 From Las Vegas, it's theCUBE. Covering IBM Think 2018, brought to you by IBM. Welcome back to theCUBE. We are live on day one of the inaugural IBM Think 2018 event in Las Vegas at the Mandalay Bay. I'm Lisa Martin with Dave Vellante. Welcoming back to theCUBE, a multiple-time CUBE alumni, Matt Kelmanson, the Vice President of Sales for Cloud and Service Providers at Vee. Hey, Matt. Hello, Lisa. Nice to see you again. Nice to see you. It's been a while, man. I appreciate you having me back. Absolutely. We're in the middle of a Veeam sandwich. We just had to rip that over on about 20 minutes ago. That's a tough act to follow. No, no, please. That's true. That's true. So, IBM Veeam, what's going on there from a cloud perspective? Any news you want to share? There is so much going on there that I probably wouldn't know where to start. And I'll tell you, we started the relationship with IBM and Veeam from a cloud perspective about a year, a year and a half ago. And then last year we announced Veeam availability on the IBM cloud. And really, if you think about moving your virtual workloads to the cloud, Veeam in conjunction with IBM, and specifically we started out on the Veeamware Cloud Foundation, which is called DCF, given organizations the ability to move their virtual workloads from on-premise to into the cloud. And really, we extended that by saying, hey, on this journey to the cloud, let Veeam be the tool and the product that helps you along that journey and streamline the operations to move to the cloud. Now, that's where we started. But I'll tell you, over the last couple of months we have a lot of exciting things happen. Here at the show, we're going to announce that we are also available for physical workloads. So when you think about Veeam historically, people think about our virtual environments, right? But the reality is we've had major success with servers and workstations and the availability of servers and workstations. And we're now making that available on the IBM platform as well. And we're also working with the business resiliency team within IBM. So you can now purchase Veeam, it's an offer, that the resiliency team is bringing to market that allows you to have a full backup and managed service from the IBM GTS team where the business resiliency team resides. So lots of really exciting things happening. So let's start with the cloud piece. Why Veeam and IBM cloud, what are the synergies there? What's so special about Veeam and why is the fit so good? Yeah, that's a really good question. And there's so many options out there. And Lisa and I were talking before, we were kind of prepping for the discussion here today and we were talking about the journey in the enterprise. And the journey still has a long way to go. Now you'll hear different stats, but most of the stats reside around 15%. 15% of enterprises have started along this cloud journey in any kind of meaningful way. So what does that mean? While we see all kind of statistics and while we see all kind of numbers and information about who's leading the battle and who's already won, it's far from over. Now, being in that position, we think we have a really unique value proposition combining Veeam with IBM. Number one, when you purchase Veeam on the IBM cloud, you get access to the entire Veeam portfolio, okay? Now when you take that portfolio and you make it available on the IBM cloud, IBM cloud is across some 50, some odd different data centers, right? And across those different data centers, there's no charge for the bandwidth. So moving data from one data center to another data center is really a unique value proposition. So on the one hand, you take this organization that's had wild success in the data availability marketplace and you give the access to IBM customers to the whole portfolio and they have something in that portfolio that really differentiates them and that they don't charge for bandwidth. That means your economy's a scaler grater. You've eliminated some of the economic barriers right out of the gate when you compare it to other cloud platforms that are out there. It gives you a lot of flexibility to move workloads and you talk about backup and you talk about disaster recovery which are all encompassed within the business continuity or data availability story. Moving workloads around is paramount. So you take that combination of not having these extra charges, of having these unique value propositions from both organizations and I believe it's just a phenomenal opportunity that we continue to build upon. Yeah, I mean bandwidth charges can be some of the most expensive on the cloud bill. Why is that mad? Is it because IBM owns its own infrastructure there and so it's a sunk cost and passes that on to benefit onto its customers? It really is one of the key differentiators. Some of IBM's cloud competitors who I won't mention, that's how they make their business. That's how they make their living. So this is a literal sunk cost into the business that offers tremendous economic advantages to an IBM cloud over other clouds. And talk about the data movement. I mean a lot of people would say well I don't want to move my data because I don't want to pay the bandwidth cost by that as well. There's just moving a lot of data through a little pipe takes a long time. So what are the use cases where you see people moving data? I mean obviously offsite data protection but what else? Yeah, so there's so many use cases, right? And when you think about Veeam in particular, you could be talking about having Veeam as a part of a complete infrastructure as a service, right? So you can come to the IBM cloud and purchase Veeam and have it as a part of the infrastructure as a service with your compute platform, your virtualized machines, your storage and obviously your backup and data availability needs will be protected. We can also work with customers that are just looking for backup as a service. So like we said, a lot of organizations have not made the journey to the cloud yet and they're just making this evolutionary journey, right? It's not something that happens overnight. So they may still have traditional on-prem uses of Veeam. But what do they want to do? They still need to move copies of their backup jobs offsite. They need to move them to another location and that goes back to what's called the 321 world rule. The 321 