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Veeam revenue gets jolt from cloud, enterprise sales

Veeam Software said it grew revenue bookings substantially last quarter on the strength of enterprises and cloud sales. Often, those two markets were related.

Veeam revenue from bookings increased 33% year-over-year in the first quarter of 2017, the data protection vendor said. As a private company, Veeam does not always disclose its revenue and bookings totals, but in January it put its 2016 annual total revenue bookings at $607 million.

Veeam said it increased cloud revenue 59% year-over-year in the first quarter of 2017. The company also recorded a 17% year-over-year increase in new license bookings, largely driven by sales into the enterprise sector. Veeam classifies enterprises as companies with 5,000 employees or more.

Veeam sells backup and replication software products to back up, restore and replicate data on virtual appliances. It was among one of the first vendors to develop backup software tailored for virtual machines (VMs), which need back up tools that recognize the difference between protecting physical and virtual machines. The Veeam revenue push included an uptick in service providers.

“We are off to a really good start,” said Peter McKay, Veeam’s president and chief operating officer. “A lot of it was driven due to the cloud business. That is our Veeam Cloud & Service Providers (VCSPs).”

McKay said the company on average added 4,000 new customers a month during 2016 and the beginning of 2017. Veeam claims a total of 242,000 customers, and it has added more than 15,000 VCSPs over the last three years. The company’s Veeam Availability product protects 13.9 million VMs, and more than 1 million of the VMs are protected via the VCSPs.

“A big part of our scalability and growth has come on the back of our partner community,” McKay said.

Enterprise focus driving new Veeam revenue base

Veeam started out mainly as an SMB and commercial product, but began focusing on enterprise customers over the last three years. That has expanded the Veeam revenue and customer base.

“That (enterprise) segment has accelerated in 2016, and now it has really taken hold in Q4 2016 and Q1 2017,” McKay said. “We’ve been investing in the enterprise over the past three years, adding on the product side and extending solutions to work with ecosystems, partners and providers. We extended the platform and integrated into third parties. We are doing high-touch sales.”

The enterprise segment also is helping to drive Veeam’s cloud sales because enterprises tend to favor the hybrid approach of on-premises and public cloud, McKay said.

“We have had our solutions architects go after that,” he said. “They are looking at backup and disaster recovery. It’s a low-risk use case and you can test it. They want to do something that is easy and cost effective.”

Veeam also has a reseller partnership with Hewlett Packard Enterprise (HPE), with Veeam technology integrated directly into HPE primary and secondary storage. The Veeam Software is integrated with HPE 3PAR StoreServ, HPE StoreVirtual and HPE StoreOnce for data availability.

“We are the availability solution for HPE, and that has given us a lot of growth,” McKay said.

Perhaps because of the strong partnership with HPE, rumors circulated early this month that HPE was about to acquire Veeam. Those rumors prompted McKay to post a blog on the Veeam website denying “false rumors” and stating, “I am happy to state on the record that Veeam is not for sale and this is not part of our company strategy.”

Veeam Backup & Replication software is compatible with VMware vSphere and Microsoft Hyper-V, and the agentless product works on the virtualization layer. Backups are image-based and can be created from snapshots on Dell EMC, HPE, NetApp and Nimble Storage arrays.

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