 Live from New Orleans, it's theCUBE. Covering Veeam On 2017, brought to you by Veeam. Welcome back to New Orleans, everybody. I'm Dave Vellante with Stu Miniman, and this is theCUBE. theCUBE is the leader in live tech coverage, and we're here covering Veeam On 2017. This is day two for us. Paul Mattis is here, he's the vice president of the global cloud group at Veeam. Paul, good to see you. Hey, great to be here, guys. Thanks for having me in. Welcome, hosting the conference this morning. It's Roan Peter McKay under the bus a little bit. That was kind of funny. He's going to get you in a headlock later, no doubt. But you know, it's funny, it's great. Veeam On is an experience for people. It's not just about the hardcore learning, which is a lot of that going on, but it's about having fun. And a lot of people here are having fun, and you guys embrace that, it's great. Yeah, I mean, it's part of our culture, right? I think that's why it's a great company. It's one of the reasons why I came here, and listen, if you can't have fun doing something you love, there's something wrong. So yeah, we're going to keep that up. A lot of sports analogies going on too, which we love in theCUBE, sports angles. And so you guys seem like you're pretty competitive. You're not afraid to put it out there. So give us the lay of the land. What's happening in the marketplace? So on the cloud specifically, this is an area of major growth for us at Veeam. I think it's certainly a competitive landscape. No question about that. But I think we have some advantages given our lineage and where we've evolved from, from an on-prem organization into the cloud. The cloud market's moving very rapidly. You heard me talk about that this morning a little bit about the pace of cloud adoption. I think it's happening much more quickly than we've ever seen. And I haven't talked to anyone here and had dozens and dozens of conversations who haven't talked about having some kind of cloud strategy or trying to figure out how that impacts their go-forward planning in IT. You gave some IDC stats. I wanted to ask you about that. 46%, I think by 2019 are going to be doing cloud. And I presume that meant both on-prem cloud. So cloud being an operating model, not necessarily a destination. That's right, yeah. Talk about that a little bit. What does that mean? So yeah, so if you're Danny and I talk about this all the time is that I'm not, I've been doing the cloud since, you know, 2010 when I was with Azure at Microsoft and everybody talks about moving to the cloud as if that's it. You know, once you're there, it's over with. The reality is you need to think of the cloud as a way to deliver business results and deliver business solutions. So just getting to the cloud doesn't mean you're over. Doesn't mean you don't have to think about things like availability and data protection and backup and disaster recovery. So the journey to the cloud is, I think it's sort of a, it's a step, right? And then once you're there, there's a whole lot more that you have to do once you're there. Paul, one of the things I've been saying for a couple of years is when it comes to cloud, follow the applications and follow the data. You know, you said you worked on Azure. I mean, no doubt that, you know, Azure has lots of applications, you know, business productivity. I think Marcus Zinovic did a great job this morning laying that out. Virtualization was kind of a tool that, you know, applications sat on top. What's that maturation that you see of customers as to how they think about their data and their applications and where things live? Yeah, no, it's a great question. I think they're getting much smarter about how they separate and divide those things intelligently. Especially when you think about things like, you know, Mark talked this morning about StretchDB moving into Azure. And so customers are having to rethink all of that because the cloud really does change how you have to think about application, architecture, application deployment, especially as you do, you know, a division of data application and sort of the entire architecture end to end. So I think we're still early days, quite frankly. I think for as much as cloud is in the buzz and we love where we're evolving to as a cloud organization, the market in general is still early days and there's a lot of work left to do there. Paul, what visibility do you give customers and how do you help when it comes to the cost of all of this? There's so much, you know, it's often times fun in the marketplace as to, oh well, you know, public cloud super expensive, no wait, owning it yourself is always expensive. You should always try and purchase it by, you know, how do you inject yourself into that conversation? Great question and this is, you know, this is something that has been come up since day one and the assumption is you've got commodity hardware, you've got scale, so you've got decreasing cost. The reality is it's workload, it's entirely workload dependent, right? There are some applications, there are some workloads that you want to put into the cloud. Absolutely, you experience amazing economics. We talked today about the scale out backup repository model taking advantage of Blob Story, perfect example. One of the things customers need to think about