 Server virtualization really stresses backup. Why? Well, think about it. Why do we consolidate servers? Because servers are underutilized. What's the one application that is not underutilizing servers? Backup. When you do a backup job, it's a big honking stream of data and it sucks up a lot of compute power. So when people consolidate servers, there's less physical resources available and this creates stress on backup administrators and VMware admins to actually complete backups on time. VMware becoming aware of this problem as a residual ripple effect of its success created VMware consolidated backups, which really didn't solve the problem. It then subsequently released VADP, the VMware APIs for data protection, to the ecosystem and said, hey, ecosystem, software companies, go solve this problem. And they largely did. In addition, VMware has VDR, which is a free piece of software to protect data. It's really to help small businesses. It's out of the box. It's part of vSphere. Well, today, we have Rob Emsley with us to talk about some news. It's the next generation of backup for small and mid-sized businesses. So this is Dave Vellante, wikibond.org. Rob, welcome back to theCUBE. Hey, Dave. So big news, you guys got an announcement. I'll let you tell the folks what it's all about. Well, it's a couple of things. I mean, one, it's first to reiterate VMware's announcement of vSphere 5.1 earlier today with respect to the introduction of new capabilities for their customer base. And one of those new capabilities is in the backup and recovery market with the introduction of vSphere data protection, which is a new product, a new virtual appliance that effectively replaces vSphere data recovery, which you mentioned earlier. And really, the connection to EMC is that VMware decided to select EMC to deliver vSphere data protection as an OEM product offering based upon EMC Avamar. And that's very exciting because, as you know, EMC Avamar has been delivering backup and recovery for VMware customers for many years. So we were very happy to partner with VMware to introduce vSphere data protection as the new backup and recovery capability that is licensed with vSphere 5.1. I bet you were very happy about that. Essentially, VDP is powered by Avamar. Every 5.1 customer is going to get, essentially, Avamar powering VDP, broadly distributed. Well, congratulations. That's big news. Why Avamar? I mean, you guys own VMware. Is this an inside deal? Why Avamar? No, I think what it comes down to is the unique capabilities that Avamar delivers and the fact that Avamar has been delivering a virtual appliance itself with Avamar Virtual Edition for several years. I think the integration with VADP, which you also mentioned earlier, is a unique set of capabilities that Avamar delivers, not only for backup, but also uniquely for restore. So I think that the capabilities of Avamar and the ability for us to work with VMware and provide effectively a good complementary deal that makes sense for both them and us was really a good driving factor for how we got to where we are today. So this effectively replaces VDR, as you mentioned. Now, VDR, again, we've talked about this in the past. It has mixed signals. A lot of users early on complained, well, 90% of my backups actually failed. And that's a common problem. Backup's hard. Being a backup software vendor is not a trivial issue. And let's face it, VMware has got a lot of stuff to do. So presumably, powered by Avamar, Avamar is a backup software. You guys know what you're doing there. I wouldn't expect those types of trip-ups out of the gate. Can you confirm that? Can you comment on that? And specifically, really, where should customers use this versus a more fully functional, higher-end backup system? Yeah, so I think the target customer for VDP is going to be in the smaller part of the market. Just like VDR, the new vSphere data protection is really targeted at environments that have virtual machines that are measured in the tens to the hundreds. Each virtual appliance has the ability to support probably up to 100 virtual machines, but very much dependent on how much data you're actually backing up. And that becomes very, very key. Because I think when you start looking at requiring multiple virtual appliances to back up your environment, that's when you start looking at, should I have a backup and recovery solution that scales and consolidates more of the backup and recovery capabilities. And I think that's where I think what we will hope to see is customers that use VDP maybe for their small type enterprise deployments, maybe departmental base usage. But clearly, one of the things that customers will be able to consider is if they have larger requirements, then that's where a move to EMC Avamar would give them the ability to effectively move from a VDP implementation to an EMC Avamar implementation whenever they need to. OK, so the backup software is free. It's bundled in with 5.1. So presumably, you're not getting paid a lot for this type of deal. Can you talk about what the arrangement is between VMware and EMC and how you get paid? I mean, that's kind of internal plumbing at the end of the day. I mean, we have an OEM relationship. And like all of our OEM relationships, we don't really sort of publicly share kind of the nuts and bolts of the mechanics. But certainly, if you think about any type of company-in-a-company activity, we do things which are mutually beneficial to both of us. Yeah, so OK, fair enough. Should we think about this then as a freemium model? I think a Dropbox, right? Give them a little storage for free. And then when they fill up their Dropbox, sell them more. Is that kind of the strategy here? As people get used to Avamar, they like