 Live from San Diego, California, it's theCUBE. Covering Cisco Live US 2019. Brought to you by Cisco and its ecosystem partners. Welcome back to Cisco Live 2019 in San Diego, everybody. You're watching theCUBE, the leader in live tech coverage and my name is Dave Vellante and I'm with my co-host Stu Miniman, Lisa Martin is also in the house. This is day three of our coverage. Danny Allen is here, he's the vice president of product strategy at Veeam and one of the key thought leaders at the company, one of the main figures at Veeamon, which we were just doing three weeks ago. Danny, great to see you again. Wonderful to be here with you. It was a really fun show, Veeamon, it always is. You guys got a cool vibe. You chose the Fontainebleau Hotel this year in Miami, Miami Beach, which is just a great location. Many thousands of customers and you guys hit some milestones recently. You talked about, you know, billion dollars in revenue. It's been something you're going after for a while. You've seen that happen. Of course, things changed, right? All the subscription stuff started to happen. That slowed you down a little bit, but that's awesome that you guys finally hit that. So congratulations, raised a big pile of dough and you just keep moving that ball forward. Give us the update on Veeam. So as you said, Veeam has a great culture, right? There's a passionate green army out there that loves us and we're thankful for that. We hit one billion in bookings for the trailing 12 months, we have 350,000 customers and the business is going well. One of the interesting things about Veeam is because we're private, we actually have the opportunity to decide when and how we do things, like switch from perpetual to subscription type bookings, but business is doing great. We love it, we're glad to be here. One of the things that you talked about at Veeam on was kind of getting back to the basics. You talked a lot about, look, it starts with backup. There's a lot of noise in the market today. You hear a lot about, you know, data management. We talk a lot about data assurance, but at the end of the day, it starts with backup. That's something that you gave a lot of thought to. I mentioned that you were one of the thought leaders at Veeam. Double click on that, add some color. What were you thinking in terms of that being the starting point and that really driving a lot of your messaging at Veeam on? Yeah, I always say it's three things, right? This is a journey that we're on and I get excited about the end stages of that journey, but how many people actually have a budget for machine learning or blockchain or artificial intelligence? No one has a budget for that. What they have a budget for is backup. And so we believe, A, it's a journey. B, it does start with backup. There's a budget for that. And the key thing is choose a partner for this journey. And we believe Veeam is the right partner, obviously, to choose for that, but we really wanted to go back to who is spending money to buy the products. And for that, it's the technical decision maker who has a budget for backup today. Yeah, all right. So, Danny, we talk about the Cisco relationship and budgets like you were talking about there. Cisco UCS was, you know, from day one, a heavily virtualized environment and therefore had strong affinity with Veeam there, but you've got some great visibility into where UCS is going, what CI and HCI solutions are really starting to gain traction. So talk a little bit about that partnership and which ones of those Cisco solutions are really starting to, you know, kick in the market. We have a great partnership with Cisco, first of all, and really in two areas if you're talking infrastructure. So on the Hyperflex, the conversion infrastructure, but also on just the S3260, for example, a storage dense system. And we have a target this year, this public information. We have a target, a joint target of $100 million. We're actually at 80% of that right now. Business has been doing really well. In fact, we've been on their global priceless now for 18 months, and in 18 months, we've actually closed over 350 transactions. Like it's been going really, really well. And here's what's exciting about that. Those customers that are spending money on Cisco gear with Veeam software, they might start in the drag. These are quantifiable numbers. It's about five to one. So every dollar they spend on Veeam, it's about $5 on Cisco. But over 35% of those customers within 12 months come back and buy more Cisco gear. And actually, if you look at the actual drag, quantifiable drag that we're bringing for Cisco, it's 11 to one. So for every dollar they spend with Veeam, they're spending $11 in Cisco HyperFlex or S3260. So it's been a great partnership, both for us, obviously, because we're on the resell list, but also for them. And you said you're 80% of the way there. We're talking a calendar year, or is that a fiscal year? That is their fiscal year. So that's ending in August or July. I should know the date, but I know we're 80%. We're on track to hit that $100 million. What do you think is driving that? I mean, obviously, those are the partnership, which takes time, right? This is not just a press release partnership. What else have you done to really facilitate this? Well, I would say two things. One is their infrastructure is great. In fact, we have one of our Veeam Cloud Service providers that is protecting over a