 Live from Las Vegas, it's theCUBE! Covering AWS re-invent 2019. Brought to you by Amazon Web Services and Intel, along with its ecosystem partners. Welcome back to Las Vegas, everybody watching theCUBE. We go out to the events and we extract the signal from the noise. My name is Dave Vellante and I'm excited to have Veeam on the program. Good friend Rick Van Over is here. Rick, it's great to see you again. Thanks, Dave. He's the Senior Director of Product Strategy at Veeam and Jim Kruger. Is the new, newly minted CMO. Jim, good to see you. Thanks for coming on. Great, thank you Dave, thanks for having us. All right, so let's talk about re-invent. You guys are well known in sort of like the VMware community, of course. Yeah. Now the cloud comes in. You guys rose like a rocket ship with virtualization. Now cloud's here. How's the show going for you? What are the conversations like? Yeah, it's great. I mean, this is a continuation of the relationship that we have with AWS. We were a global sponsor of one of five companies represented in their global summit. So that was kind of a lead up to this. That's true today, right? Yeah, this morning the partner summit, oh, the earlier course. You know, throughout the whole year, there's like 30 different locations throughout the world that we sponsored. And so that was a really good entree into this new audience for us in terms of new buyers and so forth. And re-invent is huge. I mean, you can't even walk in the hallways out there. Our booth has been packed and just some really good conversations. We had a great announcement as a part of the show. So it's good. Let's talk about that for sure. So give us the update on 2019. You guys hit the billion dollar milestone. We covered you at Veeamon. We've been there for the last couple of years. So congratulations on that. Thank you. Which, of course, is challenging because you're doing a lot more annual recurring revenue. So we're still able to break through that billion dollar mark. But give us the update on 2019. Yeah, so far so good. It's going well. You know, we're going through a transition here. We call it Act One to Act Two. And Act One was really the foundation of the company focusing on virtual environments. Act Two is really moving into the cloud and also moving from perpetual to subscription. And so we're going through that transition as we speak and we're finding really good successes. We're really letting the market dictate that transition. We're not really forcing things on customers. But we had a really good Q3. We grew our annual recurring revenue by 24%. Our enterprise business is actually the fastest growing business within Veeam. It's growing to grow 20% year over year. And our alliances are really on fire year over year for our alliances, for our resellers. We have four of them grew 92%. So we're outgrowing the market significantly, continuing to gain market share. We're still number one in Europe and number four globally, but catching up quick. So Rick, I always, when I first was introduced to Veeam, I think it was at some Veeamug somewhere. Like, it's an interesting name. Who are these guys? And then saw you guys take off and it coincided with a big simplification theme, and better resource allocation. It all was wasted server capacity. But the problem was when we consolidated all those servers, we now had less utilization or less capacity to drive things like backup, which was a compute hungry workload. You guys figured that out from a product standpoint. You simplified things and you took off. So check, great job. Now there's cloud. So what's different about cloud? You guys have some announcements. What are you doing to sort of take advantage of the cloud? So our cloud journey, Dave, is starting, but it's actually evolving from some technologies that have been out for a while. So actually earlier this year, this isn't new, but we implemented a technology that puts data into the cloud, which is kind of a very important first step. Backup data into the cloud, very transparent, very easy to do with Veeam. But everything's different in the cloud. I think the plumbing's different. The use cases are different. The expectations of customers are different. So when we look at how we're going to go into a market from a product standpoint, my team works with Jim's team, as well as the product management team on this very, very purposefully. But the thought is we need to put in the right platform and the right capabilities for the cloud. So that's the big news today here at AWS Reinvent and yesterday, we had a great session today where we showed off the new product, Veeam backup for AWS. And we have been through a lot of iterations on how we're going to get to this milestone and I'm really stoked that it was available for this event, live in a marketplace. And I think about why we're going to go with this new product now this way. Ratmir, our co-founder, likes to say he wants to capture the hearts and minds of IT Pros. And this product will do it. File level recovery, free edition, easy, it just works. Whatever you want to say, we've got it in this product. So I'm really hoping that this will be the year of an additional disruption as we kick off Act 2 that Jim mentioned. You guys have always been