 From Miami Beach, Florida, it's theCUBE, covering Veeamon 2019, brought to you by Veeam. Welcome back to Miami, everybody. We're here at the Fontainebleau Hotel. You're watching theCUBE, the leader in live tech coverage. This is day one of our coverage of Veeamon. The third year that we've covered Veeam, they've selected this great location here in Miami. I'm Dave Vellante with my co-host, Peter Burst, Ratmir Temishevus here. He's the co-founder and executive vice president worldwide sales of Veeam, business guru, sales and marketing, Maven, very successful entrepreneur. Welcome to theCUBE and thanks so much for having us here. Thank you, Dave. Thank you, Peter. Thanks for having us. Thanks for doing this at our event. You're very welcome. So first of all, congratulations. You hit that billion-dollar milestone. You predicted it back in 2013. You missed it by about six months, Ratmir, you know? But really great trailing 12 months, a billion dollars in revenue. That includes, of course, your ratable revenue, the subscription revenue, which you could have predicted that back in 2013. So amazing milestone, congratulations. And great venue here. You must be really pleased with the turnout, a couple thousand people. Your thoughts? Yeah, absolutely. I personally love Miami. This is the best city. Always sunny, always ocean, always blue sky, awesome and always sand. Like that's the best place. So I've always had a dream to have Veeam on in Miami. So the dream comes true. We have over 2,000 people here and many more watching live stream online. Very excited, very excited. Well, Veeam has always been a hip company, always a lot of fun. This is obviously a hip place, a good fun part of the country. Let's talk about Act One and Act Two. Act One was, you guys really rode the virtualization wave. And you talked today about Act Two really being cloud and hybrid cloud, hybrid cloud data management. What are the similarities and the differences between Act One and Act Two? Yeah, so like we discussed during the keynote session, every 10 years or so, there is a major industry transformation. Transformation shift from one platform to another platform. So Veeam, where 10 years ago, created this technology virtualization that dramatically, fundamentally changed the way the modern data centers are built and managed. And Veeam was very lucky to be at the earliest stage of that virtualization revolution that changed the storage compute and the whole data center, right? So we were at the right time, at the right place. We created the new market. Veeam were back up and then we extended it to Hyper-V and HV. So we dominated that mode of data center. But in the last few years, we expanded our platform. So beyond just the virtualization, we added the physical support, the unique support, the cloud support. So now Veeam represents a broad, what we call Veeam availability platform that supports any workloads, virtual, physical cloud. That was Act One. We dominated it. We grew from zero to one billion within 10, 12 years. We added 350,000 customers over that timeframe and and now it's Act Two. What is Act Two? Act Two is, again, the new, major industry transformation to a hybrid cloud. What are the similarities? Again, Veeam is in great position because again, we're at the right time, at the right place with the brilliant product. We have the broad ecosystem of our channel partners. We have a broad customer base, 350,000. And we have great technology partnerships with HP, Cisco, NetApp, Nutanix, Pure and others. So as well as AWS and Microsoft and Google and IBM cloud. So we are in extremely great position to dominate this second wave, what we call second act, which will be the next decade of hybrid cloud. Yeah, so optionality was a key, being able to support multiple use cases and supporting different environments. You're well positioned, you're saying, in Act Two. You know, Act One, you really didn't have a lot of competition. You kind of schooled the competition. I think Dell took out some of your early competition and you ran circles around everybody else. Lot more money pouring into this space. Now you showed a slide 15 billion. You've got a 15th of it. Tell us again why you feel like you can, you just used the word dominate. With all this competition, you got the big guys now sort of learning from you and sort of trying to copy some of your moves and maybe pre-announcing some stuff to try to freeze the market. What gives you great confidence that you will dominate Act Two? Again, we have a history of innovation, right? So we know that there are new requirements for the hybrid cloud, right? People not only want to protect the data they want to make sure that when they move to a hybrid cloud, when they put the workloads in a public cloud, that data is protected, is secured and protected. So that's one capabilities that customers are looking for. Another capability, they want to be able to move the data back on-prem or between the clouds, what we call cloud mobility. So they want to have this flexibility and freedom be cloud agnostic or avoid the cloud lock-in, right? So they want to also make sure that from compliance standpoint, they're able to move the data if needed. Another use case is that they want to leverage the cloud for different data protection capabilities. For they want to leverage the cloud for backup, for disaster recovery, as well as for long-term retention, what we call cloud tier. So they want to put the, instead