 From Miami Beach, Florida, it's theCUBE, covering Veeamon 2019, brought to you by Veeam. Welcome back to Miami, everybody. This is theCUBE, the leader in live tech coverage. My name is Dave Vellante. We're here at the Fontainebleau Hotel Veeamon Day One of two-day coverage of the Veeam conference, very swanky hotel. Dave Russell is here as the vice president of Enterprise Strategy at Veeam. David, good to see you again. Thanks so much for coming on theCUBE. Yeah, thanks for having me again. You're very welcome. So let's see, you're well over, let's see, a year out. There's just about a year out of Gartner, right? And so, okay, so you've been injected with the Kool-Aid fully, I presume, right? And painted green. But we're still going to talk a little bit about the magic water, but before we get into that, talk about your first year here. Your impressions, did they meet, exceed your expectations? It exceeded my expectations, but I can honestly say I'm not doing what I thought I was going to be doing here, but it actually turned out to be better. The other thing I would honestly tell you is by I'm on Pacific Coast time at the moment, Arizona, we're too unsophisticated for daylight savings, right, so I'm either mountain or Pacific, but I'm Pacific now. But by 10 a.m. my time, I pretty much, what I thought I was going to do that day is out the window, and I'm doing something else. And it's fun though. I mean, now, especially with the investment that we had earlier in the year and the cash reserves we ended last year with, looking at a lot of partnership capabilities, looking at ecosystem activity, certainly involved with customer activity, we're redoing our marketing and how we're focusing our go to market. So it's a whole variety of things that sort of change hourly. So when you talk about the M&A side, I mean, you've always been a dot connector and you're right, because you talk to all the vendors, you talk to all the customers, and you could see the picture, you have a huge observation space. So part of your job on strategy is to try to what, figure out where the gaps are, and then drive strategy around, do we build, do we buy? Maybe you could talk about that a little bit. Yeah, well, I mean, it really does net down to what you said. It's a bill by decision, it's an acceleration to market kind of a decision. And then the hard part is, what are you willing to trade off? You know, and of course the real answer is, as little as humanly possible. But you have to decide, just because you can do it, just because you have the money, doesn't necessarily mean you should pull the trigger. So if anything, it's curious because people like myself and a couple of my colleagues, we almost are more discerning. So we look at, okay, the technology, is it really viable, do our due diligence, right? But then we also look at, well, does this fit culturally? Is the integration point really there? Is the customer value really going to be significantly improved? And if you can really not answer that very favorably, then keep the money. So you worked at IBM for a number of years, you worked at Gartner for a number of years, now you're back working for a vendor. Compare and contrast those roles. I mean, Gartner, you do a lot of writing, you do a lot of traveling, you talk to a zillion people. I'm sure you talked to a lot of people here too, but you're coming at it from a very biased perspective, whereas Gartner, of course you're unbiased, you're serving the end customer. So talk about the difference in those two roles. So I approach it a little uniquely in that I am biased, I mean, I'm paid by a vendor, right? So, you know, there's a certain inherent bias in there, but I go into a customer conversation and say, you know, maybe you shouldn't be using being for certain things. So I'll give you an example. You know, we have Unix capabilities with Solaris and AIX. There are other vendors that do that even better than we do. They have rich application integration. As someone says, that's my number one problem, honestly, we're not your best choice. Now, the reality is most of the world's moving towards more physical and virtual windows and Linux. So I come into, say a large enterprise and I'll say, okay, if you're like most shops, and I always undersell it, like probably 85% of your workload is physical, virtual, Windows, Linux. And they always interrupt me and go, no, no, it's 92%, like okay. Well, we can help with that 92%. The other 7%, I'm honestly going to tell you, we're not best to breathe. Yeah, that's a safe balance view, like the AIX Solaris piece, that's how it is. My series, you know, there's certain things, you know, we want to stick to our swim lane. We think it's a pretty wide lane, but there's no reason to come out of it. So you roll a strategy. Talk a little bit about how you're turning that strategy into action and specifics at Beam. Yeah, a big part of it has to do with cloud. I know that's the word that we've been talking about for a long, long time. So there's the aspirational aspect of cloud and the operational. The aspirational is I want to be able to move in and out, I want mobility, I want the ability to exit. The operational is I want to be able to do this efficiently. I mean, I want to be able to either send data to the cloud, my on-prem backup, or I want to be able to protect SaaS-based workloads or infrastructure as a service workload, so cloud-native workloads. And then over time, I might want to be able to leverage that for something other than availability. So how can you rapidly make the data and only the portion of data that I need available to me when I need it? I was taking some notes during the keynotes and I was just doing like a little, not really a tag cloud, but I was trying to identify as I heard them and grabbed them the attributes of cloud data protection. I'm going to throw some out to