 Live from San Francisco, California, it's theCUBE at VMworld 2014, brought to you by VMware, Cisco, EMC, HP, and Nutanix. Now here are your hosts, John Furrier and Dave Vellante. Okay, welcome back everyone. We are live in San Francisco for VMworld 2014. This is theCUBE. I'm John Furrier with Dave Vellante. Our next guest is Rod Matthews, GM of Storage at Barracuda Networks. One of the most successful startup stories in Silicon Valley, self-funded by the entrepreneurs, and then obviously follow on finance and then gone public. BJ Jenkins is now the CEO. Welcome to theCUBE. Great. Nice to be here. I have a little spot in my heart for Barracuda because being an entrepreneur, you know, you get a big round of funding and get all this gas and they build a rocket ship. Sometimes it blows up, but the founders of Barracuda really built this thing from scratch, self-funded it, built it up to be huge. Back in the firewall days. Yep. And now put posters all over the airports, became a brand name. Now state of the art in the enterprise and just great success story. But now storage is at the end of the equation because infrastructure is not just boxes now, it's the cloud, everything else. What's going on at Barracuda? Tell us what's happening. Yeah, so we're excited, experiencing some really great growth in our storage business. The Barracuda brand, the Barracuda business model, the large Barracuda customer base has all been a great catalyst for that business. We started off about six or seven years doing message archiving, essentially as our first entry into storage. And that really came out of our spam of ours firewall business. It was an adjacent use case that made a lot of sense. We were shortly thereafter, went into backup, moved into that space about five years ago. And then recently we've moved into the e-signing and online file sync and share space. So variety of products. So Barracuda's always had this ethos of making it simple, a lot of open source, making things like an appliance, like a toaster. What is the storage strategy? We heard from Paula, a long entrepreneur, people are doing things a little bit weird and different that are compelling with data. What are you guys doing different? How are you guys innovating? And the thing that makes us really different is the fact that we're a cloud connected company. Everything we do is connected to the cloud. And our storage products were actually built with the cloud in mind. So our backup product, for example, everything is configured from the cloud. Everything is replicated to the cloud. And the cloud storage is simply an extension of the local box. A lot of our competitors are actually trying to figure out how to take traditional local storage devices and get those connected to the cloud. We started with the cloud. So that gives our customers a lot of simplicity and allows us to do some very interesting things. Like, for example, our live boot technology. For example, the earthquake that just happened this last weekend in Napa. For those customers that may have been backing up with Barracuda, if they had a virtualized infrastructure that was backed up into our cloud with live boot, they can actually fire that right out of the cloud and get their business back up and running without any need to restore the data. Can they get the wine bottles back? I mean, that's what everyone wants to know, was the price of wine going to be increased now? That silver oak picture made me cry. I don't know if you saw that one. I did, yeah. I think pile of wine bottles on the ground. Don't you have to shake them every now and then? Yeah. Turn them a little. So Rod, I wonder if you could help me understand. So the markets that you're in are kind of diverse, right? The sort of the email piece, the web piece, the firewall and the storage. Do the pieces fit together or are you guys opportunists that sort of hit new markets as you see them come available? Yeah, the pieces do fit together. And the way we put them together is through this cloud managed model that I described earlier. All of our products run on a common platform. All of our products are managed through a common web interface. And really what we're doing is we're talking to IT constrained resource professionals that are in companies that typically have between 100 and 5,000 employees where they're not security experts. They're not backup experts. They're not storage experts. They're an IT guy who has to get a job done. And he's got the same problem that large companies have, but he doesn't have the budget and the specialized skills that the large organizations have. So you kind of looked at what the sort of mid-market generalist guys were doing and they do a lot of stuff. They're doing security. They're doing web. They're doing email. They're doing storage. And you said, okay, we can provide sets of services for those guys. Okay. And so talk about the storage piece of that. So that makes sense. That's sort of a good business model. But you were in the business of selling to guys who had storage specialists at EMC, at Data Domain. So how do you guys engage differently? Because those guys sell into those mid-market accounts. How do you, I mean, what do you do? Just leave them out of there? Or how does that whole thing work? Well, the main way we engage those customers differently is if you've ever been to an airport, you've seen a Barracuda ad. Sure. If you've ever listened to a radio program, you've probably heard a Barracuda ad. Sporting events. You see our logo a lot. So one of the things we try to do is create a preference for Barracuda as a brand. And then we really focus on how do we go and drive awareness of these various solutions that we offer to these end users. And essentially, if we get into a customer with, let's say, a mail archiving solution, once they're satisfied with that solution, it's very