio and catch the other major waves of the industry. Of course, we're talking about cloud backup, SAS data protection was one of the early players there making moves in containers. And this is the Veeam On power panel with me are Danny Allen, who's the CTO and Senior Vice President of Product Strategy at Veeam. Dave Russell is the Vice President of Enterprise Strategy, of course, at Veeam and Rick Vanover, Senior Director of Product Strategy at Veeam. Jens, great to see you again. Welcome back to theCUBE. Good to be here. Glad to be here. Yeah, let's do it. Yeah, let's do this. So Danny, we heard you kind of your keynotes and we saw the general sessions and sort of diving into the breakouts. But the thing that jumps out to me is this growth rate that you're on. Many companies, and we've seen this throughout the industry, have really struggled moving from the traditional on-prem model to an ARR model. They've had challenges doing so, Veeam. I mean, you're not a public company, but you're quite transparent in a lot of your numbers. 25% ARR growth year over year in the last quarter. You know, 400,000 plus customers. You're talking about huge numbers of downloads of backup and replication, Danny. So what are your big takeaways from the last, you know, six to 12 months. I know it was a strange year, obviously, but you guys just keep cranking. Yeah, so we're obviously hugely excited by this. And it really is a confluence of various things. It's our partners, it's the channel. It's our customers, frankly, that guide us and give us direction on what to do. But I always focus in on the product because we run product strategy here, this group, and we're very focused on building good products. And I would say there's three product areas that are on maximum thrust right now. One is in the data center. So we built a billion-dollar business on being the very best in the data center for vSphere, Hyper-V, for Nutanix, AHV, and as we announced, also with Red Hat virtualization. So data center, obviously a huge thrust for us going forward. The second is SaaS, Office 365 is exploding. We already announced we're protecting 5.8 million users right now with the backup for Office 365. And there's a lot of room to grow there. There's 145 million daily users of Microsoft Teams. So a lot of room to grow. And then the third area is cloud. We moved over a hundred petabytes of data into the public cloud in Q1. And there's a lot of opportunity there as well. So those three things are driving the growth. The data center, SaaS and cloud. Dave Russell, I want to get your kind of former analyst perspective on this. I know it's kind of become cliche, but you still got that DNA and I'm going to tap it. So when you think about, and you were following beam of course very closely during its ascendancy with virtualization. And back then you wouldn't just take your existing, approaches to backup in your processes and just slap them onto virtualization. That wouldn't have worked. You had to rethink your backup. And it seems like I want to ask you about cloud because people talk about lift and shift. And what I hear from customers is, you know, if I just lift and shift to cloud, it's okay. But if I don't have a plan to change my operating model, I don't get the real benefit out of it. And so I would think backup data protection, data management, et cetera is a key part of that. So how are you thinking about cloud and the opportunity there? Yeah, it's a good point, David. You know, I think the key area right there is it's important to protect the workload or the environment, the way that that environment is naturally is best suited to be protected. And also to interact in a way that the administrator doesn't have to rethink, doesn't have to change their process. So early on beam, I think was very successful because the interfaces, the work experience looked like what an active directory administrator was used to seeing if they went to go and protect something with beam or to go recover an item. Same as during the cloud, you don't want to just take what's working well in one area and just force it, you know, round a peg into a square hole just doesn't work well. So you've got to think about the environment and you've got to think about what's going to be the real use case for getting access to this data. So you want to really tune things. And there's obviously commonality involved, but from a workload perspective, from an application perspective and then a delivery model perspective now when it comes to hybrid cloud, multi-cloud, it's important to look like that you belong there, not a fish out of water. Well, so of course, Danny, you were talking about, you guys have, you know, product first, right? And so Rick, you're your key product guy here. What's interesting to me is when you look at the history of the technology industry and disruption, it's so often that the incumbent, which you knew now an incumbent, you know, you're not the startup anymore, but the incumbent has challenges riding these new waves because you've got to serve the existing customer base, but you've got to ride the new momentum as well. So how, Rick, do you approach that from a product standpoint? Because based on the numbers that we see, it doesn't, you seem to be winning in both, the traditional business and the new business. How do you adapt from a product standpoint? Well, Dave, that's a good question. And Danny set it up well. It's really the birth of the Veeam platform and its relevance in the market. In my 11th year here at Veeam, I've had all kinds of conversations, right? You know, the perception was that, you know, this SMB toy for one hypervisor, those days are long gone. We can check the boxes across the data center and cloud and even cloud native apps. You know, one of the things that my team's done is invest heavily in both people and staff on Kubernetes, which aligns to our casting acquisition, which was featured heavily here at Veeam on. So I think that being able to have that complete platform conversation, Dave has