you. You tell me, we'll play a kind of word association again. So I had fast recovery, API-based, open, simple, transparent, data-oriented, automated, cloud pricing federated to accommodate the edge. Are these some of the attributes that we should associate with cloud data protection? Maybe some of the things that I'm missing, how do you look at the attributes of a company and its products providing cloud data protection? Yeah, so a big part of it, I actually like to phrase hybrid cloud even better than people say multi-cloud. The reason I like that is because hybrid presumes that you could have on-premises as well. So if it was the Dave and Dave company tomorrow, we'd probably be born in the cloud, right? Everything would be software as a service. We'd get some public cloud space. Now if we've been in business for 20 years, we've got investments that we've made and we don't want to get rid of that any sooner than we have to. So hybrid cloud I like, but I think you nailed it in that, what does everyone of those attributes have in common? It's trying to get your most precious resource to you in a way that you want to consume it with the least amount of friction as possible. We want to reduce the aggravation associated with being able to access that rapidly. When you think about the customer conversations that you've had at Veeam and even go back to your Gartner days, I've always felt like this notion of not hybrid, I see hybrid and multi-cloud as different. I've always looked at multi-cloud as multi-vendor. Yeah, I've got a line of business, I've got shadow IT, I've got different IT projects and I've got multiple clouds. And to me it was always less of a strategy than sort of this is where we are and now people need to put together a hybrid strategy. It's like IT's been asked to come clean up this mess as it always is. What's your take on the hybrid landscape and how we got here, but more specifically customer strategies when you consult with your customers? Yeah, you're right that there's a lot of departmental buying, and there's a lot of some cases it's best to breed, so I'm very willing to go and look at multiple providers because I didn't sign up to go deploy the third best solution. Everyone wants what they think will be the most appropriate tool for them and rightfully so. So I think that's how we got to your point. We didn't have a strategy that said I want 10 vendors. We arrived at an implementation choice that resulted in 10 vendors being deployed. And then to your point further, then we had to layer on something on top of that. That's really where we come in and as simple as it sounds, we really want to promote choice, choice of infrastructure, choice of cloud, choice of hypervisor, choice of operating system. So great discussion vector is the best of breed versus sort of integration. And my question is, because that's been decades long sort of trade-off that people have made. You see it in the software business, the hardware business and all through the industry. Is the API economy changing that? Can you be both? I mean, Veeam, let's agree. Veeam is a best of breed provider and while your portfolio's growing, your billion dollar company, you take a company like Adal who's got this ridiculously large portfolio, they can come into a customer and say, well, even with services or an IBM, we can wrap the big blue blanket around you and integrate everything. With the API economy, does that change the game on that argument of best of breed versus integration and convenience? It's a nuanced answer. The answer is a little yes and a little no. It depends. And let me decompose that because that's a cop out. But the, it depends aspect is really, APIs are wonderful to create an ecosystem and other integration points. If that's about offering your expanded ability to do something, that's a positive. If that really means that, well, because I can't deliver what you need, you've got to go and write it yourself, that is a negative. So if the API is leveraging something for even greater value, but beyond what the tool is originally designed to do, I think that's not positive. If you have to exploit the API just to get the product to work, you know, why did I buy your product when I have to go hire someone to write code to work your product? You know, that's a, no one got in that business. Okay, so the last Gartner Magic Quadrant that came out was the one that you sort of spearheaded back in 2017. It was like this perfect storm of backup analysts leaving Gartner. And so there's been a little bit of delay in terms of the new one coming out, which is coming out shortly as I understand it. But one of the observations that you can make if you look at the 2016 to 2017 Gartner Magic Quadrant is that Veeam moved from lower right to upper right, which is rare. Can you explain that a little bit? You were saying that it usually goes in a different pattern. Lucidate, please. Yeah, so the magic in the Magic Quadrant is if you could actually jump from one quadrant to straight to leaders, and that would be a very atypical progression. Usually it's a backward Z, you come into the lower left, probably get over to the lower right, fall back, but go up to the upper left, and then maybe you get to leaders in the upper right. The magic part in the Veeam, the thing that they were able to do is go from visionary lower right to leader upper right. Okay, and why do you think they were able to do that? I mean, there are numerous attributes, but presumably 350,000, I think is the number of customers helped. And so you got a lot of references and proof points, the technology itself, but it's rare, why do you think Veeam has been able to succeed in that regard? I think because Veeam's been good about getting answers to the most pressing problems. Again, Veeam doesn't do everything, it doesn't support every single operating system, but the