feature rich. Sharon, with your audience, the spending data that I have access to. And when you look at it, and you look at spending momentum, you know, it shows some of the new guys, obviously wouldn't be surprised, right? You see in some people experimenting and okay, that's cool. But, and then some of the legacy guys you see sort of, you know, they're hanging on to the install base. Veeam interestingly is right there with the leaders but really consistent spending momentum for, you know, years. And so my question is, you know, how is that, why are you able to sustain that momentum over time? What is your sort of unique? Yeah, I mean, I think there's a couple of key factors there that we've done as a business. One of the, one of the key strategies of the company is to remain agnostic and to build partnerships. And so one of the key strategies that we've had over the past few years is to work with partners. And so we've done, you know, go to markets, some engineering work. And as I mentioned in Q3 alone, we saw 92% year over year growth. And so that's helping us to drive growth. We've added some new products. So we have a backup for Microsoft Office 365, which is a whole new market for us. And we're seeing tremendous growth there year over year. So that's helping us to keep steady. And then just the innovation engine. The development team that we have is, one of the reasons why I joined Veeam is because of the innovation and the development team and how they approach the market in terms of really focusing on the user and building products that aren't just a checkbox, but the products that add a tremendous amount of value. And so, and we have a new, we made announcements here specifically with AWS, but to continue our innovation track, we have a new release that's coming out in the January timeframe called version 10, which adds another 150 plus capabilities. And so I think that's one of the biggest reasons we continue to add value to the system and to our customers. We're adding between three to 4,000 new customers a month and our customer count is continuing to, we're at 365,000 customers today and growing fast. So Rick, I wonder if you could talk from a product standpoint. I said, virtualization, generalizing in cloud. There's specific things for VMware obviously that you do. And I presume they'll do the same thing for clouds. What's unique about, well, first of all, your relationship with AWS and what's unique about sort of making your software work in the AWS ecosystem? Well, the unique part is really our go to market of partnering first. I'd like to say that partnership is in Veeam's DNA. We sell through the channel and we have the alliance relationships, we have the platform relationships like AWS as well as other clouds. And the thought here is that by going in software only, I am actually completely convinced we're very well positioned in the market to come in with a solution that will work for literally everybody no matter what their preference, what brands of technology they use, what clouds they use. And so I think about what becomes interesting, what becomes unique with that. And I'll give you an Amazon example. And this is something that's coming in the version 10 that Jim alluded to. Amazon has a capability called Object Lock which can be used for immutable backups or immutable data. We're using it for backups and that's something that we're going to leverage in our upcoming release that is actually going to be like a huge thing, a huge amount of capabilities where organizations can have their backup data resilient against ransomware, resilient against malicious admins, insider threats or accidental deletion. And that is only possible in the cloud. So like we're walking into a situation where Veeam, if we're going to leverage S3 and some of these capabilities provided by Amazon along with our laser focused approach for backups, we're going to give the market some things that honestly, it'd be really hard to say no to. So can you talk more about that, that immutability capability, timestamp that and then toss the old stuff? It's smarter than a timestamp actually. The thought here is that there's this governance and compliance mode that comes with AWS S3 storage which is a property of a bucket that's set at the top level. And from an API standpoint, when an ISV like Veeam wants to put data into S3, that along with a lot of other elements of the consumption of the storage can be set. And what we're doing is we're actually working backwards into the user interface. And if I want to put my backup data into S3, I'm actually going to say make this data immutable, meaning unable to be deleted or changed. Well, actually you can't change in S3, it's only a delete. But anyways, you can't delete it. So the thought is I'm going to put, I'm just going to make up an example, Dave, seven days into S3, market is immutable. No matter what, that data cannot be removed. So you got a policy on it. Yeah, and it's there. It will not be deleted, no ransomware, no malicious admin, no insider threat. And then we're doing it with a lot of API intelligence. So it's very efficient on how it goes in there and shared metadata. We just did a session on part of that today and we're going to have a huge splash event