 Live, from New Orleans, it's theCUBE. Covering VeeamON 2017, brought to you by Veeam. We're back at VeeamON, Dave Vellante with Stu Miniman. Mark Crespi is here, he's the vice president of SEs at Exigrid Systems, big partner of Veeam's, big presence on the show floor here. Mark, thanks for coming on theCUBE. Thanks for having me. So what's doing with Exigrid? We were talking off camera, I kind of know you guys a little bit. You guys are right around the corner from us, in Massachusetts. But give us the update on the company and what's new. Yeah, be happy to. So first I'd like to thank Veeam for putting on a terrific show. And it's great to be in the beautiful city of New Orleans with you guys. So if you look at the Exigrid business, Exigrid is a leader in the dis-based backup with data deduplication business. And we've been a Veeam partner for a decade now. And right from the early days when we started talking and working with Veeam, we realized that our two architectures had a natural fit. So when we talked to joint Veeam customers, whether they're new customers or existing customers, they're experiencing an exponential benefit over just using Veeam with some other disc player as a result. If you look at how our business has evolved over the last decade or so, we were originally in the tape replacement business. The dinosaur tape libraries that were still roaming the earth back then. And what we find now is a lot of customers have moved on from tape. Tape is a minority of the backup storage media that we see in the market today. And most of our business in fact is replacing other disc-based implementations either with or without native data deduplications. About 80% of our business now. And it's all the names you hear in the dis-based backup data deduplication market that we're replacing. We've also grown from a company that initially focused on mid-size enterprise to now an enterprise class, both product and company. So if you look at our average sale, our average customer size, it has grown exponentially over the past several years. And our sales force has grown over 500% just in the last two to three years itself. So we're in a high growth mode. We're experiencing a lot of success. And much of our business, a significant portion of our business is working with either existing or new vm customers. And a lot of the growth is coming from replacing existing, what's generally referred to as purpose-built backup appliances, is that correct? That is correct. And the reason that we're seeing that phenomenon is when we sat down and created our architecture, we looked at the legacy of tape and what was wrong with tape. Well, tape wasn't very mechanical, it was unreliable, but it also suffered from a vicious cycle of grow, break, replace. So all customer data is growing 20, 30% a year, which means your data's doubling every two and a half to three years. And whatever you're backing up to, you're going to outgrow it. And you're going to ultimately have to replace it in its entirety. And you've got those precious IT budget dollars that you'd like to spend on other initiatives. And you're rebuying your backup storage just to tread water before you even get around to spending on the expansion. So we said that problem needs to be eliminated entirely. And the only way you can eliminate that problem is by having a highly scalable architecture that never requires a forklift upgrade. So if you look at our technology and why we're able to replace incumbent vendors, we're typically finding a frustrated customer who's been through two or three forced refreshes, either because they outgrew the technology or the vendor forced them to outgrow the technology by end-of-lifing, et cetera, which we don't do. We don't end-of-life any of our products. And therefore, they lift their head to say, well, before I just spend all these dollars, again, plus expansion, why don't I go back into the market and see if anyone's figured out a better way to do this. And that's where we come in. We come in and show them that you can start with the footprint you need and then you can expand infinitely and we're never going to force you to buy what you already own. So it marries up much more closely with the lifespan customers want for backup storage than the lifespan vendors want for backup storage. Mark, can you unpack that a little bit for us? I think about, like, VMware was an example of how we avoided having to do certain upgrades. I think of operating systems or servers that were in the life, I stick it into VM, I could grow and expand. But when I think about gear, there's all sorts of reasons why just the exponential growth of different, you know, different media types, different sizes that we need to take that. How come you can do this while others, you know, force those upgrades? That's a great question. Compare and contrast a little bit with virtualization. What virtualization brought to the table was it allowed you to take a set of computing resources and make sure it was fully utilized, right? So if you had a server, you were running one application on it, maybe it was only 30% utilized, you had spare storage, you had spare compute. So what virtualization allowed you to do was add applications that were segmented and therefore they could run without conflict and you could get that hardware fully utilized. This is a little bit different in that if you think about what backup really is, on a nightly or weekly basis, even with some of the modern backup techniques that have come out, customers are moving large amounts of data and it has to be within a certain window of time because they don't want backups running during production hours because that can impact network performance, server performance, et cetera. The other side of it, the equation is when they want something back, they want it back fast. So in order to achieve that, we made two architectural differences. On the scalability side, we said that the legacy storage architectures that typically utilize a fixed amount of compute and then expand by simply adding storage miss the point that when you add