really given us incredible momentum, but also credibility with the customers because more than ever, this fundamental promise of having data backed up and being able to drive a recovery for whatever may happen to data nowadays, you know, that's a real emotional important thing for people and to be able to bring that kind of outcome across the data center, across the cloud, across changes in what they do, Kubernetes. That's really aligned well to our success. And, you know, I love talking to customers now. It's a heck of a lot easier, right? When you can say yes to so many things and get the technical win. So that kind of drives a lot of the momentum, Dave, but it's really the platform. So let's talk about the future of IT. And I want all you guys to chime in here, Danny, you start up. How do you see it? I always say the last 10 years, the next 10 years ain't going to be like the last 10 years, whether it's in cloud or a hybrid, et cetera. But so how, Danny, do you see IT in the future of IT? Where do you see Veeam fitting in? How does that inform your roadmap, your product strategy? Maybe you could kick that segment off. I think of the kind of the two past decades that we've gone through. Starting back in 2000, we had a lot of digital services built for end users and it was built on physical infrastructure. And that was fantastic. Obviously, we could buy things online, we could order clothes, we could order food, we could do things, interact with end users. The second year, about a decade later, was based on virtualization. Now, that wasn't a benefit so much to the end user. It was a benefit to the business, the ROI, because you could put 10 servers on a single physical server and you could be a lot more flexible in terms of delivery. I really think this next era that we're going into is actually based on containers. It's why the custom acquisition is so strategic to us. Because the unique thing about containers is they're designed to be consumption friendly. You spin them up, you spin them down, you provision them, you deprovision them and they're completely portable. You can move it from on-premises if you're running OpenShift to EKS, AKS, GKE. And so I think the next big era that we're going to go through is this movement towards containerized infrastructure. Now, if you ask me who's running that, I still think there's going to be a data center operations team. Platform Ops is the way that I think about them who run that because who's going to take the call in the middle of the night. But it is interesting that we're going through this transformation. And I think we're in the very early stages of this radical transformation to a more consumption-based model. Dave, I don't know what you think about that. Yeah, I would say something pretty similar, Danny. It sounds cliche, Dave Vellante, but I take everything back to digital transformation. And the reason I say that is, to me, digital transformation is about improving customer intimacy and so that you can deliver goods and services that better resonate and you can deliver them in a better time frame. And so exactly what Danny said, I think that the siloed approaches of the past where we built very hard in environments and we were willing to take a long time to stand those up, and then we had very tight change control. I feel like 2020 is sort of a metaphor for where the data center is going and that throw all that out the window. We're compiling today, we're shipping today and we're going to get experienced today and we're going to refine it and do it again tomorrow. But that's the environment we live in. And to Danny's point, why containers are so important? That notion of shift left, meaning experience things earlier in the cycle, that is going to be the reality of the data center regardless of whether the data center is on-prem, hybrid, cloud, multi-cloud, or for some of us potentially completely in the cloud. So Rick, when you think about some of your peeps, like the backup admin, right? And how that role is changing is a big discussion in the economy now about the sort of skills gap. We got all these jobs and yet there's still all this unemployment now, you debate about the reasons why, but there's a transition in roles in terms of how people are using products and obviously containers brings that. What are you seeing when you talk to, like I call them your peeps? Yeah, it's an evolving conversation, Dave, the audience, right? It has to be relevant. We're afforded good luxury in that data center wheelhouse that Danny mentioned. So virtualization platform, storage, physical servers, that's a pretty good start, but in the software as a service, wheelhouse is a different persona. Now they used to talk to those types of people. There's a little bit of connection, but as we go farther to the cloud native apps, Kubernetes and some of the other SaaS platforms, it is absolutely an audience journey. So I've actually worked really hard on that in my team, right? Everything from what I would say, parachuting into a community, right? And you have to speak their language. Number one reason is just, or number one outcome is just be present. And if you're in these communities, you can find these individuals, you can talk their language, you can resonate with their needs, right? So that's something, you know, everything from the Veeam marketing strategy to the community strategy, to even just seeding products in the market. That's a recipe that Veeam does really well. So yeah, that's a moving target for sure. Dave, you were talking about, you know, the cliche of digital transformation. And I'll say this, maybe pre COVID, I really felt like it was a cliche. There was a lot of complacency, I'll call it, but then the force marks the digital change that. And now we kind of understand, if you're not a digital business, you're in trouble. And so my question is how it relates to some of the trends that we've been talking about in terms of cloud containers, that we've seen the classification for the better part of a decade now, but