 Live from Las Vegas, it's theCUBE. Covering InterConnect 2017, brought to you by IBM. Hey, welcome back everyone. We are here live in Mandalay Bay in Las Vegas for day three coverage of IBM InterConnect 2017. This is theCUBE's exclusive coverage of IBM's cloud show and their Watson data, IoT and more. I'm John Ford, my co-host Dave Vellante. Our next two guests are Matt Kalmanston, VP of North American Sales and Cloud Service Providers at Veeam and Andy Vandeveld, VP of Global Strategic Alliances at Veeam. Guys, welcome to theCUBE. Thank you. Thank you for having us. Andy, I want you to just set the table. We are familiar with Veeam. We're going to do your event. You got a big event coming up in New Orleans. theCUBE will be there. We've been watching you guys for many, many years. theCUBE is on its eighth season, I think season one, 2010 at VMworld. You've been very, very successful, but you're not a public company, but yet you guys act like a public company. You release your revenue and set the table about what Veeam is, where you guys are at and the current status. Sure, we're a company that's been around for 10 years. Founded by our founders, Andre Barnoff and Ratmir Tima-Chev. The company has grown significantly in the data availability space over the 10 years. So we just announced our earnings or our revenue for the first time just last quarter. Last year we did $607 million in total revenue and that's at a 28% growth. So we're a very high growth company even though we're a significant run rate of revenue. We've got 2,500 employees worldwide. We'll grow that substantially this year. We've got 240,000 customers worldwide. We're growing 4,000 new customers a month. So we're really a growth company, but we're a privately held company. We like it that way. It allows us to do things that public companies might not be able to do because of their quarterly reporting requirements. We can make investments where we think investments need to be made for the future as opposed to having to always watch the profitability. Yeah, the three-day shot clock, as they say, or the quarterly shot clock. Not even the shot clock, I mean. So you guys are very successful. Congratulations. And that's, by the way, a great story that you guys kind of act like a public company without being public. So it's like the best of both worlds. You guys are doing well. Congratulations. What's the secret sauce for you guys? Just for the sound, we'll get into some of the questions. We have some specific questions about IBM American X, but why is Veeam winning? What's happening? Because you guys are really moving the needle. Quickly explain the secret formula of why Veeam is so successful. Well, I think it cuts across a couple of different dimensions. One is we have a really great culture within the company. And so we have a culture of innovation. People feel like they're invested in the success of the company and everybody is joining in that. And I think that really helps. We have great technology. We used to have, it just works tagline. Customers love that, particularly when they talk about their backup and data protection solutions. They don't want to have to have people monitoring it on a regular basis. It just works. So I think customers love the technology. We have a great employee base, great executive team. And we have great partnerships like the one here with IBM. And I think those are all key to the success. So I want to go back a little bit and sort of set the table on some of the big mega trends that led to Veeam's ascendancy. When you go back to the early days of virtualization, you had this situation where you had underutilized servers and then Veeamware essentially allowed us to consolidate those servers and dramatically increase the utilization because applications running on these servers were the servers were highly underutilized. The one application that needed all that sort of dedicated server power was backup. So when virtualization went from nothing to whatever, 60, 70% of the market, backup got choked and it needed an answer. And one of those answers was Veeam. And it shot up and exploded as a company. It went very, very well. And you guys have more to it than that, distribution channels and so forth. Now we enter the cloud era. And people now talk beyond backup about availability. So what can we learn from the virtualization era? What's similar? What's different now? And why is the discussion shifting from one of backup to one of sort of always on availability? So it's a really, really good question. And if you think about the trends that we've seen, we've gone through this trend to a completely virtualized world. Yet when we still talk to CIOs and Veeam's gone out and done studies where we've talked to CIOs and when we talk to them, we hear that they still have the same challenges that they've had in the past and that is over 90% of them are still saying that their most critical needs are application uptime and their access to data. So when we go out and talk to hundreds and thousands of CIOs, they say we still have these needs, access to our applications and access to data. Yet when we talk to them about how those needs are being met, over 80% of them say there's this gap. There's this gap and though while they still have those needs, those needs are not being met and we call that the availability gap, right? And Andy and I were talking this morning over a cup of coffee and he said, you know what the availability gap is? He said, think about it like this. Think about when you're using your cell phone and that cell phone is going down to 10%, 9%, 8%, 1% and you get that feeling inside that I'm about to lose service and we all know that feeling when you lose connectivity on