is in addition to those things is ingress and egress costs, it's not just the cost of storage in the cloud, you have things that surround that in order to make it workable and make it really, really valuable. So one of the things we are doing now with customers is we're starting to work through and develop models to help them think through that. In various stages of network cost, storage cost and being able to give them some tools that really help them make those decisions, it's not an easy task by any means because at the senior level executives seem to say, well everybody's saving money in the cloud, why aren't we there, why aren't we experiencing that? When you get into the details, it's a little more complicated. But at the end of the day, the right workload in the right cloud infrastructure, absolutely economic advantages and more importantly, business advantages. Doesn't the savings or business impact really come from what we were talking about earlier, the operating model? Alan Nance, who was the former CIO of Phillips, who's in the Cube, and he said, if you don't change your operating model, you're going to just barely scratch the surface of benefits, scratch the surface of benefits. And so I wonder if we could explore that a little bit, is that what you're seeing in the marketplace, the people that lift and shift, maybe there's an advantage that you're shifting CapEx to OpEx, but it's really not moving. No, I totally agree, that's not, and it's always frustrated me a little bit that the economic end of it really seems to dominate a lot of the conversation based on perception. The reality is, yes, this is about changing the operating model and changing the ability of the organization to map to customer demand and map to market demand. The cloud does provide that, and you can't just lift and shift. Yeah, that's okay for some things, but you really have to rethink, okay, if I have this agility and the ability to deliver solutions in a cloud, what does that really mean? How do I really have to think through that from end to end? Not just, okay, going back to our earlier question, I'm going to put that in the cloud and we're done, you know? Absolutely, you have to rethink everything when you're moving to the cloud from an application's perspective. And then from Veeam's perspective, when you think about cloud, obviously you've featured Azure up there today, you guys have talked about affinity with AWS, but there's a lot of cloud providers, so yeah. 18,000 of them for us. And some of those may be managed hosting, but the business model is similar to cloud, so what are you seeing in terms of the, market's highly fragmented today, it's very localized. Do you, in your view, will it stay that way? Will you see substantial consolidation or will it be more like the services markets typically are, which is very local, very fragmented, zillions of companies? I think and we think that there will continue to be a consolidation in this part of the market. There's been an explosion of providers and what happens is how do you differentiate if you're a provider in that market, right? What is your secret sauce? What makes you more attractive than another provider? And so we've already seen consolidation globally for organizations, so what'll happen, what we think will happen is, yes, there will be some that are very niche, very specialized, they continue to have great success, but we will see organizations coming together increasingly what we're seeing is providers wrapping new value-added services around their offering, right? This is how they differentiate. We're also seeing service providers that are starting to verticalize, so specializing in a particular healthcare or financial services market as a way to provide value and differentiation for themselves. It's not going to just, and this is why one of the things that we've done in Veeam is, yes, we will continue to grow the provider base, but really focusing on ones that differentiate and add value to customers and can partner really, really well with Veeam. Veeam kind of grew up right at the time that not only was VMware exploding on the market, but there was a new virtualization administrator that didn't exist before, and Veeam helped solve a really salient pain point that they had. Can you talk to us about when it comes to cloud, who are you selling to? Community's very different in a very fragmented cloud world than that kind of big VMware community that we all know. So it's interesting because we're clearly in an evolution at Veeam. Veeam's legacy, very squarely focused in IT, and the IT pro community, that won't change. That will not change. But as you heard from all of our messaging here over the past couple of days, what we really want to continue to evolve to is understanding from a business perspective what is the business value of driving agility or driving agility and availability. And so that is now a conversation at a different level. You're talking a CIO level, you're talking COO level, and that's an evolution. It's an easy conversation to have when you're talking about a bits and bytes perspective of how do the bits move and what are these features functions. But you'll see us continually now relate this to what are the business outcomes, what are the business risks, why do