specifically as it relates to migration, it's hard for customers to just migrate their application portfolio to the cloud. And it's hard to fund it. It takes a long time, it's complex. How do you see that cloud migration evolving? Maybe that's where hybrid comes in. And again, I'm interested in how you guys think about it and how it affects your strategy. Yeah, well, it's a complex answer, as you might imagine, because 400,000 customers, we take the exact same code, the exact same ISO that I run on my laptop is the exact same beam backup and replication image that a major bank protects almost 20,000 machines and eight petabytes of data. And so what that means is that you have to look at things on a case by case basis. For some of us, continuing to operate proprietary systems on-prem might be the best choice for a certain workload. But for many of us, the genie's kind of out of the bottle with 2020, we have to move faster. It's less about safety and a lot more about speed and favorable outcome. And we'll fix it if it's broken, but let's get going. So for organizations struggling with how to move to the cloud, believe it or not, Backup and Recovery is an excellent way to start to venture into that because you can start to move data. Backup is a data movement engine. So we can start to see data there where it makes sense. But Rick would be quick to point out, we wanna offer a safe return. We have instances of where people want to repatriate data back and having a portable data format is key to that, Rick. Yeah, I had a conversation recently with an organization managing cloud sprawl. They decided to consolidate, we are gonna use this cloud. So it was removing a presence from one cloud that starts with an A and migrating it to the other cloud that starts with an A. So yeah, we've seen that need for portability repatriation on-prem. Classic example going from on-prem apps to software as a service models for critical apps. So data mobility is at the heart of Veeam. And with all the different platforms, Kubernetes comes into play as well. It's definitely aligning to the needs that we're seeing in the market for sure. So repatriation, I want to stay on that for a second because you're an arms dealer. You don't care if they're in the cloud or they're on-prem. I mean, I don't know, maybe you make more money than one or the other, but you are going to ride whatever waves that the market gives you. So repatriation to me implies, or maybe I'm just inferring that somebody's moved to the cloud and they feel like, oh, wow, we've made a mistake. It was too fast, too expensive, it didn't work for us. So now we're going to bring it back on-prem. Is that what you're saying? Are you saying they actually want their data in both places as another layer of data protection? Danny, I wonder if you could address that. What are you seeing? Well, one of the interesting things that we saw recently, Dave Russell actually did the survey on this, is that customers will actually build their work load loads in the cloud with the intent to bring it back on-premises. And so that repatriation is real. Customers actually don't just accidentally fall into it, but they intend to do it. And the thing about Veeam, everyone says, hey, we're disrupting the market. We're helping you go through this transformation. We're helping you go forward. Actually take a slightly different view of this. Veeam gives them the confidence that they can move forward if they want to, but if they don't like it, then they can move back. And so we give them the stability through this incredible pace change of innovation. We're moving forward so, so quickly, but we give them the ability to move forward if they want, but then to recover, to repatriate if that's what they need to do in a very effective way. And Dave, maybe you can touch on that study because I know that you talk to a lot of customers who do repatriate workloads after moving them to the cloud. Yeah, it's kind of funny, Dave. Not in the analyst business right now, but thanks to Danny and our chief marketing officer, we've got now half a dozen different research surveys that have either just completed or in flight, including the largest in the data protection industry's history. And so the survey that Danny alluded to, what we're finding is people are learning as they're going. And in some cases, what they thought would happen when they went to the cloud, they did not experience. So the net kind of funny slide that we discovered is when we asked people, what did you like most about going to the cloud? And then what did you like least about going to the cloud? The two lists look very similar. So in some cases, people said, oh, it was more stable. In other cases, people said, no, it was actually unstable. So Rick, I would suggest that that really depends on the practice that you bring to it. It's like moving from a smaller house to a larger house and hoping that it won't be messy again. Well, if you don't change your habits, it's eventually gonna end up in the same situation. Well, there's still door number three and that's data reuse and analytics. And I've found a lot of organizations love the idea of at least manipulating data, running test dev scenarios on yesterday's production cloud workload, completely removed from the cloud, or even just analytics, I need this file. Those types of scenarios are very easy to do today with Veeam and sometimes those repatriations, those portable recoveries, sometimes people do that intentionally, but sometimes they have to do it, whether it's fire, flood, and blood, and, you know, oh, it looks like today we're moving to the cloud because I've lost my data center, right? Those are scenarios that that portable data format really allows organizations to do that pretty easily with Veeam. I mean, it's a good discussion because to me it's not repatriation. I mean, it has this negative connotation, the zero sum game and it's not. Danny, what you described and Rick as well, it was kind of an experimentation, a purposeful, we're going