of tape, they want to replace tape with the public cloud low storage. So they want to use the cost and the scalability of the public cloud for long-term retention. So all these use cases are extension of our platform. So we already have the, we own the one component of the hybrid cloud, which is on-prem, modern data center, or what some people call private cloud, right? So we already own one component and we have 350,000 customers. Most of these customers are going to deploy hybrid cloud. In fact, according to our survey, 73% of our customers are deploying or planning to deploy a hybrid cloud. So most of them are thinking how to leverage the performance, the scalability, and the elasticity of the public cloud. So we own this component. We have the capabilities and we are developing further capabilities for the public cloud. And with our orchestration on top of it and monitoring and analytics capabilities, so it's a complete solution. So I mean, I want to build upon this notion of Act One and Act Two because good for you guys over 10 years, but the industry also is going through an Act One to Act Two when you come right down to it, where data for the first 40 years of this industry was about recording events that had happened and now data going forward is becoming a strategic asset that's actually shaping the events that are happening or will happen. And it requires a new approach, requires that data be regarded as a strategic asset and capabilities have to be established to support that data. I'm especially interested in the with V introduction that you made because it suggests that you guys are going to look to an ecosystem to bring that degree of specialization and uniqueness and invention on top of your platform to serve a rapidly expanding range of strategic capability requirements when we think about data protection, data assurance. Is that, do you see it the same way? Absolutely, yeah, 100% agree. Like I talked about that briefly during my keynote. We see that there are these four technology superpowers, what Pat Gelsinger from BMW calls technology superpowers and those are the cloud, mobile, artificial intelligence and age, internet of things, right? So all these four technology superpowers, they, the biggest producers and consumers of the data, right? So, and it has to be both in the cloud and on the edge, right? So the whole, the new products and services are built on that data. Either we're talking about self-driving cars or we're talking about breakthrough in DNA research or cancer research, it's all built both in the cloud and on the edge. And Veeam has this technology called data labs. So when we've actually provide the access to the data, to a third party, to a third party in the security or compliance or analytical vendors, right? So they can build more solutions on top of our data labs. So talk a little bit about how you plan to deploy capital going forward, particularly as you try to leverage the opportunities in cloud two. You're seeing all kinds of new emerging technologies. We talk about Kubernetes and containers all the time. You've made some acquisitions in the cloud area. Should we think about your M&A strategy as just sort of advancing your ability to either form ecosystems or actually bring in cloud, more cloud-like capabilities beyond act one into act two? Yeah, I mean, first of all, we have a very powerful product and R&D group that, and partially we have this mentality kind of not invented here. So in other words, we want to invent more in-house. However, there are some cases where we need to extend our platform and we might not have the bandwidths or time, time to market. So, and we're looking at some adjacent areas in the cloud management space, in the cloud optimization, cost optimization, analytics, those areas are very interesting for us to extend our platform too. And I'm guessing that the, that NIH mentality with the acquisitions you make have to fit into that platform, that architecture. So how do you evaluate it? You say, okay, can we do this ourselves? Like you say, do we have the bandwidth? Is that technology here now? Just with Veeam help. Yeah. Yeah, all right. With Veeam, yeah, that's a great program that we announced today as well. Yeah, so the way we evaluate is that, do we have the, is this adjacent market to what we are doing? Like, for example, AWS or Azure, how close the buyer is. Or Office 365, Office 365, backup Office 365, we develop in-house. We didn't acquire Azure, we're developing in-house. So, and some technologies we are looking to acquire. The question is, is that the same buyer? If the buyer is the same, we prefer to develop in-house. If the buyer for now is different, we would like to acquire the company and let it grow and then merge into Veeam later. So your co-founder runs R&D, correct? Correct. And you run sales and marketing. So you guys fight over, okay, we're probably going to allocate the dollars, but as a specialist in data protection, you're allocating all of your R&D funding toward data protection. Presumably that helps you compete against the guys who are doing primary storage, secondary storage, all kinds of other software. So when you think about that roadmap, you told the story about how you got inspiration. You went to Silicon Valley and you were flying back and your partner said, well, you know, the best product just doesn't always win. But you said, well, so what? We not invent the best products, but you want to have the