vast majority of the concentration of where customer issues are and customer environments are getting deployed at, we can address very well. And actually this weekend, I got here Friday night. So all day Saturday, all day Sunday, and yesterday till 5 p.m., I took our SE training. And so I deployed Veeam, worked with Active Directory, all kinds of things for 72 hours basically. And it was really that easy to use. In fact, my most difficult thing is I stayed in class till 6.30 at night because I'd never done Active Directory. I've never been exchange admin before, so I had to kind of come up to speed on those tools a little bit. But once I got that, it was the product was incredibly powerful, but also very intuitive. So you still have a little bit of that independent analyst DNA in you, so I'm going to ask you to try to put that independent hat on. When you think about Veeam's traditional base of SMB, very successful there, obviously super glued itself to the virtualization trend. The last couple of years, Veeam was trying to move upmarket, develop some relationships with some large players, and has had some success there. Is the product well suited for that larger enterprise? And where do you see that going in terms of the upmarket progression? Yeah, so in theory, that's what I'm here to drive. The enterprise word is in my title, but in reality, I focus more broadly than that. But if I just think about enterprise, I ran the numbers last week, and company inception to date, we've actually derived over $2 billion of software-only revenue from the enterprise market. And that's been accelerating. Now in 2017, 18 in the first quarter of this year, almost $1 billion. So we're moving and we're moving fast. We had our sales kickoff, like most companies do, right? January, go to sales kickoff, and Rattmer says, hey, don't chase just the big deals, the $2 million deals. We've never sold a $2 million deal without having a $200,000 deal first. The very next week, we got a $2 million deal on the first paper. So he shot low, he should have said $5 million. But the interesting thing about Veeam, and to answer your question, I think we resonate with the kind of challenges a large enterprise has. We allow them to move at their own scale. If they want to move in a very large fashion, they can with Veeam. I would honestly tell them move as appropriate for you, as assets age, as you're willing to take on the change in an environment, do so. But I think Veeam is interesting, it's the same piece of software that I installed on my laptop this weekend, that can also go to a Fortune 100 company. The same piece of software that manages 50,000 agents, we have one shop, 50,000 Windows agents. We can do that with the same code base. And the only thing that's different is we just horizontally scale out how we deploy the capacity and then how we deploy the mover agents. I tweeted out this morning, so Rappmer was standing in front of a chart with all these features and over the time. And that's been part of the hallmark of Veeam, is not checkbox features, but real substantive features. And you've had a consistent progression. Even Rappmer said this, we don't have a big long term roadmap that we share with our customers even internally. Yeah, we have a direction and a vision, but very focused, almost like sort of an agile development methodology. But the point is that, and you see some companies are really good at this, some companies are not so good at this, but just consistently delivering features that are in demand that customers want, listening to their customers, and just nailing it. And that seems to be the hallmark of Veeam. And as I say, some companies just don't have that in their DNA. Your thoughts on that. Yeah, I think what it really comes down to is, at the end of the day, every developer thinks like a customer. And they do that because they spend a lot of time on our Veeam forums. I'll be honest, when I was a mainframe backup developer, I didn't talk to that many customers. I was just writing code. And I didn't know how people were actually putting the product to use in production. I didn't always know what feature might be most helpful for them. You were guessing. I was trying to think of the art of the possible, hopefully an educated guess, but I was really just trying to say what might be good, what might be of resonance, versus actually having someone goes on the forum and says, Veeam, what I'd like you to do is X. That's one of the reasons why we do have, to your point, we don't have a 10 year roadmap where we say this feature is coming in 12 months, this feature is coming in 24 months. It's fluid. In some cases, we actually moved up delivering our eight physical agent management by a year because we started selling more and more of those. And people said, I need that feature functionality faster and we're willing to trade off some other feature functionality. So as long as we can continue to respond to the market, I think we're well positioned. How does a capability like that surface itself, well obviously talking to customers, but how does it get into the development pipeline so quickly? Yeah, well in some cases we've got a huge amount of, not just, it's our part of R&D. It's the research, it's experimentation, it's the incubation of new things. So when we find that sweet intersection point, then we can quickly operationalize that. In other cases, we just have to be nimble. We have to react fast. Is it a command and control culture though, where somebody says, okay, this is what we're doing? Or is it more sort of the team gets together and says, oh, this really makes sense based on what the customers are telling us, let's go. And how does that decision get made? Yeah, well ultimately it is a command and control in the sense that our co-founder, one of our co-founders runs sales and marketing, our other co-founder