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Veeam enterprise push embraces 'hyper-availability,' cloud

Noting that 'data is the currency of the enterprise,' Veeam is taking its platform beyond protection and into more management. VeeamON 2018 laid the groundwork for its strategy.

The Veeam enterprise strategy took front and center at the vendor's annual user conference this year.

Veeam concentrated more on defining its long-term vision and positioning at VeeamON 2018 than it did on delivering a product roadmap.

"We are absolutely focused on the enterprise," Peter McKay, co-CEO and president of Veeam, said at the conference in May.

Veeam said total bookings from enterprises grew 58% year over year during the first quarter of 2018. The number of deals over $100,000 increased by 55% year over year.

'The currency of the enterprise'

Veeam laid the groundwork at VeeamON 2018 for its strategy and vision of what it's calling "Intelligent Data Management for the Hyper-Available Enterprise." That branding marks a shift from its recent "Availability for the Always-On Enterprise" platform. At VeeamON 2017, the vendor launched more product updates than it did in 2018. Continuous data protection was among the 2017 additions.

The hyper-availability platform includes backup, aggregation, visibility of data, orchestration and automation.

We are absolutely focused on the enterprise.
Peter McKayco-CEO and president, Veeam

While availability equates to always on, hyper-availability will enable AI and provide for fluid data movement across multi-cloud environments, said Danny Allan, Veeam's vice president of product strategy.

The only major product launch at VeeamON came in the form of a copy data management feature, Veeam DataLabs, which enables production-like instances of virtual environments. DataLabs expands on the functionality of the technology it is replacing, Veeam's Virtual Labs.

"We have to do more with the data that we have," Allan said. "Data is the currency of the enterprise."

Edwin Yuen, a senior analyst at Enterprise Strategy Group in Milford, Mass., said he's not surprised with Veeam's direction, as it's where the larger industry is going.

"It really should be about data management," not just data protection, Yuen said.

Yuen said Veeam needed to take a position to distinguish itself, and it took the Intelligent Data Management and hyper-availability route.

Tackling the enterprise and other markets

Veeam enterprise products are sufficient, Yuen said. The company has been building out its portfolio to help enterprise customers, for example, in adding physical protection to its original concentration on virtual machines. As it drifts further beyond just data protection, though, Yuen suggested partnerships could help.

A challenge will be in the uniqueness of each enterprise, Yuen said. When they ask for specific features, the question for Veeam will be the following: Which ones do you add to the platform? With the midmarket, it's easier to consolidate those asks.

In addition to the Veeam enterprise expansion, the company still has teams focused on SMBs, up to 250 employees, and the midmarket -- between 250 and 5,000 employees, McKay said. Veeam defines enterprises as having more than 5,000 employees.

One direction in which Veeam is not following the market is into integrated appliances. Commvault, which McKay labeled as one of Veeam's top competitors, launched its HyperScale integrated appliance in 2017 after years of saying it wouldn't get into the hardware business. Startups Rubrik and Cohesity helped to push Commvault in that direction with their converged data protection appliances for secondary storage.

McKay acknowledged that Veeam is "paranoid" about new venture-backed companies. He said he wants to make sure those new companies don't do to Veeam what Veeam did to legacy backup vendors.

Yet, he said Veeam does not plan to make its own appliances, as it intends to stick with selling its own software separately and using partnerships for hardware.

"One of the best decisions we made a while back was not to get into hardware," McKay said.

McKay said Veeam can be more successful through integration with hardware suppliers such as Hewlett Packard Enterprise.

Yuen said the need for an appliance depends on the market. In the midmarket, it's a little higher. Veeam enterprise customers, though, might be OK without an integrated appliance, he said.

Yuen noted that the midmarket is still a big play for Veeam, as the vendor is known for having functionality and simplicity that works particularly well for that customer base. If the midmarket remains an important element, Veeam may need to think more about appliances, he said.

N2WS acquisition creates opportunities

The Veeam enterprise push received a cloud bump at the end of 2017, when the company acquired N2WS, Veeam's first acquisition in 10 years. N2WS provides cloud-native, enterprise backup and disaster recovery for Amazon Web Services (AWS) through its Cloud Protection Manager.

N2WS is operating as "a Veeam company."

"We're still continuing to think like a startup," Ezra Charm, vice president of marketing at N2WS, based in West Palm Beach, Fla., said at VeeamON.

With the backing of a nearly billion-dollar business and access to its resources, though, N2WS is growing. At the time of the acquisition, N2WS had 42 employees. Now, it has close to 70, and Charm said he anticipates the count will climb to nearly 100 by the end of the year. In addition, the company saw 153% growth year over year in the first quarter, Charm said.

The acquisition is opening up new opportunities for Veeam, said Paul Mattes, vice president of Veeam's global cloud business group. For example, Mattes said his company is finding potential customers at AWS events who aren't familiar with Veeam.

Both Mattes and Charm said they believe it's still early in the history of cloud adoption. Users still need education on what AWS and other cloud providers offer.

"Just because it's in the cloud doesn't mean it's secure," Mattes said.

McKay said Veeam will continue to expand organically, but will also look to grow through more acquisitions or investments.

Veeam sets sites on $1 billion of bookings

Veeam is on track to meet its goal of $1 billion in bookings by the end of the year, McKay said.

Veeam hit $827 million in total bookings revenue in 2017. The data protection vendor has 300,000 customers and said it is gaining an average of 133 new ones per day. Selling entirely through the channel, Veeam has 19,000 managed service provider partners.

Veeam remains under the control of its founders and their hand-picked management team. One founder, Andrei Baronov, holds the co-CEO title along with McKay. The other founder, Ratmir Timashev, is senior vice president of marketing and corporate development after serving as CEO from 2006 through 2016. The founders recruited McKay from VMware as COO and president in 2016 and promoted him to CEO in 2017.

Veeam is a private company, and Timashev has claimed for years that the vendor is profitable. That puts it in a different position than Commvault, whose CEO, Bob Hammer, is stepping down following pressure from an activist investor.

"We're not trying to sell our business," McKay said. "We're not trying to go public."

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