best product. So talk a little bit about that sort of organic development, how you guys think about that approach. Where the ideas come from is obviously the customer input, your knowledge of the space. Where do you see that going? So VIM, we believe is very different from other companies. First, we don't build a long-term roadmap because the technology is changing so fast that we want to keep that flexibility and agility to change our roadmap. So we only disclose our release that we imminent like within the next six, nine months, we already know beyond that we don't provide the roadmap. We have the vision, but we don't have the roadmap with the exact specific days. But it's not a waterfall thinking, it's sort of more agile applied to our idea. Exactly, agile and flexibility. That's what's agility and flexibility. That's what's most important. Like for example, a year ago or even two years ago when we announced version 10, we didn't know that object storage will become such a needed hot thing that all our customers are asking for, including the on-prem object storage and the cloud object storage. So we changed our plans and we put lots of resources into the object storage. And we finally released the best capability to use the object storage. We believe that object storage is the next cool thing in cloud data management because it will provide 10 times more capacity at the 10th of the cost and 10 times faster performance. So it's like it's the next cool technology. That's just one example, right? Another thing is that what differentiates VIM in terms of R&D and product strategy is that if we release the feature, we don't do it as a marketing checkbox. Like we do cloud storage or we do object storage or we do this or we support Azure. No, when we design the feature, we think about is that gonna be really, really valuable so that our customers when they get it, they say, wow, that's exactly what I needed. So we don't do as a marketing checkbox, we do it, we do provide. And our customers really value that. They expect from VIM that that when VIM releases something, it's going to be useful. And easy to use. Easy to use and very useful. Well, that's important because when you're on offense, you don't have to do checkbox marketing. We know that a lot of times companies will do checkbox marketing because they'll hear it in the field. The innovator has it. Oh, we have it too. And when you really peel the onion, you see the differences start to move forward. Okay, so let's talk a little bit about customers. You had United Health on today. What are you hearing from customers? Where do you get your, what are the customers saying that are that inspiring you and your team? Yeah, again, today's conversations with the customers, they start with the modernizing the, continue modernizing their data center, continue, a lot of customers still use the legacy backup solutions. They want to modernize, but the conversation quickly shifts to the hybrid cloud. How Veeam is going to help me not only modernize the backup data management on-prem, but how Veeam is going to help me to move to the cloud, manage the data, orchestrate the data movement in the cloud, and maybe if needed, bring the data back for compliance reasons, right? So that conversation always occurs with any size companies. In fact, according to our survey, 73% of our customers say that they have a hybrid cloud strategy. Only 10% say no, we will always stay 100% on-prem. And about 15% say I will move everything to a public cloud. The huge majority is in the middle, 73% have the hybrid cloud strategy. Yeah, so that's kind of answers my next question, but I'm going to ask it anyway. So an observer might say, well, aren't the cloud guys just going to do their own backup and recovery? Why wouldn't that supplant Veeam? And you sort of addressed it with the hybrid approach, but I want to hear your answer. I mean, all the cloud guys have some form of replication or snapshotting. I mean, granted, it's not as robust. You and I know that, but for the audience, explain to them why the cloud doesn't put you out of business. Yeah, in fact, cloud represents the biggest opportunity for the next five, seven years, right? So no, it's just historically the platform vendors, they don't provide the good tools, security tools or backup tools. We've been in this business over 25 years. Our first company was specializing in Windows Enterprise Management. So we developed lots of tools to around Microsoft platform for managing Active Directory Exchange Server, SharePoint, SQL Server. So, and we always were afraid maybe Microsoft will come up with the similar solutions, but they never did. The same is for today's world, right? So customers want to have the independence from the platform. And the vendor like AWS or Microsoft, they will never provide the capability to move the data outside of AWS, right? So for, but for the true compliance security and avoid the vendor lacking, you need the capability not just back up AWS to AWS, but you want to be able to back up AWS to on-prem and on-prem to AWS and AWS to Azure. So only Veeam can platform vendors, they are not looking to do that, right? So they want to move the data to the cloud. They're not necessarily providing more capabilities. Move the data outside of the cloud. And that's where Veeam comes in with the cloud mobility capabilities. Well, one of the things that our research has strongly pointed out is that there are few places within a