to do it in the cloud because we can and it's cheap and low risk to spin it up and then we're going to move it because we've always thought we're going to have it on-prem. So, you know, there is some zero sum game between the cloud and on-prem, clearly, no question about it, but there's also this rising tide lifts all ship. I want to change the subject to something that's super important and top of mind. It's in the press and it ain't going away and that is cyber and specifically ransomware. I mean, since the solar winds hack, I mean, it seems to me that was a new milestone in the capabilities and aggressiveness of the adversary. It was very well-funded and quite capable and what we're seeing is this idea of tucking into the supply chain, island, so-called island hopping. You're seeing malware that's self-forming and takes different signatures, very stealthy and the big trend that we've seen in the last six months or so is that the bad guys will lurk and they'll steal all kinds of sensitive data. And then when you have an incident response, they will punish you for responding and they will say, okay, fine, you want to do that. We're going to hold you ransom. We're going to encrypt your data. And oh, by the way, we stole this list of positive COVID test results with names from your website and we're going to release it. If you don't pay, I mean, it's like, so you have to be stealthy in your incident response. This is a huge problem. We're talking about trillions of dollars lost each year in cyber crime. And so, you know, it's, again, it's the bad news is good news for companies like you, but how do you help customers deal with this problem? What are you seeing, Danny? Maybe you can chime in and others who have thoughts. Well, we're certainly seeing the rise of cyber like crazy right now. And we've had to focus on this for a while because if you think about the last line of defense for customers, especially with ransomware, it is having secure backups. And so whether it be, you know, hardened Linux repositories, but making sure that you can store the data, have it offline, have it, have it encrypted and mutable, those are things that we've been focused on for a long while. It's more than that. It's detection and monitoring of the environment, which is certainly that we do with our monitoring tools. And then also the secure recovery. The last thing that you want to do, of course, is bring your backups or bring your data back online only to be hit again. And so we've had a number of capabilities across our portfolio to help in all of these. But I think what's interesting is where it's going. If you think about unleashing a world where we're continuously delivering, I look at things like containers where you have continuous delivery. And I think every time you run that Helm commander, every time you run that Terraform command, wouldn't that be a great time to do a backup, to capture your data so that you don't have an issue once it goes into productions? So I think we're going towards a world where security and the protection against these cyber threats is built into the supply chain rather than doing it on just a time-based schedule. And I know, Rick, you're pretty involved on the cyber side as well. Would you agree with that? I would. And for organizations that are concerned about ransomware, you know, this is something Veeam's taken very seriously. And what Danny explained for those who are familiar with security, he kind of jumped around this universally acceptable framework, the NIST cybersecurity framework. There are five functions that are a really good recipe on how you can go about this. And my advice to IT professionals and decision makers across the board is to really align everything you do to that framework, backup is a part of it, the security monitoring and user training, all those other things are areas that need to really follow that wheel of functions. And my little tip here, and this is where I think Veeam can introduce some differentiation, is around detection and response. A lot of people think a backup product would shine in both protection and recovery, which it does, Veeam does, but especially on response and detection. You know, we have a lot of capabilities that become impact opportunities for organizations to be able to really provide successful outcomes through the other functions. So it's something we've worked on a lot. In fact, we've covered here at the event. I'm pretty sure it'll be on for replay, the updated white paper, all those other resources for different levels can definitely guide them through that journey. So Rick, let me follow up to the detection is what? Analytics that help you identify whatever lateral movement or people go in places they shouldn't go. The hard part is, you know, the bad guys are living off the land, meaning they're using your own tooling to hack you. So it's not like they're introducing something new that shouldn't be there. They're just using, they're making judo moves against you. So specifically, talk a little bit more about your detection because that's critical. Sure, so I'll give you one example. Imagine we capture some data in the form of a backup. Now we have existing advice that says, you know what? Don't put your backup infrastructure with internet connectivity. Use explicit minimal permissions. And those three things right there and keep it up to date, those, you know, four things right there will really hedge off a lot of the different threat vectors to the backup data. Couple that with some of the immutability offline or air gap capabilities that Danny mentioned, and you have an additional level of resiliency that can really ensure that you can drive recovery. From an analytics standpoint, we have an API that allows organizations to look into the backup data, do more aggressive scanning without any exclusions with different tools on a flat file system. You know, the threats can't jump around in memory. Couple that with secure restore. When you reintroduce things into the environment from