 Welcome back to Veeamon 2022 where, in the home stretch actually, Dave Nicholson and Dave Vellante here, Daniel Freed is the General Manager and Senior Vice President for AMIA and Worldwide Channel. Daniel, welcome to theCUBE. You got a big job. No, I don't have a big job. I have a job that I love. Yeah, yeah, a job you love. But seriously, Veeam, all channel, right? I mean, it has been. I mean, it's something which, just a few seconds on that piece here, the channel piece, it's something that I love because the ecosystem of partners, an ecosystem of partners is something which is spending its time moving and developing and changing. You've got a lot of partners changing their roles, their missions, the type of services, type of product that they offer. They all adapt to what the market needs and all the markets around the world are very different because of all these different cultures and bridges and everything. So it's very interesting. In the middle of all that, these tens of thousands of partners, and you try to create and try to understand how you can organize, how you can make them happy. So this is fantastic. So, you're native of the continent. In Europe, obviously, we heard Anton today who couldn't be here or chose not to be here because he's supporting family and friends in Ukraine. What's the climate like now to share with us? What's it like in Europe? Just the overall climate and obviously the business climate. So the overall climate, the way I see it or I feel it, and obviously there may be some different opinions that I will always appreciate has also very good opinions. My view is that it seems in Europe that there are a distinction between what people do for businesses. They are thinking for the business, which may be impacted by the situations that we know in Europe because of obviously the issues between Ukraine and because of Russia, that's pretty this way. And then there is the personal view, which is, okay, that happens from time to time, but life continues and we just continue pushing things and enjoying life and getting the families together and so on and so forth. This is in most of the countries in Europe. Obviously there are a number of countries which are a little bit more sensitive, a little bit more impacted, all the ones who are next to Russia or Belarus and so on and so forth from an emotional standpoint, which is totally understandable. But overall I'm pretty impressed by how the economy, how people, how the businesses continue to thrive in Europe. Has Brexit had any, what impact, if any, has it had? So for us, Vim, the impact is, so first there is an impact which is on the currencies. So all the European currencies have slowed down and the US dollar rise is becoming much stronger. Despite its debt, right, shouldn't be, but. But that doesn't impact on the business, I'm just saying. Yeah, right, cool. So everything which is economy or macroeconomy call is impacted. We have the inflation also which has an impact which also has increased because of the oil, because of the gas of everything that has been stacked, it's gonna be stacked. But people get used to it. Us, Vim, from a business standpoint, one of the big things is we start sales selling into Russia and into Belarus and we're giving our technology, our product, our solutions for free to Ukraine. And that was a piece of the business that we were doing within EMEA, which was non-neglectable. So it's, I would say a business whole now that we need to try to fill with accelerating the business service in the other countries of Europe. I mean, okay. So thank you for that, but you really didn't see it in last quarter's numbers that you guys shared with the world, right? I mean, IBM, similarly, IBM said it's noticeable but it's not really a big impact on a business. But given the cultural ties that you had to Russia and the affinity, I mean, you knew how to do business in Russia, it's quite remarkable that you're able to sort of power through that. How about privacy around data in Europe particularly versus the U.S.? It seems like Europe is setting the trend on things like privacy, certainly on things like acquisitions, we saw the ARM acquisition fail. Yeah, yeah, so there is a big difference. Effectively, there is a big difference between, I would say, North America and the rest of the world. And I would say that in the AR, and within the AR, I would say the EU is leaning very much on what we call sovereign cloud. So data privacy, which in other words, data is to as much as possible as to remain within either the EU or better within each of the countries, which means that there is again, it's, I would say, in the AR, it's good, I would say for the business, for the partners, because then they have to develop around the cloud a number of functions to ensure that because of the data privacy, because of the GDPR or rules and things, all the data remains and resides in a given geographical environment. So it's, which is good because it creates a number of opportunities for the partners. It makes, obviously, the life of customers and ourselves a little bit more difficult, but again, I think it's good. It's good, it's part of all the way we structure and we organize. And I think