easy to go have a conversation about backup or about a firewall or about an email security system that's a very adjacent use case. Yeah, so it's kind of what else you got to help me kind of think. So you talked about brand. What do you guys want that brand to say? So what we want that brand to say is that people should trust us to help them solve their problems. It's a very trusted company. It's very focused on the mid-market. It's very focused on generalist IT folks who really need to solve those problems and that we will be there for you 24-7. One of the attributes of our business model is our support model, where when you call for support, you get a live person on the phone. We don't have any phone trees. So that problem gets solved immediately. I wonder if you could talk a little bit more about your business unit, sort of how it's made up, what's the team look like, and then I want to talk about how I engage. Yeah, so our team is actually very unique inside Barracuda. It's been formed through organic delivery as well as a couple of acquisitions. The core of our storage team is actually based in Ann Arbor, Michigan, right next to the Michigan campus. So we recruited a lot of people from that big western part, Dean Draco. He's a Michigan alum. Here we go, we'll fix this. Our former CEO was actually a Michigan alum. He actually is on the board of the directors for the engineering school at Michigan. And he has a lab out there, I believe, right? There's a little Barracuda lab out in Michigan. Yeah, so we've got a team of about 260 people in Michigan actually. It's not a shabby computer science program over there, either. It's a great program. Well, it's Michigan. It's also Eastern Michigan. It's Michigan Tech. It's Michigan State. There's a bunch of great schools right around there. But fundamentally, that team is focused on delivering our message archiver and our backup products. We actually just recently on Monday acquired a company called C2C Systems based in the UK to help us augment that archiving team. So I got to ask you. You've been around the block, EMC, data domain. So the data business has changed. New replication, disaster recovery, you mentioned the earthquake. What's changed now? How does cloud make it more compelling or less compelling? What is the drivers right now in the business? Yeah, the main drivers for us in the business is people are looking for ways to protect data and to get that data off-site. It's essentially the same tapes-off truck story that we've always heard in the marketplace. One of the challenges that we've had at companies prior that I've been at was that these smaller companies didn't have a second site. They didn't have an easy way to get that data off-site. And that's where the cloud becomes really important. So it's been a core tenant of our backup product and you're going to see some announcements from us over the next month that talk more about the cloud capabilities in our archiver product. All right, so let's talk about a typical use case. You got a mid-sized company. They may or may not have remote offices. Pick whatever scenario you choose. What do they have? Do they have sort of existing infrastructure, legacy infrastructure, purpose-built backup appliances, nothing? You know, tapes? Talk about that and talk about how you guys sort of bring them on. Yeah, so where that usually goes and I'll use the Round Rock Express as an example. They play on Austin. Texas are a minor league baseball team. Before we came along and they purchased our backup solution, they were using a hodgepodge of things. They had some backup software from one company. They had storage from another company. They had management tools from a different company. They were trying to figure out how to get the cloud working and it just wasn't all gelling for them. So when we showed up with a kind of purpose-built solution that really solved that problem, it removed a bunch of headaches from them. It was a single vendor solution. Cloud was integrated, really solved that problem. Okay, so they got a bunch of data. Those guys probably have it mostly in one place, I would imagine, right? And then, so how's it work? You sign up for your service and, well, I swipe a credit card or I sign an ELA or... Yeah, we have a vast majority of our customers do very short transactions. Large percentage of our transactions closed in seven days or less. So these are customers who come to us with a very strong preference for Barracuda. The other thing we can do very quickly is we have a 30-day, no-risk trial of our products. So if you come to us on a Monday and say, I'd like to try your backup product, we can have a box to you on Tuesday. So we get that in very quickly. We get that system configured. We get them up and running. It helps remove the need for a proof of concept and install an appliance, which is essentially my on-ramp to your cloud, right? And it has probably some other local services as well. And then I got to seed the cloud. That's the big knot hole that I have to get through, right? And that's just going to depend on how much data I have and how much activity I have, right? Yeah, and what happens there is you install the system. You activate the system with our cloud. So you tell it, hey, I've got the system. We can then go turn on all the entitlements and do all the things that need to happen. And then through our deduplication technologies that are built into that box, we'll get that data up to the cloud as efficiently as possible. Rod, I got to ask you about the next big wave. Pat Kelsinger was quoted on The Cube years ago saying, if you're not out in front of the next big wave of innovation, you become driftwood. So Barracuda's got an innovative culture. What are you guys doing to get inside of that next wave? What is that next wave? And how are you guys going to be out in front