rule is having three copies of your data on two different media with one of them being offsite. So we give the ability just to use your on-prem as part of a hybrid cloud solution and moving just copies of your backup jobs offsite too. In addition, we could talk about replication needs, right? We have something called Veeam Cloud Connect Backup which I just talked about, follows the 321 rule but you can also replicate data from on-site to one of these cloud provider cloud locations that we've discussed earlier. So there's lots of different use cases. With respect to IBM, what is the go-to-market strategy like for Veeam to go-to-market with IBM and also some of the things that you're announcing this week? What is that? How is that changing the game for Veeam going-to-market with your own sales organization? So anytime you're talking about service providers and cloud providers, it's really disruptive to what I would call the legacy organizations in the marketplace. It disrupts manufacturers, it disrupts resellers, it disrupts traditional sales teams. It gets complicated when you start talking about various commission plans. You really, on the one hand, have this mechanism that can bring so many advantages to the marketplace but it can at the same time cause turmoil under your own roof. At Veeam, I think we've really done a nice job of cracking the code. So while I represent the service provider business and the cloud provider business, I have peers across the country and across the globe who I would call are more traditional and user-facing sales people, right? If you think multiple years back, what are they trying to do is have their customers consume Veeam as a license. And then after the license, they'll pay maintenance fees for perpetuity, hopefully. What we've decided is how do we put a plan in place where our sales team can go out to their end users and their prospective end users and say to them, how you consume is your business? What makes the most sense for you? Do you want to consume on-prem? Fantastic. Do you want to consume on-prem and make a backup of your backup job and move it to the cloud? That's great too. Do you want to push all of the business and use IBM cloud as part of the infrastructure as a service where you won't own any of the Veeam technology on-premises, but IBM will own it and they'll provide it to you as a service, we have you covered there too. What we did was we came up with a compensation model internal that makes the cloud and service provider business an integral part of the go-to-market plan of our sales organization. So we have compensation models that when an end user sales rep, for lack of a better term, is selling to their end customer, they can offer up consumption models that benefit the customer the best way and still get compensated at an even playing field. So there's some mathematical equations behind the scene to make sure that we figured out how to compensate them and some operational tools we put in place to make sure that they are compensated accordingly and that really eliminates a lot of the friction between sales organizations. So if an IBM cloud customer wants to buy backup as a service monthly, they can do that. They can pay, now you probably make them sign up for some period of time, is that right? So let's say it's an annual commitment or maybe it's whatever it is. And I'm sure there's various incentives the longer you sign up, the cheaper it is per month. But they can consume monthly, pay monthly presumably, or okay, and you guys worked it out in the back end. You and IBM. Internally at Veeam, we worked it out so we could pay our sales teams, right? So the IBM sales teams will continue to get paid based on consumption. Transparent to them. Transparent to them, that's the key. It's transparent to them. All they know is they have an army of Veeam sales people that have a vested interest to make their joint customers successful regardless of consumption models. Okay, and then as it relates to the business resiliency team, that's somewhat of a different, well it could involve cloud obviously, but it's a different equation, right? So you got IBM, GTS guys in there, maybe doing business impact analysis. Do you guys participate in that or how does that relationship work? So it's a very new relationship, but we are putting the foundational elements in place so that we would participate in those types of proofs, the concept and foundational elements where they make sense. And in those scenarios too, we do have programs and policies in place with in Veeam to again mitigate and eliminate any friction between the sales organizations. Okay, go ahead. Oh, I was just going to say, in terms of Google Cloud for a second, sounds like basically regardless of who's selling it, the end user business, it's like a two-year-old adventure, whatever is ideal and efficient for their business. Are you seeing any industries in particular that are sort of early adopters of what you guys are doing with IBM? You think of heavily regulated industries, financial services, healthcare, are you seeing any sort of leading industries there or is it sort of a horizontal challenge? They're doing it. It's a really great question. And when you think about the use cases for data availability, especially as it pertains to the cloud, backup and disaster recovery are really one in two as far as cloud use cases. So it's really universal. I would say I probably couldn't put my finger on one vertical market because they all have a need. Now, when you get into the highly regulated markets of healthcare and financial services, some of our cloud providers such as IBM really have some unique expertise, but everyone really needs the best solution for a backup and DR in the cloud. You know, I can talk about some unique case studies like we have with Mobius. Mobius is an enterprise communications company who happens to be here and some of the Veeam staff will be doing a session with the folks from Mobius talking about why Mobius chose for their enterprise which has thousands of customers and really works with some of the largest telephony companies in the world why they chose the IBM cloud and why they chose IBM cloud with Veeam in particular. So it crosses across all segments really. Can you talk about the channel dynamic here? You know, you basically think about the channel when the cloud