that is going to expand because data is becoming so key, a key element, a key asset of companies, that we absolutely need to take care of it. And it is where Veeam plays a big role in that because we help paying companies managing their data and secure the data in a certain way. Yeah, ransomware has been a big topic of conversation this week. Do you sense that the perception of that as a threat is universal? Are there differences between North America and the EU and other parts of the world? Universal? Yeah, it is universal. We see that everywhere. And I think this is a good point, a good question too, is that it's very interesting because we need to get acquainted to the fact that we are going to have ransomware. We are going to be attacked. No way out. Anybody the morning is waking up, is going on emails and clicking, clicking on an email too late, was a ransomware. What can you do against that? All humans make mistakes, you know you can't. So it will happen. But where it's absolutely very important and where Veeam plays a big role and where our partners are going to play an even bigger role with our technology is that they can educate the customers to understand that to have ransomware is not an issue. What has happened is not a problem. What they have to do is to organize so that if they have ransomware, their data is safe. And this is where I place a big place. You know, a couple of hours back, I was doing a kind of parallel with something else. It's totally crazy. But that's okay, I'm going to say it. It's about the COVID. What, no, what do we do? Do we have something against COVID? No. People are going to get COVID, certainly many people are still going at it. But what is important is to be capable of not being too sick. Yeah. So it is the prevention. So, yeah, which is important. So something here. So there is this mindset, we have psychologically with the partners and they have to provide that services to their customers on how to organize their data using the technology of Veeam in order to be safe if anything happens. So another related question, if I may, when Snowden blew the whistle on the NSA and divulged that the NSA was listening to all the phone calls, there was seemed to be at the time, as I recall, a backlash sentiment in Europe, particularly toward big tech and cloud providers and skepticism toward the cloud. Has the pandemic and the reliance on cloud and the rise of ransomware changed that sentiment? Had the sentiment changed before then? Obviously, plenty of cloud going on in Europe, but can you describe that dynamic? Yeah. No, I think that's, I think that people were too, as usual, it absolutely reminds me when I was at Veeamware, when we went from the physical boxers to the virtual machines. I remember the IT people in the company said, no, I want to be capable of touching. So something here, when you talk about cloud, you talk about something which is virtual, but virtual outside, even outside, somewhere. So there is a resistance, a psychological resistance to where is my data? How do I control my data? And that is, I think that is very human. Then you need to, it takes time, and again, depending on the cultures, you need to get acquainted to it. So that's what happened before the pandemic. But then the pandemic took place and then there was a big problem. There was nobody anymore in the data centers because they couldn't work there. And then people were starting to work remotely. So the IT needed to be organized to compensate for all these different changes. And cloud was one of them, where the data could be stored, where the data could reside, where things could happen, and that's how actually it has accelerated, at least in a number of countries where people are a little bit like ours, to accept the adoption of cloud-based data. So is there a difference in terms of the level of domination by a small group of hyperscale clouds versus smaller service providers? In theory, you have EU behaving in a unified way in sort of the same way that the United States behaves in sort of a federated way. Do you have that same level of domination or is there more market share available for smaller players in cloud? Any regional differences? Yeah, there are big differences. There are big differences again because of this sovereignty which is absolutely pushed very, very, very much in Europe. I'll tell you, I'm giving you an example that it was in, I think in October last year, somewhere, the French administration said, we don't want any more, any administration investing in Microsoft 365 because the data is in Azure, the data is out in the cloud. That's what they said. So now this last week, that has changed because Microsoft introduced a number of technologies, data centers in France and so on and so forth. The things that we need to get better. But this sovereignty, the fact that the data, the privacy of data, everything has to remain in the countries is doing something like the technology of the hyperscalers is used locally, wrapped by local companies like system integrators, local system integrators, to ensure that the sovereignty is set and that the privacy of the data is for real and according to GDPR. So again, it's a value add, it