of it so you don't become driftwood? Yeah, well, I think Pat had done it this morning in his keynote where he talked about the tyranny of the end and the power of the oar. Or the tyranny of the oar and the power of the end. Essentially what we're doing is we're giving customers choice and we're saying, hey, if you want to use a local appliance, great, we can do that. If you want to replicate from site to site, great, we can do that. If you want to use the cloud, great, we can do that. And so we're looking at these hybrid solutions that really allow customers to deploy the way they want to deploy. So I think he's right on with that. It's all about end. How do I do this and this? So I think that's the way most IT customers want to do it. So then you got this big whale in the room in Amazon that says, no, no, do it our way. And you listen to Andy Jassy talking, you listen to Pat Gelsinger talking, it's like they live in two different worlds. Are they both right or are they both wrong? Well, I think customers are going to choose different ways to go deploy that technology. Some of them are going to choose the Amazon style way, some of them will choose the VMware style way. There's a whole bunch of different choices for what people will do there. Our approach to that is to give people as many different choices as possible for how to deploy our technology. One of the things that recently happened, for example, at the Microsoft World Web Partner Conference is they were demonstrating the new Azure web application store. And they were showing how to demonstrate or how to deploy a web-enabled virtual machine in an Azure environment. The thing that they used to demonstrate that was a Barracuda web application firewall. And so we were one of the first companies into that space with our security products to help protect that virtual environment. You guys have a security heritage out to the firewall going back to the original product. You mentioned Dean and the co-founders, Zach and those guys. Well, how does that play now into the cloud? Because it's really a tough thing. Pat mentioned security. You know, Steve Herd was saying on Friday, it's not about perimeter-based security. It's a whole new paradigm. Can you share your thoughts there? Yeah, it's really about how do we protect data where customers choose to deploy it. And I think the hybrid environment where some things are local, some things are hybrid, one of the things that I do in a lot of my day-to-day job is talk to early-stage companies that are maybe looking to be acquired or maybe looking for investment. And more and more what I see with those companies is there is no local infrastructure. When we acquired Sign Now about a year ago, part of our standard diligence process is tell me about your local infrastructure. And their answer was we don't have any. They were using all cloud services. And so when you look at that kind of environment, the way you can archive cloud to cloud, the way you need to back up data cloud to cloud, really changes. And that's really where we're focused for the next wave of innovation. So I was getting some text there and some stuff on Twitter. I got to ask you from the crowd on the crowd chat. Go to crowdchat.net slash VMworld. Be part of the conversation on the hashtag VMworld. We've got a whole dedicated crowd chat. It says, ask Rod how they harness the data protection paradigm and other solutions with third-party non-baricuda outside of the storage itself like what data gravity is doing. Do you guys have that kind of solution? So our solution is fundamentally we'll back up whatever infrastructure you have. So we'll use agents to deploy for things like Microsoft Exchange, Microsoft SQL Server. We use operating system level integration to deploy those. Like I mentioned, we'll plug into the cloud environments that people are using. So our approach is to plug into whatever is commonly used in those mid-market environments. But you have no interoperability issues. No. Okay, cool. What's the coolest thing you've seen at VMworld? And we'll get you that and give you a chance to answer that in the last course. What's the coolest thing you've seen so far? And what do you think will be the biggest splash of this show? What's the core theme that's going to come out of this? Yeah, well, I've actually been here for about two hours and actually haven't gotten to go into the show floor yet. So I would have to say that the Baricuda booth, which is slot number 2011, is probably the coolest thing you're going to see. Sorry for the commercial, but I haven't been in there yet. That's a good Baricuda club. But let's ask more of an industry question. What do you think is going to come out of VMworld? If you had to throw the prediction out there, what's the core theme that's going to be the front page of the Wall Street Journal and the front page of the trade magazines? Yeah, I think VMware expanding their footprint to include other types of infrastructure. I was really interested this morning in some of the things like Docker that they're talking about from a containerization perspective where it doesn't have to be a VMware virtual image. It could also be a container using different technologies. So I think that kind of ongoing, you know, more heterogeneous approach that VMware's taking makes a lot of sense. And I wouldn't expect anything less from Pat Gelsinger knowing kind of how he operates from my days at EMC. He's very much about enabling the ecosystem and enabling the platform. Rod, thanks for coming to you, Rod Mathers. GM of Baricuda Storage Group here in VMworld Live. Pat Gelsinger will be on at 4-3 and ask him those questions. Always great to have Pat as well as a lot of other great entrepreneurs, experts and executives. Here live in San Francisco, this is the queue for three days, wall-to-wall coverage. We'll be right back.