in January where we take it to the market. So if anybody listening is going to be concerned about ransomware, Veeam has a technology that's evolving for you. So I can set my RPO to whatever I want based on my objectives for the business, the cost equation. Yeah, and it's actually transparent to that. To me, it's a restore point, but I have this ability to sleep at night because I know that it's in Amazon and it's object locked and I can't do anything to it. Yeah, but that was seven days ago. So I now want to update it, right? So you've set a policy to say okay. Yeah, so the eighth day the backup will go and day one will drop and then we'll be at two through eight and then the next day, three through nine, it'll just be a window of sorts and the best part is, Dave, it's going to be transparent. It's in the user interface. It's a restore point and the ease of use. I look at the product team and we really have this mantra, simple, reliable and flexible and who doesn't want those types of capabilities in a product today? And actually it works backwards to one of our co-founders. Andre likes to say his expectation is somebody can download the product and do their first backup within 10 minutes without using the manual. The ease of use has to be like that and with the newest product from Monday we're doing it again. So Jim, I wonder if I could ask you about just sort of messaging. It's interesting, it was interesting to see it beam on. You guys kind of got back to basics. Like there's a lot of money flowing into the data protection industry. You're still seeing new startups. Storage overall is a little soft right now because the cloud's eating away at the big guys but data protection is still pretty hot. As evidenced by some of the spending data that I talked about. A lot of guys talking about data management. You talk about data management too but you got back to the basics at beam on. You talked about, it starts with backup. I wonder if you could talk about that messaging and then how that does relate to some of the new use cases and you mentioned some but what's your point of view there? Yeah, so that is a key initiative for us in 2020 is to shift from kind of the pure speeds and feeds and features and talk more about use cases. So you'll see that come out kind of across our portfolio. That's one of our key marketing initiatives. But yeah, the messaging, we did back in the beginning of 2018, I think we over-rotated a little bit and focused a little bit too much on the enterprise. And as you know, our business is very spread across multiple segments from SMB to commercial to enterprise. And enterprise is of course the key market that we want to go after but we have this great business at the lower end of the market which I think is unique and a differentiator for beam in terms of the number of customers that we have and the customer base that we have. So what we've done is gone back to using words like backup because there's budget for backup. And that's a word that people automatically know what it means, so you don't want to get too cute about it. So we've come out with a new campaign around cloud data management backup for what's next and we're pushing that really hard because I think a lot of people know Veeam as the virtual leader and now we're moving into the cloud area so it's important for us to position the company to not only virtual but virtual physical and cloud. And so you're going to see a lot more push into the cloud with the new solutions we're launching and pushing that hard in 2020. Veeam's always had strong, no BS engineering, the tagline that just works, it's true, you talk to your customers. And it's interesting, when you go to Veeam on and I've been to several, you're right. I mean, you've got guys there that are loyal to Veeam. They may not be huge buyers of just in terms of ASPs but there's a zillion of them and they're very loyal and I think a smart strategy, you just keep moving up markets. You guys are like steady eddy. Give us the last question to sort of 2020, what should we expect from you guys? We've got Veeam on, the cube's going to be there, we're excited, it's always a fun show. Get a passionate crowd. Yeah, yeah, so we have some exciting announcements that we're going to be making in the first of the year and sort of in the mid part of the year which we think are going to be game changers and continue us on the trajectory of growth. So we're very excited about that and yeah, continuing to focus on satisfying our customers. We're super proud of our net promoter score of 75 which is three times, three and a half times the industry and so keeping that momentum going with our customers is critically important. Well guys, congratulations on all your success. You're great, you mentioned your NPS, great customer loyalty, the billion dollar milestone. You know, Ratmere is on, he's on the record last year at Veeam on saying, hey no, we're open to IPO so we'll be watching that and we'll ask him. We won't hit you with that but guys, thanks so much for coming on. All right, thank you Dave. Jim, good to see you. Thank you. All right, and thank you everybody for watching. This is theCUBE Live from AWS Reinvent 2019 from Las Vegas. We'll be right back right after this short break.