million VMs right now. So these are massive scale, are using S3260s in the back end as a repository. So their hardware actually works. But I would say the other thing that really resonates is so they have this HyperFlex solution, and on top of that they have InterSight. And that concept of a cloud management plane that can roll out the hardware, can update it not only at the infrastructure, but also the Veeam software is really critical, and that resonates with customers. It's, again, been good for them, but it's also good for us. Let's see, last couple of years, you guys have had a big emphasis on the enterprise. And then, again, we're hearing this theme of kind of back to basics. I mean, you heard at Veeam on, it starts with backup. You talk to people at Veeam on, the customers. It's the, you know, a lot of medium-sized customers, a lot of smaller customers. Do you feel like you over-rotate it to the enterprise, or do you feel like, hey, we can get there just by slow and steady, and still putting the accelerator on our core business? Can you just add some color to that and explain? Yeah, so if you go back three years, our focus was very much on the small and medium enterprise. We said we wanted to capture the major enterprise. And that, by the way, has worked. If you look, since January of 2017, we've done over a billion just in enterprise, enterprise being a thousand employees or above. So focusing on the enterprise for a few years was the right thing to do. However, that was all on the messaging side, and we had this core constituent that has been with us for over a decade now, and we didn't want to pivot away from them. So in the last six months, nine months, what you've seen is pivoting back towards the center. So we do a third of our business with SMB, a third with commercial, and a third with enterprise. So we believe we're right down the fairway now, and it's a perfect alignment to that messaging. Well, I mean, history would show that the disruptors oftentimes come from down below and move up. I mean, you certainly saw that with Microsoft in the 80s and there are many other examples. Is that part of the philosophy that you guys just can keep adding value that will appeal to the enterprise customers? It sounds like with a 30-year business, you're actually already there in terms of the functionality. Is there a functionality gap though still that you need to close in your opinion? I don't think so. We announced, as you know, probably V10 a few years ago, and what we've done is we've introduced that over the years, and so the final checkbox, if you will, for V10 is coming in our next release later this year, but that really covers off the gamut of everything that needs to be done, and that's been resonating really strongly. We believe we have a portfolio that addresses everything from the smallest customer to the largest customer. Yeah, and you don't live and die. We heard this from Ratmere. You don't live and die by your long-term product development roadmap. You tend to be very tactical and listen to customers. We're very agile, so we keep a backlog of all the things that we want to do, but we will pivot on a dime if we believe, hey, this is really strategic for our customer base. We'll change something that we had planned for a year out and do something else in the interim. Pretty judicious about how you decide there. Yeah, so Danny, bring us inside some of the customer conversations you're having here at a show. When I watched the keynotes, many of the messages about multi-cloud sound like the same kind of things that I've been hearing at V-Mallon for the last couple of years. What are you hearing from the customers at this show? Well, definitely cloud data management is top of mind. I had dinner last night with an enterprise customer. They're rolling us out across about 100 different locations around the world, and they very much wanted a local repository of data, but they also wanted to tier that data into the hyperscale public cloud. So that is clearly an enterprise-centric message, but that same capability goes down to the SMB. But if you ask me kind of what is the conversation on everyone's on the tip of their tongue, it is cloud. How are you addressing cloud? And we've done that a number of ways. One is we take the backup data, we'll tier it into cloud, we'll recover workloads in cloud. It's not so much a lift and shift. You know what's interesting is a cloud is not a charity. If you just take what you had on-premises and move it into the cloud, there's margin layered in there, right? But for some use cases, disaster recovery, business continuity, you want to be able to turn it on in cloud. And then after, it's in cloud, of course, and you need to protect it. And so we've been addressing all of those capabilities within the Veeam portfolio. Do you think there's going to be a backlash? I mean, you don't see it in the numbers. You see, you know, AWS's growth and I'm not talking about repatriation, but the cloud as a target is just another piece of infrastructure, even though it's kind of virtual, that I have to manage. I mean, it does add complexity in that sense. So do you think there'll be, there's maybe somewhat over-enthusiasm now, or do you see this as an unstoppable trend? I believe that cloud is a tool in the toolbox and it's both the smallest, most precise tool and also the largest tool in everything in between. What I mean by that is, this isn't