Veeam executives detail backup trends, company plans
In this Q&A from VeeamON, several Veeam executives discuss data backup trends, the potential of the company going public, and if more acquisitions are on the table.
In more than a year of transition and volatility, several themes have emerged in data protection, from increased use of the cloud to critical cybersecurity threats.
It's also been a time of transition for Veeam. In early 2020, Insight Partners acquired Veeam after investing in the company. Veeam, which claims 400,000 customers, moved from founder-led to private equity ownership. With it, co-founders Ratmir Timashev and Andrei Baronov started transitioning out of the company and into consultant roles.
Veeam CEO William Largent said the transition would probably have happened quicker if not for the pandemic, but it's likely that within 12 months, both former executives will be completely out. In addition, Veeam will soon choose a location in the U.S. that will serve as its global headquarters, which is currently in Switzerland.
Later in 2020, seizing on one of the backup trends in the market, Veeam made its first acquisition in three years, of Kubernetes data protection provider Kasten. Container use has surged, thanks to the platform's portability and IT's embrace of DevOps. However, Veeam CTO Danny Allan said he thinks it will still be some time before container adoption is mainstream. Organizations, though, are starting to realize that container backup is important.
At the VeeamON user conference this week, container data protection was just one of the backup trends top of mind for users. In this collection of Q&As, Veeam executives discussed customer needs and developments, as well as potential next steps for the company.
We seem to be in a period of transition with the pandemic slowing down -- how do you think that affects users' backup and recovery plans and platforms? How will the market respond?
Danny Allan, CTO and senior vice president for product strategy: There is explosive growth in SaaS backup, especially Office 365, because of the pandemic. OneDrive and Teams have been critical for organizations sharing data and collaborating.
We also saw an explosion in cloud. I expect to see much faster pickup of the cloud and in parallel with that, modern data protection for the cloud environments.
Dave Russell, vice president of enterprise strategy: There's pent-up demand, either because people literally didn't have the budget or they couldn't get budgetary approval. And now the floodgates are opening going forward with new application deployments. And there's also the recognition that this work-from-home [might be ongoing], and organizations are going to now have to address it.
What are some of the top security and backup trends and issues?
Gil Vega, chief information security officer: Lately a lot of the customer conversations have been around secure supply chains and obviously ransomware. Ransomware is probably 80% of the conversations I'm having with customers right now. I'm getting pulled in a lot more of those conversations by our product development team because of the cybersecurity components, how the Colonial Pipeline hack has unfolded, what that means, questions about cyber insurance, should we pay ransomware demands, should we report these issues to the FBI -- those kinds of real-world questions that companies are facing today.
What else is most concerning in the security landscape beyond ransomware and supply chains? What should users focus on regarding data protection?
Vega: When you're in the middle of a pandemic and your entire workforce is remote, focusing on how your users behave is probably one of the most important, yet often overlooked, items of the cybersecurity program.
I would like to see more focus on our customers educating their employees, instructing them how to interact with phishing emails. Ninety percent of ransomware attacks, the vector is phishing emails. So if your users don't know how to respond to a phishing email, and they're clicking on everything that shows up in their inbox, you're not really giving yourself a fighting chance.
As SaaS data protection is one of the hottest backup trends, is Veeam looking at additional platform support? Which other platforms are possibilities?
Russell: We're very seriously looking into additional SaaS-based workloads to protect. Probably turn of year, expect to hear more on that.
The most commonly deployed SaaS apps are what we hear about. One of the things that we have to do is handicap. Just because it's deployed or requested often, does that mean that there's actually a clear path to monetize from a Veeam perspective? And does that mean that administrator and buyer is in our sweet spot? If not, that can be OK, it just means we have to cultivate a whole new ecosystem around it -- let's make sure we feel like we've got the ability to do that.
Allan: It's clear there are additional opportunities in the SaaS space.
Why [did Veeam choose] Office 365 to start? It touches every single employee inside the organization. It doesn't matter whether you're sales, development, marketing -- everyone uses Exchange, OneDrive, Teams. Most of the other SaaS platforms touch a smaller subset of the organization. If you look at ServiceNow, it's those people that have an IT operations workflow. If you look at Salesforce, it's clearly sales and marketing.
What has happened is Office 365 has opened people's eyes to [the fact that] these SaaS services do need to be protected. You should expect to see us make moves in that space. But clearly our focus for now remains on Office 365, with very significant room to grow.
Veeam executives have discussed the possibility of an IPO for a couple of years. What's the latest on that process?
William Largent, CEO: I think the best avenue for us is a public offering. It just gives us currency and credibility. I know when I've done three other ones -- when you got larger, and you had that credibility, that you're a public company, you're filing your financials, you're discussing your business -- enterprises get much more comfortable. They know you have a higher standard to live up to from a regulatory compliance and disclosures [perspective].
I think that happens in the next 12 to 24 months. I'd say sooner, but it's just going to take us a while to get things done. We're bigger than a lot of these entities that you might see coming out of private equity firms that are going public. Our structure is more complicated from that perspective. I think it's an 80 to 90% probability that that's the direction, versus we stay inside the PE firm for 10 years, or versus we're sold to some other strategic or PE firm.
Are other acquisitions a possibility? Is there a target area where Veeam could potentially buy -- like you did with Kasten -- rather than build?
William LargentCEO, Veeam
Largent: We have [focused on] build versus buy it. We have just had that mentality inside of Veeam. Kasten was a nice change for us. And it moved us in a direction we hadn't been for a while. We tried [an acquisition] twice before. In 2008, we did a small acquisition of a product line [Nworks]. And then we did another one [in 2017, of AWS data protection provider N2WS] that didn't work out well. I think it's something we clearly should do.
Allan: I will always have a preference for build if it is something core to our platform and similar to what we're already doing. For example, if there's another public cloud we want to provide, we've already done three -- we know what needs to be done to do the fourth and the fifth. So we probably wouldn't buy to do that.
However, when it's a completely new type of infrastructure -- Kubernetes, containers, container orchestration is a very different type of infrastructure. When there's a new opportunity like that, then I think yes, we'd definitely be open to acquisitions.
My team spends a significant amount of time looking at opportunities in the market and Insight Partners encourages that.
Where do you think we are in terms of people's understanding that containers are going to need protection?
Allan: We're well on our way. There's a greater awareness that containers need to be protected than Office 365. The people running containers tend to be people who are running Platform Ops or in the data center. So there's less education that needs to be done. And container adoption itself tends to be more at the enterprise level -- it hasn't made it down to SMB. So the market penetration of containers has not taken off the same way that Office 365 has.
I think we're still two to three years away from mainstream container adoption. However, what I'm very thankful for is for those who are using containers, there is a high level of awareness of the need for modern data protection.
Veeam just announced an in-person VeeamON 2022 in Las Vegas, May 16-18. Will there be a virtual element?
Jim Kruger, chief marketing officer: Absolutely. Our [in-person] VeeamON shows typically get about 2,000 people. With the virtual [this year], there were 40,000 people from 150 different countries -- our reach into the market is much, much broader. So we want to harness and continue that.
We're going to leverage all the content, but we're formulating a plan now where we'll definitely have a separate, really focused virtual event with a separate emcee and things of that sort that will tap into the content. And then of course, we'll have the traditional in-person networking, parties and just a lot of fun at the physical event as well. There's definitely an opportunity for hybrid and having broad reach.
TechTarget assistant site editor Ryan Arel contributed to this report.
Editor's note: These interviews were edited for length and clarity.