makes things more complex. It doesn't mean that the Google Cloud, the Azure or the AWS are not going to exist in Europe but they are going to be a number of layers between them and the customers in order to make sure that everything is totally wrapped up and that it complies with the EU regulations. Help us understand the numbers, Daniel. So the number of customers is mind-boggling. It's over 400,000 now, is that right? Comparable to VMware, which is again pretty astounding. And the partner ecosystem, can you help us understand the scope of that? Part one, part two is how do you service and provide that partnership love to all those companies? The partners. Yeah. So yeah, we have about 35,000 around the world, 35,000 active partners. But again, it's 10 times less than Microsoft, by the way. So, and this is very interesting. I often have the questions of how do we manage. So first of all, we do cheering like anybody does. We have an organization for that and we have a two-chair sales motion. That means that we use the distributors to take care of the mass, the volume of the smaller partners. We help the distributors, so it's a leverage system. And we take care, obviously, more directly of the large partners or the more complex partners or the ones of interest. But we don't want to forget any of those because even the small one is very important to us because he has his customers, maybe in the middle of nowhere, but he's got a few of them. And again, to have a few of these customers, when you adapt, it makes, at the end, it makes a big business. One plus one plus one million times makes huge things. And plus, we are in a recurring business now, now that we've introduced three, four years ago, our subscription licenses, which means that it's only incremental. So it's just like the telephony business where the number, the cell phone plans, it's always grabbing as many as possible consumers in this case. So it's always the same thing. Or I have the same kind of, I do a parallel with the French bakery, the French boulangerie, where I say they do their business with the baguette. And then from time to time, they sell a pâtisserie or they sell a cake or cookie or something, but the sum of small things makes a big thing. So it is important to have all these small partners everywhere that have their small customers or big customers and that can serve them. So that's the way. So we segment by geography. And what we do now is, it is something which is new. We segment by competencies. So it's what I call the soft segmentation. Because if not, we will have a lot of these partners competing to each other just to sell Veeam. Veeam being number one in many countries. That is what is taking place. And we want them to be happy. We don't want them to fight against each other. So what we do is we do a soft segmentation. And soft segmentation is this partner is competent in this field with that kind of use case, doing this or this or this or this. It's just like you when you go to the restaurant, you want the restaurant next to your place. So you click for the geography and then you want to go for Indian food. So you click restaurant Indian food and then you want something. So we want to give that possibility to the customers to say, yeah, I think I know what I want. And then you can just click and get the partners or the list of partners, which are the most suited for his needs. So it's what I call the soft segmentation. The other thing which is important is the network. It's very interesting because when we look at a lot of companies, it's not a network. You've got VARs, you've got cloud and service providers, you've got SIs, you've got all the things. But if you take each of those individually, they don't have the competencies to answer all the requests of the customer. So the networking is partnering with partner. That means to have the connection so that a partner A, who has his customer, but his customer has a request that this partner cannot fulfill because it's not his competency. That he's going to find the partner or the other partners that can feel this competency and work together and then it's between them to have the model that they want so that together, they can please the customer with their requests. Do you ever want to have Veeamon? I mean, I'm happy it's in the U.S. I like going to Europe. But you ever want to have Veeamon in Europe? Yeah, we have Veeamon. We have mini Veeamons in Europe. You got the mini ones, okay, all? Veeamon tools. Globally. So where do you have them? In Europe and in APJ, yeah, it's what we do. What do you do in APJ? In Japan, obviously. I don't know all the locations. No, okay. Tens and tens of them. A lot of them. Small ones, we do replicate what is done here on one day and then it goes. And you'll do that in UK, France, Germany, local. Small countries in Saudi, in South Africa, in Israel, in Bulgaria, in all these countries. Because, you know, we can be virtual. That's nice. Oh yeah. I love to be having a breakfast or lunch or drink next to a partner or a customer. Because you learn so much more. The informal information is so important to understand how the business and how the market develops and what the needs are of