runs R&D, and they ultimately get signed off on their respective areas. But it is collaborative in the sense of, we do bring forward, here's what we're seeing in market, here's what we see in our customer forums, here's what our ecosystem of partners are telling us, here's our view of the top five things we ought to go do. I was struck by the other slide that Ratmir had, it was the $15 billion slide. And it was probably backup and recover was maybe, I don't know, seven out of the 15, if I remember. But there were all these other segments, it was sort of analytics and disaster recovery and data management, all new pockets of opportunity, $15 billion today, obviously growing, especially with the cloud, how do you see that landscape and how does that affect the way you look at strategy? Yeah, so I actually put that bubble chart together. The rationale between the bubbles, the core we put back up in the middle because that's what we do. But also that's how we ingest data. And now we can do other things around it. So the reason for those bubbles and they were varying sizes and the bubbles were sort of in and out of, to varying degrees, the main backup bubble, according to how much intersection we thought as a company we can have with that. Where we thought we could add value, where we thought there was an ecosystem potential. So for example, analytics. We're not going to become the next best analytics company tomorrow, not even years from now. We could partner and we can provide data and we get better access to data to be able to do that. So we want to facilitate that. In other cases, maybe we really do want to go own and acquire. Well, and so to your earlier conversation, I didn't use the term the phrase land and expand, but that's clearly what you guys are doing, starting with the $200,000 sale, growing it to $2 million sale. So those bubbles are potentially cohort sales that you can sell sort of like bananas and bunches, I like to say. And part of that is, who do you sell to? So if you're able to go and dress some of those ancillary bubbles or markets, now you've got a different entree point into the organization. If you're already involved in the organization, now you can offer more value because you can get more out of your data that you've already protected. So it opens up new conversations for us to have. It opens up entirely new buying centers for us too. Well, how is the role of whom you sell to changing? I mean, it was a backup admin historically, right? Or maybe a VMware admin, VM admin. How is that changing? So greatest example, I would tell you are events. So we acquired a company last January or a year ago, January called N2W software. So they're predominantly at Amazon re-event conferences. You go to Amazon re-event and no one's heard of Veeam. And if anyone's heard of either of the two companies, it's definitely N2WS and someone seen it in the marketplace. That demographic tends to be totally different than demographic if you go to the on-premises data center type of conference where they have heard of Veeam and it's a very different sort of mindset. To your point, you know, they grew up in a very different landscape. Now, instead of someone that was well-steeped in server storage and networking, they may be majored in one, possibly two of those things. Now you've got a generalist where he or she's probably in their 20s, has a very different view of what it should take to get something working and has a very different view of how they want to be sold to how you can go and reach them. So the cloud show, there might be a development persona that you're selling to. And obviously, VMware or VMworld, we know what that is, it's IT guys, right? It's the predominant. And how do you see cloud changing that? Is it cloud architects or sort of, you know, cloud leaders, CTOs increasingly? You know, data protection become more and more important to digital business. So how are you seeing that role change because due to cloud? So right now we have to basically have more touchpoints. You know, our typical legacy fan of our customer or customer base, our products, sweet spot, still remains. And they, in some cases, will pull us into the cloud. In other cases, we have to go talk to someone that's entirely different, and again, that's more of an administrative view. But to your point, going up the stack now, if you go to the, not even vice president of infrastructure, you go to the CIO, he or she says, you know, I am tired of thinking about boxes. I'm tired of thinking about where this resides. I want to think business outcome. So for us, that's actually a great conversation because it all comes back to data. That's what we're in the business of doing. We capture, protect, and move data. So that brings it back to strategy. We got to run, but summarize in your words, just sort of the strategy of Veeam and where you see this whole thing going. Yeah, I would simplistically say it's more of the same. We want to continue to offer what we think is the best to breed solution for on-prem and increasingly cloud availability. But also we want to offer real customer value in terms of now being able to leverage that data, get more value out of that. Whether that's DevOps, running analytics against that, security test patch, whatever it may be, we want to be able to give you just the data you need so have granularity and offer speed and ease of use to do that. So as data becomes more and more important, you're seeing companies go beyond backup, trying to get more out of their backup, moving to data protection, data management, not just an insurance policy anymore. Dave Russell, thanks very much for coming to theCUBE. It was great to have you. Thank you so much. You're welcome. All right, keep it right there, everybody. We'll be back with Peter Burrisis, my co-host. We're VeeamOnLive from Miami. You're watching theCUBE.