a recovery standpoint, you don't want to reintroduce threats. So there's protections. There's confidence building steps along the way with Veeam. And these are all generally available technologies. So again, I got this white paper. I think we're up to 50 pages now, but it's very thorough. That goes through a couple of those scenarios. But, you know, it gets quickly into things that you wouldn't expect from a backup product. Yeah, please send me a copy if you don't mind it. I, this is a huge problem. I mean, you guys are global company. I admittedly have a bit of a US bias, but I was interviewing Robert Gates one time, the former defense secretary, and we were talking about cyber war. And I said, don't we have the best cyber? Can't we let go on the offense? He goes, yeah, we can, but we got the most to lose. So this is really a huge problem for organizations. All right, guys, last question I got to ask you. So what's life like under, under insight capital, the private equity, what's changed? What's, what's the same? Do you hear from our good friend, Ratmar at all? I mean, we give us the update there. Yeah, so absolutely fantastic. You know, it's interesting. So obviously acquired by insight partners in February of 2020, right? When the pandemic was hitting, but they essentially said, light the fuse, keep the engines going. And we've certainly been doing that. They haven't held us back. We've been hiring like crazy. We're up to, I don't know what the count is now, I think 4,600 employees. But, you know, people think of private equity and they think of cost optimizations and, you know, optimizing the business. That's not the case here. This is a growth opportunity and it's a growth opportunity simply because of the technology opportunity in front of us to keep, to keep the engines going. So we hear from Ratmar, you know, on and off, but the new executive team at Veeam is very passionate about driving the success in the industry, keeping abreast of all the technology changes. It's been fantastic. Nothing but good things to say. Yeah, insight partners, they're players. We watch them, we watch their moves. And so it's, you know, I heard Bill McDermott, the CEO of service now the other day talking about, he called himself the rule of 60. Where, you know, I always thought it was EBITDA plus growth, you know, add that up. And that's what he was talking about free cash flow. He sort of changed the definition a little bit. But so what are you guys optimizing for? Are you optimizing for growth? Are you optimizing for EBITDA? Are you optimizing for free cash flow? I mean, you can't do all three, right? How do you think about that? Well, we're definitely optimizing for growth. No question. And one of the things that we've actually done in the past 12 months, 18 months is beginning to focus on annual recurring revenue. You see this in our statements. We know we're not public, but we talk about the growth in ARR. So we're certainly focused on that growth in the annual recovering revenue. And that's really what we track too. And it aligns well with the cloud. If you look at the areas where we're investing in cloud native and the cloud and SaaS applications, it's very clear that that recurring revenue model is beneficial. Now, we've been lucky. I think we're 13 straight quarters of double digit growth. And obviously they don't want to see that dip. They want to see that growth continue. But we are optimizing on the growth trajectory. Okay. And you clearly have a 25% growth last quarter in ARR. If I recall correctly, the number was evaluation was $5 billion last January. So obviously then given that strategy, Dave Russell, that says that your TAM is a lot bigger than just the traditional backup world. So how do you think about TAM? We'll close there. Yeah. Yeah. I think you look at it a couple of different ways. So just in the backup recovery space or backup and replication depending on which one you want to use, you've got a large market there in excess of $8 billion. We're a $1 billion ongoing enterprise. Now, if you look at recent IDC numbers, we grew, and I got my handy HP calculator out to make sure I got this right. We grew 44.88 times faster than the market average year over year. So let's call that 45 times faster in backup. There's billions more to be made in traditional backup and recovery. However, go back to what we've been talking around digital transformation, Danny talking about containers and the environment deployment models changing. At the heart of backup and recovery, we are a data capture, data management, data movement engine. We envision being able to do that not only for availability, but to be able to drive the business board, to be able to drive economies of scale faster for our organizations that we serve. I think the trick is continuing to do more of the same. Danny mentioned, you know, the fuse got lit. We haven't stopped doing anything. In fact, Danny, I think we're doing like 10 times more of everything that we used to be doing prior to the pandemic. All right, Danny, we'll give you the last word. Bring it home. So our goal has always been to be the most trusted provider of backup solutions that deliver modern data protection. And I think folks have seen at Veeamon this year that we're very focused on that modern data protection. Yes, we want to be the best in the data center, but we also want to be the best in the next generation, in the next generation of IT. So whether it be SaaS, whether it be cloud, Veeam is very committed to making sure that our customers have the confidence that they need to move forward through this digital transformation era. Guys, I miss fly. I mean, I don't miss flying, but I miss hanging with you all. We'll see you for sure. Veeamon 2022 will be belly to belly. But thanks so much for coming on the virtual edition and thanks for having us. Thank you. All right, and thank you for watching, everybody. This is Keeb's continuous coverage of Veeamon 21, the virtual edition. 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