your cell phone. Now think about that as the CIO or someone who's relying upon that data. That's the availability gap that we see in the marketplace and that's the gap that beam bridges, right? We bridge that availability gap. So we've addressed that from a virtualization perspective and now moving into the physical world too. But now as we move forward, we're seeing another dynamic change in the marketplace of course and that's cloud. Now consumers want to think about different ways to consume technology. They want it on-prem. They want a managed solution. They want it in a public cloud. They want it in a private cloud and the way beam addresses that solution is essentially by saying, however you want to consume your technology, that's okay by us. If you want to consume your virtualized environment and have it backed up on-premises, fantastic. If you want it backed up and managed by a managed service provider, that's okay too. If you want to have that data and information and back it up in a public cloud, great or in a private cloud or move it between those environments, we'll have the solutions to meet those needs. So we're going to meet this need of having uptime of applications, uptime of data and availability of data, minimizing that availability gap that these CIOs are facing and allow them to manage and run data and applications and have it available to them no matter what scenario or platform they're running it in. So that's a vision that's more than just selling backup insurance, right? Absolutely. I mean, you just kind of answered it but I'll ask it generally. How do you guys communicate your vision to CIOs? Well, I think we communicated just like Matt said. You know, when you talk about backup it's kind of a, that is sort of a yesterday's story. It's really about making sure that those customers can get access to their data and that they can keep their applications and frankly their business is up and running. So when we go in and have a conversation with a CIO we can delineate for them the specific business impacts of not having a robust available availability platform. And you know, and that takes on different dimensions from a product perspective. So it's not just backup and recovery anymore. It's backup and recovery, but it's availability. It's, you know, how do you orchestrate data across platforms? You know, these are the sorts of new issues that Veeam has been addressing for the past few years and I think it's what gives us an advantage in the data protection space. Now it's a very competitive market. A lot of legacy vendors of which IBM is one of them but yet you're here at Interconnect as a major IBM partner. Yes. You just understand like what the relationship is with IBM, you know, where it fits in the organization. Is it just cloud? Is it across the entire organization, Phyllis? Yeah, so it is a strategic partnership for us. It's not just a single business unit partnership. We're across the business units inside of IBM. And you know, sure, there's IBM Spectrum Protect which is a competitive product but there are so many more opportunities for Veeam and IBM to win together that, you know, we're not going to worry about the few areas where there's some overlap. We just announced a few months ago that we're integrating, doing snapshot integration for IBM StoreWise and Sand Volume Controller which we'll provide in our next version, version 10. It's coming out later this year. And that's a big thing. We don't do storage integration, snapshot integration with all storage vendors. So when we make a commitment like that it's a meaningful commitment to the partnership. But the genus, and so we have this great relationship on the storage side and other parts but the genesis of the partnership actually started in the cloud area with Matt's team and some guys on Matt's team that really drove hard to get a foothold in the relationship. So I'll let Matt talk about the cloud relationship. And it's been, thanks, Andy. And it's been a great relationship because while Andy focuses on the global alliances I have a little bit more of a narrow focus around the cloud which really isn't so narrow. So we allow, we tend to team up together very well. And what really got our relationship kicked off was having the VMware cloud foundation that which runs on the IBM cloud where Veeam is the essential backup product that runs the management components of that platform. So anything on the VMware cloud foundation which sits on the IBM cloud platform is backed up and managed by Veeam. So that was now available, that's now available. And that was really the genesis of the relationship from a cloud perspective, so that was very, very exciting. And BlueMix is in the mix, is that it? They're in the mix, BlueMix? BlueMix is in the mix and that Veeam cloud foundation actually leverages the BlueMix platform. And then there are several layers of the BlueMix cloud platform and now we're going to be in the BlueMix catalog, what is called the IMS catalog, which will be for everyone who's looking to provision a cloud service can go ahead and pull down and choose to provision Veeamware and some infrastructure and other services and have it backed up by Veeam. So that deal between IBM and Veeamware was a real catalyst for your relationship, which is now, of course, Veeamware's done other deals, they just did one with Amazon recently, but my understanding is the IBM relationship. That's been clear, it's multi-cloud world. So the thing that's clear from this show is multi-cloud is what's happening. Well, what this has given us the ability to do is say, no matter what your customer looks like, there's an opportunity for us to partner and work together. So if you think about the VCF, the