 from Miami Beach, Florida. It's theCUBE, covering Veeamon 2019. Brought to you by Veeam. Welcome back to Miami, everybody. I think I just saw Don Johnson running by. This is Dave Vellante with Peter Burris. You're watching theCUBE, the leader in live tech coverage. We're here at Veeamon 2019. This is day one of our wall-to-wall coverage. Ian McClarty is here. He's the president of Phoenix NAPE, and thanks for coming on theCUBE. Thank you. So Phoenix NAPE service provider based in the Southwest. Tell us more about the company. Yeah, so we started on the Southwest, hence the name Phoenix NAPE stands for Network Access Point. So we focused on the connectivity side, on the telecom. But we really have moved more to infrastructure services, and that's been more of a worldwide deployment. Last year we did about six global locations that were net new to us. So today we're at about 15 locations. So I always ask guys like you, it's that the cloud was supposed to put you out of business and the cloud has just been this huge tailwind. What was it that everybody missed about the cloud and how have you been able to exploit it? Yeah, so we come from the hosting background. So the cloud has been around for us forever, right? Before it was a term cloud, we believed in OPEX model for infrastructure services. That's really what cloud is. Scalable, easy to absorb. So for us, what the cloud did was made us mainstream because hosting was very boutique back in the day, back in the 90s. Now today we're a very mainstream brand, very mainstream product. So cloud has really made our lives easier actually. So it opened up everybody's eyes and sort of the guys like Amazon and Azure did a lot of market development for you. They did a lot and a lot of market development that we ourselves cannot do because we're smaller companies. Right, so talk a little bit about what your unique value proposition is, how you guys compete in the marketplace. Why Phoenix NAP? Why Phoenix NAP? So it's really about the suite of infrastructure products. So our spectrum really starts with colocation on one end and it ends up to bare metal dedicated cloud systems. And then in between we have all the virtualization platforms, more standard VMware deployments. So it's really about a spectrum of services that we cover and we really are really good at that spectrum of services. So we have developed a lot of depth also around these different offerings. And your facilities, you started in the Southwest but where are you guys located? Yeah, so we own and operate out of Phoenix, Arizona, 120,000 square foot facility with IT usable space. And we have expanded now with other partnerships with taking on large co-location spaces to basically seed our different locations. But at some point we were building those locations. Ashford is one that we're getting very close with actually. So you're data center guys, right? I mean, you know- Well, we're hosting guys that went into the data center business and became infrastructure people. Okay, so you've sort of evolved. This is actually for you. This is actually, yeah. Actual there. So how have you evolved your skill set, your customer base? Talk about the evolution of the company and where you see it going. Yeah, so I mean, today we're focusing very much on mid-market enterprise. That's where our, and again, how do you define that? We define that by 50 to 500 million in revenue. That's our definition of mid-market enterprise. So we're not going after the Fortune 500 and we're not going after SMB. And we have really tapped into the space. It's a very hard space for the public clouds to act in today. So what's different? So obviously the difference between mid and large enterprises is the mid-sized guys, they're more generalists. They don't have all kinds of specialists. They don't have the resources that the large guys do, but they're more advanced than the S. Yes. S and M are different than large. Yes, they are. So what are the unique attributes of M that really you try to focus on delivering? So M has budget, but M doesn't want to outsource. That's key. They know enough, but they don't have expertise. So what they're looking for is they're looking for supplemental IT. And that's really what we focus on. So they don't want to outsource their strategic jewels, their family jewels, but they need supplemental help. And they don't want to go to consultants either. But M also wants to be L. I think that's a big issue. M wants to be L, typically M wants to be L. So they're looking for, they have budget, they have plans, they want to scale, but they have to be very careful about how they invest to get there. And then like the server hugs still. They like to touch the servers, like to touch their infrastructure. They want to know you, they want to build a relationship. That's what I'm saying. It's very hard for the public clouds to tap into that space because of that. It has a lot of nuances. M wants to scale, they want to act like a real business. They want to know their suppliers because they want to know if they're going to be able to go with them. They want to have control over the suppliers as well. Exactly. But come back to that because that becomes, that becomes more increasingly a services play. As M gets more experiences, these medium-sized companies get more experience. They are starting to acknowledge and recognize the new classes of services that they need because they have that sophistication. So how is your business changing and specifically thinking about what Veeam's doing here to become more of a service provider of, at a higher level than just the underlying infrastructure? Yeah, so I'll tell you what we're doing right now. On the server side, we're really focused more on managed infrastructure, right? That's the domicare we use. But what infrastructure means is really changing. So today our conversations internally are about Kubernetes, right? What are we going to do to have a managed Kubernetes stack that is deliverable in an API model? That's our vision for the company. So you're a platinum partner of Veeam. Can you talk a little bit about where they fit in your