it. They like the processes and say, OK, now I've outgrown the free version I need to step up. Is that how we should think about this? I think that's one way. I think that clearly I think that customers' requirements for backup and recovery change over time. I think that it makes sense for VMware customers to take a look at vSphere data protection, especially as it's a new offering within the vSphere 5.1 overall capabilities. And certainly, I think with the knowledge that the VDP is based upon a well-deployed industry-proven solution with EMC Avamar, I think we'll just give customers, I think, a level of interest into what options that gives them going forward. What do you expect from the backup ecosystem? I mean, obviously, VMware has to, and despite the fact that they're owned by EMC, they've got to play Switzerland because it just helps them. How do you think the competition is going to respond? I think that just as with the availability of VDR within earlier versions of vSphere is you really still have a lot of vendors that are providing backup and recovery. So clearly, that gives customers choice. And I think that the introduction of VDP just introduces a new dynamic to the choices that customers have. And I think we'll see what some of the reaction is from other members of the backup and recovery market. So I think, in general, we're seeing the evolution of the backup space within VMware. Specifically, we saw this problem emerge several years ago that backup really gets stressed. VMware began to solve the problem. They looked to the ecosystem to solve it. This seems to be coming a more hardened capability inherent to vSphere with a lot of choice left over from the ecosystem. It's kind of the message that I'm hearing. Is that fair? Yeah, absolutely. I mean, I think if you think about VDP, one of the things that you'll see is that VMware will look at how many options of VDP they should offer. I mean, clearly, you've got what was introduced with vSphere 5.1 with bundled and licensed as part of the vSphere. VMware began to solve the problem. They looked to the ecosystem to solve it. This seems to be coming a more hardened capability inherent to vSphere with a lot of choice left over from the ecosystem. It's kind of the message that I'm hearing. Is that fair? Yeah, absolutely. I mean, I think if you think about VDP is that one of the things that you'll see is that VMware will look at how many options of VDP they should offer. I mean, clearly, you've got what was introduced with vSphere 5.1 with bundled and licensed as part of the vSphere business model. But I would expect to see as we go into 2013 to have a more functional and feature rich version of VDP available for customers to evaluate. So I think that as well as the option of using a commercially available application that doesn't come from VMware, and clearly, we would like more and more customers to make use of EMC Avamar. And we hope that this development and this relationship with VMware will certainly lead people to evaluate EMC Avamar in a very good light, based upon their experience with VDP. But we also expect to continue to evolve our partnership with VMware on other versions of VDP that they themselves can take to market. Yeah, it's a very competitive market. Certainly, your CEO, Joe Tucci, frequently talks about VMware's need to really balance the ecosystem and serve the ecosystem. And certainly, at senior levels of EMC and VMware, frankly, VMware throughout, that message comes through loud and clearly. On the other hand, you're not paid to play nice, are you? And so we would expect you guys want to compete vigorously in the marketplace and get your fair share. Yeah, I mean, the opportunity for backup and recovery continues to be massive. I think if you look at both the opportunity for backup software, if you look at the opportunity for purpose-built backup appliances to store backups, I mean, it remains one of the largest opportunities at the moment. And I don't think we've seen so much transformation taking place in the backup market for several years. I mean, for the longest time, backup was kind of evolving fairly slowly. But I think over the last probably five years, with the emergence of dedification and with the emergence of virtual infrastructure, becoming more of the norm rather than the exception, the opportunities for backup and recovery solutions has become vast. And I think that's really what has benefited the backup recovery systems division inside of EMC is because we really have both the products and the resources to go after that opportunity. And the number of conversations we have with customers about VMware backup and recovery is very, very large compared to other parts of the infrastructure that were asked to protect. Yeah, virtualization hasn't been very disruptive to backup. I mean, it's, as you know, been a software-led business, and people essentially get locked into the processes, and they don't want to change. They really can't change. Virtualization has forced them to change. So this is a big deal for you guys, because you now get to see the base with a product that's right out of the box. It's kind of invisible to most people, and it's just there, and provides a good growth path. So congratulations on the announcement. I'm sure it wasn't a trivial to get VMware to get to the point where they're actually going to bundle it in. So that's a big move, and we'll be watching. Sounds good. All right, thanks very much for coming on theCUBE. Thank you. And sharing this news with us. So check out siliconangle.tv, check out siliconangle.com and wikibon.org for breaking analysis on this and other news. And thanks for watching, everybody, and we'll see you next time. This is Dave Vellante.