Veeamware cloud foundation might be some organizations that are enterprise in scope, that have a large on-premises type of deployments who are looking for large automation platforms that are looking to automate and move into the cloud or maybe move back from the cloud to on-prem, right? But nevertheless have these very high-end availability needs, right? And business continuity needs. Now, if you think about the IMS platform in Bluemix, which might be a traditional hit the keyboard and looking for some infrastructure that you might spin up in a board and the cloud company, right, from day one, we'll have some services available there for you as well. So you can go from a small SMB company that might be born in the cloud to a legacy Fortune 100 company that has some kind of cloud foundation needs, and between the partnerships of our organizations, we have solutions to meet those needs. The only interesting things to me about Veeam is when you started out, it was like when you were in your eating glass mode, you were going to V-mugs and doing all that sort of hard work with the hardcore VMware practitioners, now you're on your way to a billion dollars. And you're striking partnerships with companies like IBM. How have the conversations changed in terms of who you sell to, who you're interacting with? Obviously more CIOs are probably paying attention to the investments that they're making. How has that changed? Well, you know, just from the Veeam perspective, these partnerships are extremely important. Companies like IBM have relationships with enterprises that go back, you know, decades. And for us, that's an opportunity for us to leverage their trusted advisor status with those decision makers in the enterprise. You know, our business started and we have a very robust, small and medium-sized business. We have a strong and growing enterprise business and we're looking for the enterprise as our growth vehicle to get to a billion dollars. So partnering with enterprise-class partners like IBM is really a key force. I mean, you guys can bring your value proposition pretty much to any environment, to your cell phone analogy about the battery pack, which we've all kind of seen. But, you know, Dave's on Verizon, I'm on AT&T. So this is the same dynamic in the cloud. This is where you guys are looking for the growth. Is that kind of like getting that right? Yeah, I think that's a pretty good analogy. The way I kind of think of it is, we have the best solutions in the marketplace for availability needs. Regardless of the size of the organization, the end-user needs, regardless of the go-to-market strategy and regardless of the platform. So by building and as we move, continue to move up market and aggressively build partnerships like the ones with IBM, it allows us to address the business needs no matter what those business needs are. And partnerships like the ones with IBM allow us to scale to great lengths. Matt and Andy, I want to ask you a question for the folks watching, because here at IBM Interconnect, the IBM relationship you guys outlined. What's the major to do for Veeam this year? I mean, in terms of like, as you accelerate, you've got 600 million in revenue. What's the core message that you send in the marketplace in terms of where that growth's going to come from? What's the tag? What's the bumper sticker for Veeam right now? I think it's around the cloud. I think that's an area where we're putting a heavy investment. We're hiring great people. And for us, we see that data protection is going to have to span the cloud environment. Now it's going to be on-prem, it's going to be in the cloud, it's going to be a hybrid, but from our perspective- It's everywhere. Yeah, becoming a much more robust in the cloud is really going to be a focus area for us this year. Yeah, I would agree. I would tag onto that, continuing to scale into the enterprises very aggressively. We've built out a large enterprise organization strictly focused on the enterprise. We've had the technology to address the enterprise needs, but now we've dedicated sales teams and organizational structures just to address the enterprise and continuing to bring out our cloud sales organizations and make sure that everyone within our organizations also has a benefit by not only understanding the cloud business, but our sales teams are compensated to sell cloud solutions, right? So it's not like we have a stovepipe organization that just goes sell cloud and then somebody else who goes out and sells an on-prem solution. We have teams that are focused on compensation that works together so that our teams can go out and send the message of consumption's your decision, right? We want to help you make the right business decision. We want to help make the right technological decisions, but how you consume, that's up to you. And we're held here to help you coach, here to help guide, here to help show some maps on how you can do that. We know we have the right availability solution no matter what needs or what consumption model or what path you want to go down. And the enterprise has certainly changed. You guys understand the enterprise readiness and you got product leadership. So that seems to me to be the magic. Well, hence the relationship with an organization like IBM for sure, because that helps us bridge those gaps. Well, congratulations guys for great success and good relationship to IBM. Great story. Love the story of being private with this kind of transparency. It's rare. And so congratulations in the math. Thanks for joining theCUBE. More live coverage. Stay with us all day. Day three of exclusive coverage of IBM Interconnect 2017. I'm John Furrier with Dave Vellante. Stay with us more after this short break.