you need to have an availability strategy, and why is Veeam the choice for that? So your positioning as an availability specialist, no question about that. I want to start by talking a little bit about the market for that. So there's multi-cloud, there's hybrid cloud that you've talked about this, sometimes we call it inter-clouding, but you are positioning, the strategy is positioning in the middle of all that as the availability, the best at availability always on. So first of all, how big is that market? Can you talk a little bit about the TAM, however you look at it, maybe not hardcore numbers, but if you have them, we'd love it. But how do you look at that? Well, I think Peter presented some data in his keynote on Tuesday, and we see the total addressable market is in the $69 billion range, which is pretty massive. If we can capture just a fraction of that, we're going to easily blow through our goals, our stated goals of getting to a billion and billion five in the next couple of years. So that's why we're going to, we will continue to focus across the spectrum of those platforms, right? You heard us talk about, that's the core, we grew up in virtualization, now physical, network attack storage, and we won't lose that. But now, understanding how all the different cloud assets and cloud platforms intersect that, that whole market is massive and will continue to grow. It's interesting, I was talking the other night with an analyst about cloud predictions, and we said, we'd love to go back and look at the last four or five years of predictions from analysts and see, where did they land, where did they really end up? And I went back and I, this is not an in-depth, robust survey, but going back a few years, looking at all the estimates of cloud market growth, they were all wrong, and they were all wrong on the low side, right? And it's hard sometimes to get analysts to not over-hype things, right? But everyone that I looked at, it was more, the reality turned out to be greater than what the prediction was. It's the definition of a disruptive technology that's usually horrible if you're asking it, right? Yeah, exactly, exactly. Which is a good thing, but... So in that sort of center of the cloud, if we can call it that, explain to people why Veeam, and not, hey, a higher level of abstraction, like VMware, for example, them trying to be sort of, even though they're not availability specialists, but they're pretty good at availability, and people are concerned about managers of managers. Why does Veeam win in that scenario? I think Veeam wins in that scenario given the breadth of our capability, given the breadth of what we do, I think number one, given the breadth of our ecosystem, number two, we don't have all the answers, but we have an amazing partner ecosystem that does. And number three, I would say the simplicity, right? This mantra that we have at Veeam of It Just Works, that's very, very valuable. I heard, just wandering around here, unsolicited, people don't know who I am, even when I'm walking with my badge off, and I've heard multiple times, they're not kidding when they say that it just works thing. That's something that we will never, ever get away from, and that's a clear differentiator for us. We were talking, we did a breakout session the other day, Danny and I, and we were with a number of service providers, and they asked, we had these canonical examples of what we're doing, and they asked a few questions of why can't we do this? And Danny and I would look back and say, well, you can do that, but it's not to the point where we have it yet, where we say it just works. There's a way to string it together, there's a way Veeam can solve that problem, but we need to continue to improve engineering in order to get it to the point where it just works, to make it that simple, elegant, and that's a huge differentiator. So the premise there is it's not a zero sum game, certainly between you and VMware, because of the simplicity and the integration that you do with VMware. Very interesting dynamic going on in the marketplace. It's early days, but you guys are, I love the positioning, it's clean, and it's focused. Yeah, no, thanks. I'm glad because we love the feedback, it's something we work really, really hard at. Veeam is in a great period of transition, bringing Peter on, the leadership team that Peter's brought in. That's really, really important that we're able to communicate where we're going and how we position, because we are so passionate about it. You just, you want to make sure that the words come out well and that the messaging is proper and that our strategy is locked on. All right, you give you the last word on Veeam, Veeam on 2017. Bumper sticker is the trucks are pulling away. I mean, I think it's an amazing event. It's my first Veeam on. I have been blown away by the energy and the information that we've shared. I think we have a lot of exciting things that are coming down the pike and we just can't be thankful enough for the great participation and look forward to the future. All right, Paul Mattis, thanks for coming on theCUBE. Hey, thanks guys. All right, you're welcome. Keep right there, everybody. Stu and I will be back with our next guest at theCUBE. We're live from Veeam on 2017 from New Orleans. Right back.