just a lift and shift and move it over to the cloud. It's how do I leverage the cloud to extend my data center? I actually, a lot of people talk about multi-cloud. I actually think that the era is really hybrid cloud. It's how do I extend what I have on-premises into the cloud? Only now really being pragmatic about how to leverage it. The people that jumped in all in and said, I'm going all the cloud, those are the ones that you're seeing a bit of buyer's remorse, but those that are a lot more pragmatic, they're now saying, how do I deliver business outcomes? Because it's not about cloud. It's actually about business outcomes, right? Focus on the services. How do I deliver business outcomes that are improved by leveraging aspects of the cloud? Yes, so Danny, I know you've talked to our team. We look at the environment and customers today, they have multi-cloud, but the strategy has been, well, I've got some stuff here and I use that service here and wait, I need to spin that stuff over here. We've almost remade multi-vendor into multi-cloud. So the goal we've been looking for is the solution should be more than just the sum of the parts. Veeam said to an interesting layer to help customers leverage that and get value out of their data across all of those environments. So, do we see that as a viable future that it's not just the state that we're in but be able to get more value out of those pieces in the near future? Yes, so I'm obviously biased as I work for Veeam, but I think we sit at the intersection of all of this because what we do is we take services, we take workloads and we make them portable. I can take something from on-premises. I can put it in cloud A, I can put it in cloud B, I can take it back on-premises. I can move it to a private cloud provider. So we have the ability to be completely flexible and agnostic as to where it lands. And the reason why that's important, people don't go out and say, I'm going to put 50% of my workload in this cloud or this cloud, they say, I need a data center in this geography or I need a data center that has this kind of service. So the reason they end up in multi-cloud is not because of a multi-cloud strategy but because they have a business need that is met by that infrastructure. And we allow the portability, the flexibility to move the workloads as the business needs. Still, we have some data here and I want to dig into it a little bit. Can you share with us some of the fun facts? Like when, you know, maybe the timeline of your relationship with Cisco, some of the things you've done, take us, walk us through that, Danny. So we partnered with, we've had a long-standing relationship with Cisco. Officially, we went on the global price list like I said, 18 months ago. Since then, 300 and earlier this week, 359 transactions but almost a transact, two transactions every three days. And we have a great go-to-market program with them right now. So we do a lot of joint activities both in the channel as well as between, we fund heads with them and vice versa. Who's your favorite partner? You don't have to ask that. We have a lot of partners, they're all my favorite children. So we're hearing kind of this land and expand strategy. We've heard that from many other companies but it's actually happening inside of or within the Veeam ecosystem. And what I heard here was you're selling with Cisco and then people are coming back and buying more Cisco. So that's part of land and expand. But another dimension of land and expand is you sell into an organization, not only do they buy more, but other parts of the organization. You sort of fan out horizontally. How much of that is happening? It's happening quite a bit. I would say the most significant expansion right now is actually at a line of business level. And so you'll have multiple lines of business and then they will begin to coalesce together and say, okay, let's apply a central policy to that. So that's what we're seeing. What we do know is that 35% of Cisco customers that are joint Veeam and Cisco customers, they'll come back within the next 12 months and they'll buy more Veeam and more Cisco gear. Okay, last question. Why Veeam? You got a lot of competitors, obviously. This market, you and I have talked about that a lot. You got, Cisco has made an investment in one of them. Why Veeam? So, simple, reliable, flexible. And the flexible is probably the key to all of this because we don't lock people in. We don't lock them into our hardware. We don't lock them into a specific cloud. We don't lock them into any one of our children, if you will. We love them all equally. And that flexibility, future-proofing the organization is a huge deciding point for the organizations because they don't know what the landscape is going to look like two, three years from now. Is this still going to be your partner or is it not? And so having an organization that will partner with you that will be flexible in, and this isn't just flexibility at a technology level. It's also at a business of a licensing, for example. Flexibility to move licenses from physical systems to virtual systems to cloud systems to back again. They want to partner with someone that has that flexibility. Danny, great to see you again. Thanks so much for coming to theCUBE. Always a pleasure. Yes, likewise. Okay, Stu Miniman, Dave Vellante, Lisa Martin from Cisco Live in San Diego, 2019. You're watching theCUBE. We'll be right back.