workload to a system but you don't add power to that system, performance at the same time, everything that system does is going to take longer. So if I have a certain amount of data and I have a certain amount of compute and then I double my data but I don't double my compute, my memory, my networking, naturally everything that system's doing is going to take twice as long. So we recognize that you needed a grid-based architecture, cluster-based architecture that said when my data doubles, I'll double the storage but I'm also going to double the compute, the network, the memory, et cetera, at the same time. So if I have a very short backup window day one with an excellent implementation and my data doubles, I have that very same backup window. I have that very same recovery time. I have the very same replication time. All of the things that a dispatch backup appliance do grow linearly with Exegrid. And you're saying other architectures had to wait for Intel? That's a great point, yes. They rely very much on the compute now there's implementations where flash is being added to try to speed up processes, et cetera, which sounds like a great idea because flash is obviously a very useful technology in the storage industry. But when you look at the pricing of backup infrastructure, flash breaks the model for that, for backup infrastructure. It makes the products more expensive and it's unnecessary if you implement things correct. Because fat disk is still cheaper than cheap flash. Spinning disk is still about a sixth to an eighth the cost of flash. Now, I wonder if we could go back. I want to pick your technical brain for a minute. So you mentioned tape replacement. And then the, as I recall, the ascendancy of, what again, we can call them purpose built backup appliances. I think it's an IDC term or whatever, but we'll use that. A big part of the value proposition was plugging directly, looking like tape. So you didn't have to rip and replace your processes. And I remember Avamar was trying to convince the market that no, you have to change your process. Conceptually, that sounds good, but it's too disruptive for me. So where are you guys on that curve? You look like tape, easy to pop in, or is it? Proud to say we look nothing like tape. Okay, so that was a headwind for you early on, right? But it's really benefited you down the road. Is that fair to say? It was, if it was a headwind, it was a breeze. Yeah, okay. And what I mean by that is, so the technology referring to was VTL Virtual Tape Library. And in the very early days of the market, there were some legacy environments, typically fiber sand type environments, where you had to make your disc look like tape so that the customer could transition. Especially larger customers where change is harder, radical change is harder to make quickly. So VTL provided sort of a bridge or transition technology over a period of time. We're through that phase of the market. But it was a band-aid. It was very much a band-aid. But you say it was a breeze, but data domain got two-thirds of the market. So I mean they... Yeah, but it wasn't because of their VTL. It wasn't, okay. No, that was a result of, there were still some fiber environments out there and they decided to cover that part of the market. We looked at the percentage of the market that we thought would need that, both in the early days, but even more forward-looking. Everything about our architecture is quite a bit more forward-looking than the people we're competing against. And we realized that the investment would take to do that would eventually be wasted because it would go away. And here's why. If you look at what Veen Software does with instant VM recovery and synthetic foals and sure backup and virtual lab, et cetera, when you make a disk look like tape, you lock yourself into the Fred Flintstone era of backup. In other words, you can't take advantage of any of the advanced features in that software because tape couldn't support those features. And as far as the software knows, it thinks it's talking about tape library. So it's doing silly things like saying fast forward, rewind, eject with disk. If you think about it, you could almost do a stand-up set. Hey, you're sequential. You know, picking on this, right? So what we said is that's going to go away. It's very clear with what the software folks are doing, especially Veen, that that's going to go away. Now I realize Veen recently added tape capability. But the reason for that is not because it's a primary backup media, it's because for customers that have infinite retention or seven, eight, 10-year retention. They need an off-site tape option. They need an economic option. It's not that they like it, because we actually have a lot of conversations with customers, even with that longer-term retention, where they at least want to explore the economics of disk. But in some instances, even though they hate it and they grin and bear it, they go with tape just purely economically. Right, so early days was, hey, don't change anything about your software. Keep the Fred Flintstone software and all your processes associated with that. And then, of course, VMware changed everything. Right, and then graduate to the modern. Okay, and then the other big sort of internecine argue, these argue about dedupe rates, and I presume it's the workload and the nature of the data that determines that, not necessarily the technology, but maybe not, maybe there's some new ones there. It's a little bit of both. So a responsible deduplication vendor is going to ask the customer a number of questions about the makeup and the nature of their data, okay? However, there's also a lot of aspects to which algorithm you use that are going to drive that. So if you don't implement a very strong, aggressive deduplication algorithm, your result is going to be lower. And we find in many of the software-based implementations and some of the appliance vendors that they took shortcuts on the algorithms itself, either because they were compute bound or you might be running it on a standard Windows server, which is