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Increasing threats of cyber attacks have led to higher demand for data protection -- and aided a boom in the backup market.
"If you're in the backup and recovery space and you're not growing, you're doing something wrong," said Christophe Bertrand, senior analyst at Enterprise Strategy Group (ESG).
To that point, several backup vendors recently reported strong earnings for the last quarter and year.
Kasten by Veeam revenue skyrocketed in 2021, with a 900% year-over-year increase in bookings by the Kubernetes backup, disaster recovery and migration provider.
Veeam revenue overall also increased. The data protection vendor, which acquired Kasten in September 2020, reported a 27% increase year-over-year in annual recurring revenue for the fourth quarter of 2021.
And Commvault reported revenue of $202.4 million for the last quarter of 2021, an increase of 8% year-over-year.
Kasten cashes in on container protection trend
2021 marked the first full year that Kasten existed under the Veeam banner.
"They had a great product but at the time [of the acquisition], no salesforce and no marketing," said Andy Langsam, senior vice president of Kasten by Veeam. "It was clearly sales-constrained and not product-constrained."
Kasten by Veeam released two major updates to its K10 platform in 2021, including Kubernetes-native protection focused on ransomware attacks. Adoption of K10 increased by 10 times in 2021, according to Kasten. The company did not release specific revenue figures in its January report.
Use of container orchestration platform Kubernetes has soared in recent years. As a result, the need to adequately protect containerized workloads has intensified.
Christophe BertrandSenior analyst, Enterprise Strategy Group
"We see tremendous growth in Kubernetes," Langsam said. "It's kind of like the VMware curve 15 years ago."
Kasten by Veeam did not provide specific customer figures, but said it protects millions of containers in production. High-performance enterprises, including banking and the financial sector, need container-specific data management, according to Kasten.
Kasten by Veeam quadrupled the size of its staff in 2021. The company did not give an employee count, but Langsam said it is still hiring in such areas as sales, marketing, product management, and research and development.
Containers are poised to become the top platform for running production workloads, according to ESG research. The December 2020 report said containers would move ahead of VMs and bare-metal servers in two years.
Containers have been a "very key technology enabling digital transformation," Bertrand said.
According to that ESG report, 75% of respondents said container-based applications can be backed up in the same way as individual applications, which is incorrect.
"You need a backup tool designed for containers, designed for Kubernetes environments," Bertrand said. "That's where Kasten has come in."
Other vendors that provide container protection include Catalogic, Commvault, Portworx by Pure Storage, Trilio and Zerto, an HPE company.
Similar to the disconnect with SaaS applications, Kubernetes users need to understand that their workloads must be protected.
"Overall, the market needs a lot of education still," Bertrand said. "It's getting better, but we're not there yet."
Veeam revenue aided by cloud
The overall Veeam revenue numbers mark the 16th consecutive quarter of double-digit growth.
Specifically, Veeam's Backup for Microsoft Office 365 business grew 73% year-over-year for 2021. The Veeam Availability Suite, which includes Veeam Backup & Replication and the Veeam One IT monitoring tool, achieved 36% year-over-year growth.
Version 11 of Veeam Backup & Replication, released in February 2021, included continuous data protection. More than 450,000 users have downloaded it, according to Veeam.
Veeam reported moving more than 500 PB of data to public cloud storage in 2021.
"All of the cloud numbers exploded in 2021," said Veeam CTO Danny Allan.
For example, Veeam cloud-native data protection -- which includes its backup for AWS, Microsoft Azure and Google Cloud -- reported more than 420% growth year-over-year.
Veeam also changed leadership in 2021. William Largent stepped down as CEO but remained chairman of the board of directors. Anand Eswaran, former president and COO at RingCentral, became CEO in December and set an ambitious $10 billion revenue goal.
In 2022, Veeam will launch its Backup for Salesforce product, which is in beta. Allan said there are three product focuses in 2022 -- security, cloud-based data protection and Kubernetes.
"We have to keep up the pace of innovation," Allan said.
Veeam does not break out specific revenue figures. As a private company, Veeam does not need to report earnings. However, executives including Eswaran have been clear in recent years that they are exploring a potential IPO.
Veeam claims to have 400,000 customers and 4,600 employees.
Commvault also capitalizes on cloud
While the backup and recovery market is on the upswing, Bertrand said there's a move toward broader intelligent data management and using that data for other purposes.
"Organizations that miss that pivot will probably not be in business in the next few years," Bertrand said.
Veeam and Commvault are among the vendors that provide more than backup in their products, veering into overall data management with features such as orchestration and reporting.
In its quarterly earnings report for the last quarter of 2021, Commvault, a public company, reported recurring revenue of $164.4 million. That figure makes up 81% of its total revenue. Revenue beat expectations by $7.62 million.
Commvault CEO Sanjay Mirchandani pointed to the SaaS-based Metallic platform as one of the main drivers of growth.
"As more applications are born in or migrate to the cloud, it's clear that SaaS is the future of the industry and for that matter, the future of Commvault," Mirchandani said on Commvault's earnings call on Jan. 25.
The number of Metallic customers increased about 40% quarter-over-quarter to nearly 1,500, Mirchandani said.
In addition, Commvault recently acquired TrapX, an Israel-based cybersecurity company, and plans to integrate its technology into the Metallic portfolio.
"We believe this technology and talent will broaden Metallic's ransomware detection and prevention capabilities and help customers further reduce their ransomware risk," Mirchandani said.
Enterprise Strategy Group is a division of TechTarget.