customers and so on and so forth. How was the European attendance this year? It must have been down. It's hard to get into the US. It's actually easier to go back to Europe. Virtually, I don't know the numbers, but I think. Virtual, I'm sure, was huge, but physical. Physically here, we've got about 300 Europeans. Yeah. Okay. Do we know what are the numbers here? Do we know? Have we heard numbers? I know 45 was supposed to be around 45K combined. That's a hybrid, right? Yeah, so it's hard to get into the US. We're still figuring that out, so it's not a surprise. But now, it's complementary, yeah. Do you go to them all? No. You can't, right? No, that's not possible. I can't. Actually, I would love to be capable of duplicate myself, but I'm unique. You go to the one in France, obviously, yeah? Yeah, usually in France, well. Depends if you're home. Yeah, you know, that is interesting, is. The way we organize, the way we organize in Europe, is I really want the local leaders to be the ones managing their countries. Yeah. I'm there to support. I'm not there to be, you know, yeah, the big boss is coming, he's saying, no, it's not that. Again, if they request me to come, if they want me to pass a message to certain types of customer partners, I'll do that. But I don't want to run the show. It's not the way I managed it. Yeah, I get that. You want to respect that, is if you show up in France, and that's your home country, it's like Ratmere showing up here, taking over the stage. It would be like, you know, it's our turn. But it's just like, you know, I'll give you another example. Obviously, we have, it's even the headquarters, the AMA headquarters in France, right? But it is the French office. And I don't go there. I try not to be there, because it is the place for the French people taking care of the French market, for the French manager. If I go there, everybody's going to come and ask me questions, and ask me to make decisions and things. No, they have to run their business. So where do you spend your, where and how do you spend your time? In airports and in planes. Yeah, yeah, yeah, yeah, yeah, yeah, yeah. Of course. Do you have another question? Yeah. Actually, if we have time really quickly, just on that subject of sovereignty, you know, we're here in Nevada, just across the border, California. People in California have no problem at all replicating things here for disaster recovery because it's in the US. Now, is there a, is there a, is there sort of a cultural sense that tearing down those borders from a sovereignty perspective within Europe would fundamentally change the business climate and maybe tilt things in favor of the AWS and GCPs of the world instead of local regional business? The joke that I heard recently from someone, I thought it was funny. I don't know if it'll defend either Germans or French, but it was that, it was that AWS was confused and they were planning on putting a data center in Strasbourg because they thought it was in Germany. And it was the, This is a bad joke. The point is, the point is it's a dumb American, it's a, is it true? No, no, no, but it was a dumb American joke. This was told by a French person. Basically, you know. But this person was certainly not from Alsace. Yes. Because that would have been a very bad one. But the point is this idea that you have these mega hyper clouds coming in and saying, okay, boom, we're putting one here and you're going to use us regardless of the country you're in. How does that, is there a push within the EU to tear those barriers down or are those sovereignty walls enjoyed by the majority because of the way that it changes the business climate? Any thoughts from that perspective? Oh yeah, yeah. To me, it's very simple. It is a hybrid thing. That means that these big hyperscalers are there. They're not going to be used by what they do is they're going to partition themselves and work with these local people so that their big thing appears as being independent, smaller data centers. That's the only thing. You build a house and then you put walls between the different rooms. That's the only thing that happens. So it's not at all a no at all to Azure, the FDS or Google Cloud. No, it's not that. It just means that there is a structural organization that has to be put in place in order that the data resides in given geographical locations. Using their infrastructures, their technologies. Does it make sense? Yeah, yeah, except that it puts them in the position of having to have a physical presence in each place, which is advantageous in one way and maybe less efficient in another. Yeah, but there are some big markets. Yeah, and they eventually got to get there, right? I mean, yeah. They started it, one place in the world where they really started was in ANZ. At least what they did, what, five, six, seven years ago, they put their data centers over there because they wanted to gain the Australian market and the New Zealand market. It's a build it and they will come. Daniel, thanks so much for coming to the very interesting conversation. It's a pleasure. Thank you very much. All right, we're wrapping up day two at Veeamon 2022. Keep it right there, Dave and I will be back right after this break.