not optimized to run a really strong algorithm. And therefore, where we may say at 12 weeks of retention, you're at about 20 to one, they're getting six or seven to one. And in some cases, we're recommending you just put straight disk behind the software. Well, you end up with disk sprawl because you're keeping all of this retention but you're not reducing the data enough. So you've got disk everywhere. Okay, so the quality of the data reduction algorithms just keep matter. Okay, and then the other arguments used to be inline or post-process. Frank Slutman used to do that crappy post-process. I remember when he said that. Yeah, and so weigh in on that. So we kind of agree. Not that inline is better but that parallelization is better. So we actually invented a third way called adaptive deduplication, which basically what that does is it allows the chunks of the data to land into our box first and then we begin deduplicating and replicating in parallel. So we're doing it at the same time but we're not doing it inline. And we monitor utilization of the system and we favor the backup Windows. So if we think our deduplication is gonna slow the backup window down, we throttle back a bit. If we have plenty of resources, we crank away at the deduplication replication. So we eliminated the potential drawbacks of post-process. We eliminated the potential drawbacks of inline. And the biggest drawback of inline is that when you go to recover a system and you think about Veeam's instant VM recovery, if you boot a virtual machine, we have that virtual machine in its entirety in a high-speed cache. So it's up in seconds. I was talking to a customer of ours at our booth who recovered an exchange server recently by booting it off of an X-agrant in about five minutes. If you try to do that out of a device that only has inline deduplicated data, you're looking at hours to maybe even a day. Now, your CEO's not gonna be too happy when they can't do email for a day. So I would recommend a high-speed cache. Mark, X-Agrid's been a partner with Veeam for a lot of this journey that Veeam's been on for the last 10 years. That's right. Here at the show, they've been talking about where the next 10 years are going, everything cloud and expanding what they're doing. As you look forward, any announcements this week or as you look forward as a partnership, where do you see things growing? We don't have any specific announcements this week. I would refer folks to our website. We just recently announced our 5.0 release. It includes some pretty important things. One of the things that includes is integration with Veeam's scale-out backup repository, which dramatically simplifies the use of multiple Veeam repositories with Veeam software. We also announced an offering for AWS. We think that's appropriate for some customers, not all necessarily, where we can put a virtual appliance in Amazon. And in the cloud realm, there's no question that customers are going to continue to explore the cloud model for both efficiency, operational expense versus capital expense, but there's going to be multiple cloud models. So for example, we partner with a company who's here who you may have spoken to recently, Offsite Datasync. So if the customer doesn't want to do Amazon for some reason, then Offsite Datasync will offer them the very same service with Exegrid Technology and an operational expense model. And they've been a very good partner of ours as well. The virtual appliance in AWS, how does that work? Can we pop it in a Colo facility? No, literally you load it into Amazon like you would any other Amazon machine instance and it behaves just like a second data center. So you replicate to it and it can store all of your Offsite data. And then when you need it back, you can recover it, provide it, band with it as well. So I access the instance from the AWS Marketplace? No, we actually provide it directly. Oh, okay. Yep. Okay, good. Through reseller network. Yeah, yeah, yeah. Okay, so I appreciate you, by the way, taking me down kind of memory lane and sort of educating us on- Love talking about this stuff. And so now, so a lot of things we talked about are old news, but it was sort of to set the context. So where are we today? What is the state of the market and the competitive differentiators that customers really care about? I think we're at the state of the market where people are frustrated with a lot of the legacy approaches, whether it's on the backup software side or the backup storage side. The licensing models are expensive, the vendors are gouging them because they're trying to keep revenue. And they're worried about the players that are becoming the replacement players, like Veeam and like Exegrid. So we're at a point now where I see more activity of customers looking for alternatives to what they're running today than maybe in history of backup. You know, people always used to say backup apps are very sticky, they're very hard to replace. Well, look at what Veeam's been able to accomplish. Backup storage is very hard to replace once it's installed. Well, if you force a customer every three years to re-spend the money they already spent, plus more, you create an event where that customer's getting frustrated and they're going to go out and look at alternatives. So I think we're at a point now where more so than ever, customers are looking for alternatives that stop the madness of backup spending and stop the madness of backup performance degradation. We had Dave Russell on yesterday and in his last Magic Quadrant, you probably read it, he said, I think one of his strategic planning assumptions was 50% of the customers out there are going to replace or sunset their existing backup architecture within the next two years. I mean, that's a massive number. And obviously a huge opportunity for you and for Veeam. I'm honored to be talking to Dave later today. Well, Mark, listen, thanks very much for coming on theCUBE. It was really a pleasure. It's been fun. Thank you. All right, keep it right there, everybody. We'll be back with our next guest after this short break.