stack? I mean, you've got a whole security layer. I think you were saying to us earlier that the data protection piece, the backup, is sort of the last resort. It's a lifeline. It's a lifeline, right? So describe that infrastructure and what you guys have built up. Yeah, so when we started the company, we started at the edge, right? Let's focus on deos mitigation. Let's focus on network protection. Let's start there. And then let's work our way down. And so now then we've built a VMware stack that basically is third-party audited. It follows compliance rules. When you go to the, for example, PCI, when you go to the PCI website, you can see Phoenix tab listed as DSS provider there. And it actually outlines what we protect on the cloud side. So very clear and where we transferred on that side. So it's been layered for us, a layered approach of protecting services. But there will always be a breach and you have to count on that. And it's unfortunate, but it's a reality, right? And once you embrace that, you can build products around that. And so really VMware has become a very key part of that equation with both backup and recovery services. And then if there is a breach, then you need to be able to recover those services somewhere. So disaster recovery services for us is big. So it really fills that missing piece that we had in the equation. Yeah, I mean, you've made that point, Peter, many times is that the breach is inevitable. It's how you respond to that breach that's really, really critical. And that's, I mean, I'm not brand new thinking, but it's certainly over the last 10 years has evolved. You've got to embrace it. People used to not talk about breaches. Oh no, don't talk about it. Now it's like at the board level, yeah, we acknowledge that it's going to happen. And we're putting more and more resources into our response. Is that sort of what you're saying? Yes, that is exactly what I'm seeing. And I mean, this year alone, 50,000 breaches that were reported, right? And again, who reports those breaches? It's not the S and it's not the M. It's a large enterprise that reports those breaches. So those numbers are even worse in the S and M market, right? Right, right, yeah. Although the M guys are now getting large enough and they have to report. They have to start reporting. Yeah. We're coming back to this notion that, and it used to be that when there was a breach, it was always discussed in terms of hardware, it was discussed in terms of network, but now it's data. It is. Because that's where the asset is and that's what people are going after. Exactly. Coming back to that notion of higher level services, backup used to be something that you kind of checked off as you were leaving the customer's location, taking the order. Has it become something that's increasingly one of the reasons why customers are bringing you in? I will tell you, the easiest way for us to get, another part where Veeam falls into our equation is customer acquisition. Like Veeam to me, it's not the highest revenue product period, right? But from a customer acquisition perspective, it's the best product that we have. It's an easy conversation because it is. Historically, it's been a checkbox, but once the customer figures out, hey, okay, so I got backups, now how do I recover these backups? How do I restore them? Where do I go? That's where we have a much more complex conversation with them. Well, a lot of these Veeam customers to become L are now realizing I'm not going to get there if I don't use data in ways that the L guys have a hard time using it. So I need to focus on data assets. I need to focus on my digital transformation, which means it's essential that they start thinking about how data protection is going to operate within their business because increasingly, they're becoming digital businesses and data protection becomes digital business protection. Are you having those conversations? All the time, on a day-to-day basis. That's a book of our conversations right now for a new customer acquisition. Why Veeam? You know, a lot of companies out there, a lot of new startups entering the marketplace. You got big whales like Dell EMC and some established companies like Veritas, you know, IBM, you got the big blue blanket. Why Veeam? Why Veeam for us? Well, for us, part of it is the culture, right? That was very critical for us. First, the technology piece, obviously solid works, right? The, yeah, it does work the America that was used. It's true, right? And the simplicity of it too. As a search writer, I mean, we know what to expect with Veeam. So we built a lot of competency around Veeam as a product line. I mean, obviously we've played and we've used other products, but we always go back to Veeam because, again, it's evolving in a place that we like. We see where they're going for the recovery piece, right? The restoration piece. We like that as a vision piece, also that it's not talked about a lot. It's coming, right? It's always the upcoming, but for us, it's gonna displace another vendor. The second that comes out is it's a displacement of a vendor for us. So we like to vision the company. We like what they're heading. We also like, from a corporate culture perspective, what they're doing for channel-centric operate. You know, for us, it's helped us mature as an organization tremendously. You know, Ramiro hit the nail on the head when he said, you know, not the best product wins in the market, right? You have to have the company, the company that has the best sales and marketing along with that as well. So for us, you know, we have pretty decent sales. Marketing we're weaker on and Veeam has really coached us along the way to make our marketing efforts even stronger. Yeah, Veeam knows how to market. Yeah, they do. They are marketing geniuses and I love them for that, right? And I have a lot of respect for them for that, so. Veeam, thanks so much for coming on theCUBE. Thank you. It was great to have you. You as well. Thank you. All right, keep it right there, everybody. Peter Burris and Dave Vellante. Veeam on 2019 from Miami. You're watching theCUBE. We'll be right back.