technology set of capabilities that they must control. And data protection is one of them. So they have to have an approach for managing data protection. Within their business, that's their approach. And there are few companies in a position to actually provide that. Yeah, I absolutely agree. And some customers, they think that if I put the data into AWS or Azure or Office 365, it's Microsoft is going to protect it or AWS. No, it's your data. Microsoft protects the infrastructure. So it's uptime service, right? That's what Microsoft and AWS are responsible. The data is yours. You are responsible for protecting the data recovery. If you deleted email, it's not Microsoft's fault. Or if you need to do the e-discovery on your email system, that's not Microsoft's problem. If you're out of compliance, Microsoft executives aren't going to jail. Exactly, that's your responsibility. Your data, your responsibility. In fact, we have a white paper that talks about the shared responsibility model. So there is a shared responsibility. AWS public cloud providers, they're responsible to keep the service up and running. So for resilient infrastructure, not the data, the data is yours. That sits on top of that resilient infrastructure. Yeah, you've gone after Office 365 as the sort of starting point for SaaS. Maybe there's other opportunities down the road. Right now it's probably a small market but I think it could have emerged over time. But the overall, Tam, you showed $15 billion today. You have one 15th of it. Lot more competition today. You're seeing some of your competitors raised $250 million. You had to one up them with a $500 million raise. You told me years ago, Ratmir, we're probably not going to do an IPO. Give us the update there. Same stance on that? No, we're actually very open to the idea about IPO and we're exploring different opportunities. But we believe that we can continue growing organically because the company is very profitable. So we're reinvesting money into R&D and we have good foundation for the next act too. But speaking about Office 365, by the way, it's the fastest growing product in the history of Veeam. Really? Yeah, backup for Office 365 is the fastest growing because we have 350,000 customers. Most of them are using Office 365 and they need to protect that data. So and they love Veeam, they're buying. But also we're getting actually net new customers just buying Office 365. 23% of our customers for Office 365 are net new customers. Also a little bit surprising for us. So, O365 OneDrive is another opportunity that you guys have gone after. It's all part of the same product, yes. Salesforce, maybe not quite there yet, but you could potentially see that emerging as an opportunity. Do you see that? Yes, we are looking at Salesforce, we are looking at G Suite, we are looking at other SaaS applications that are popular among the business customers. But one point really quickly, Dave, is that one-fifteenth of that $15 billion TAM is just Veeam. Your ecosystem is increasingly going to use the Veeam services to expand the Veeam share of that, the virtual Veeam share of that, even as you grow. I think that's what's particularly interesting is how will that ecosystem add additional services on top of that to grab more of that overall share. Well, and I think that, and please comment on that, but I think that's unique to Veeam in the data protection space. You have your own event. You have premier partners that come in. Some of your competitors don't, they're not quite there yet. Some of the other larger competitors, it's a small little piece of their whole business. So the focus really is accentuated. Right, you know, with this. Yeah, Veeam has always had a channel partner-oriented strategy. From the day one, we were 100% channel, 100%. We don't take the deal directly. Also, we build the broad service provider system, network, right? So we have over 20,000, what we call Veeam cloud and service providers that provide the services to our customers based on Veeam platform. Backup in the cloud, disaster recovery, managed backup. Finally, today we're announced with Veeam. That's another new initiative that we're expanding our ecosystem through with Veeam APIs where we want our partners together with us to build this secondary storage systems that provide a single solution because some customers they want to buy in the form of the hardware appliance, our solution. So it's going to be pre-installed, seamless experience out of the box functionality, easy to deploy, easy to manage with a single interface all provided and with the single support line. So those systems will be created together with our partners, like we announced one with Nutanix as well as with Exegrid. We're working, Nutanix is one of the most innovative companies in our industry and we are very happy to partner with them because we believe that we will develop the right solution and we will be able to take these APIs and offer our other partners to build the secondary storage systems together with us. Well, we've seen this little company years ago called Veeam, what a great name. Superglue itself to the virtualization trend and really ride that wave now going on to Act 2 which is the cloud, Ratmet Temeshev. Thanks so much for coming to theCUBE, it was great to see you again. Thank you, Dave. All right, keep it right there, everybody. This is theCUBE, we're here at Veeam on 2019 in Miami, we'll be right back right after this short break.