really started to take off, you know, the message to the box seller, box sellers we love you, but it was moving, you know, 90% of the market for hardware and software, but you could see that differentiation wasn't there. So it was getting commoditized. You had to change, you had to add value somehow whether you're an SAP specialist or an Oracle specialist or Veeam where maybe an ISV and then you have who you service, the cloud service providers. How has the channel adapted to all this? The channel is adapting and it's evolving rapidly. Just like any change in an ecosystem, some aren't going to be here in the years to come if they don't evolve and adapt quick enough. What I'm really seeing and what my team is seeing is that a lot of our traditional channel partners are either teaming up with cloud providers. So IBM has a cloud provider program and a lot of the resellers we work with, they resell IBM cloud and Veeam on the IBM cloud. You have a lot of other channel partners that are really starting to develop their managed service practice. So they'll put a wrapper around some of the cloud offerings and cloud services that are out there. That might be a multi-cloud environment which is inclusive of the IBM cloud where it might be a different scenario. But that's probably the fastest growing segment of the IT management space is really the service providers because they have to evolve and they have to adapt. And a lot of them are trying to figure out what is their next play? How do they differentiate? Are they as expert in the healthcare space? Are they an expert in the financial services space? But the first step is transitioning from that traditional upfront CapEx business model where they're moving a box to building a recurring revenue-based business model that offers cloud services and management of cloud services. How about the service providers? How do you see them differentiating? John and I, Furrier and I got in a big sort of debate this morning, AWS infrastructure service. How does IBM differentiate software with sort of my push? But how are you seeing the cloud service providers beyond the big three, four, or five differentiating from the big whales? Every day they're trying to figure out how to differentiate from the big whales. I mean, that's part of what they get up every morning and probably go to sleep every night thinking about. So, sometimes they partner with the big whales. This isn't an island of technology, so to speak. This is truly an ecosystem. Some of the best service providers within the ecosystem that I'm responsible for or for phenomenal services to their customers and there are some workloads that they manage themselves. There are some workloads that they'll be the first to say are better off being managed or run in a hyperscale type environment like an IBM cloud or an Azure or an AWS and they may provide some kind of management service. So what a lot of them do is, again, they start to build these wraparound services so that they can evolve because there is no one right answer and even within an organization there may not be one right answer because different workloads require different business, different clouds, different managed services. They need to be handled differently. If you have workloads that are very elastic, very spiky, so to speak, right? Maybe it's an online application around the holiday season that's going to be hit hard and it's going to hit often but for a very short period of time, perhaps that type of application put up in a public cloud in a hyperscale or for, again, lack of a better term. There may be kind of the old, steady applications that the managed service provider might want to manage themselves, right? But they will come in and they'll do the needs assessment, they'll evaluate the situation, they'll make the recommendation and then they'll build their services around that recommendation and the beautiful thing about working with Veeam is that no matter what the answer is, we have the solution. So Veeamon is coming up in May 14th through the 16th. theCUBE's going to be back there again. What are you excited about with Veeamon 2018? Maybe some customers that might be on stage sharing their stories. What can you share with us about what excites you about your big event? Sure, sure. When I think about Veeamon, what excites me, now this is a little bit personal because I have to have responsibility for this team, but for the last nine quarters, one of the fastest growing segment of the Veeam business has been its cloud business. We have grown over 50% year over year and that's a global number. So while Veeam itself is having phenomenal growth, the marketplace in which we compete, growing seven, eight percent again, depending on who you read, Veeam is a total 2016 to 2017 growing at 36%. Our cloud business growing at over 50% and helping that cloud become a part of everyone's story and everyone's business is really exciting to me. So we'll have multiple service providers, multiple cloud providers up on stage, doing case studies and testimonials, talking about how our mutual and customers have benefited from the programs that we've put in place to help everyone get better together. Yeah, I think the other thing you see if I can interject, I mean, what I might take away from last year was you guys going hard. Everybody's going after multi-cloud, but your perspective on digital business and availability to support multiple clouds and you're building relationships with companies like IBM and you got a good vision around that. So I got to believe we're going to hear a lot about that as well. You sure will. Well, it sounds like a lot of momentum. Matt, thanks so much for stopping by theCUBE, sharing what's new, what excites you and the momentum that you guys are carrying forward. Pretty exciting stuff. Thank you for having me. I really appreciate it. It's great to be back. I look forward to speaking with you at Veeam on. We'll see you then. All right, we'll see you then. We want to thank you for watching theCUBE live on day one of IBM Think 2018. I'm Lisa Martin for Dave Vellante. Check out Wikibon, check out SiliconANGLE Media for the latest news and analyst insights into all things cloud, AI, machine learning, blockchain, et cetera. Dave and I are going to be right back with our next guest after a short break. We'll see you in just a few minutes.