(gentle music)
>> Hello, everybody.
Welcome to VeeamON 2022, the live version.
Yes, we're finally back live.
Last time we did VeeamON was 2019 live.
Of course we did two subsequent years virtual.
My name is Dave Vellante,
and we've got two days of wall to wall coverage of VeeamON.
As usual, Veeam has brought together a number of customers,
but it's really doing something different this year,
like many companies that you see.
They have a big hybrid event.
It's close to 40,000 people online,
and that's sort of driving the actual program
where the content is actually different
for the virtual viewers versus the onsite.
Onsite, there's the VIP event going on,
they got the keynotes.
Veeam is a company who's ascendance occurred
during the the VMware rise.
They brought in a new way of doing data protection.
They didn't use agents.
They protected at the hypervisor level,
that changed the way that people did things.
They're now doing it again in Cloud, in SaaS,
in containers, and ransomware.
And so we're going to dig into that.
My cohost is Dave Nicholson this week,
and we've got a special guest, Zeus Kerravala,
who is the Principal at ZK Research.
He's an extraordinary analyst.
Zeus, great to see you.
David, thanks for coming out.
>> Absolutely, good to see you. >> VeeamON.
>> Great to be here.
>> Yeah, we've done VeeamON at live.
Things have changed so dramatically.
I mean the focus ransomware,
it's now a whole new term.
The adjacency to security data protections.
It's just a, Zeus, it's a whole new ballgame, isn't it?
>> Well, it is.
And in fact, during the keynote, Dave,
they mentioned that they're now tied at number one for,
you know, backup and recovery, which is,
I think it's safe to say Veeam does that really well.
I think from a...
>> That's tied with Dell, yes?
>> Right.
>> I don't think they mentioned that.
>> Yeah. But, you know, they've been rising,
Dell EMC's been falling.
And so I think...
>> Somebody said 10 points
that Dell lost in sharing the ADC data.
>> It's not a big surprise.
I mean- >> Wow!
>> they haven't really invested a whole lot,
I think, in that.
>> Anyway...
>> Anyways, but I think from a Veeam perspective,
the question is,
now that they've kind of hit that number one spot
or close to it,
what do they do next?
This company they mentioned,
I was talking to the CTO yesterday,
you mentioned they're holding an exabyte of customer data.
That is a lot of data, right?
And so they do back recovery really well,
they do it arguably better than anybody.
And so how do they take that data
and then move into other adjacent markets
to go create not just a back recovery company,
but a true data management platform company
that has relevancy in cyber and analytics
or artificial intelligence and data warehousing, right?
All those other areas I think are really open territory
for this company right now.
>> You know, Dave, you were a CTO at EMC
when you saw a lot of the acquisitions
that the company made.
You know,
they really never had a singular focus on data protection.
They had a big data protection business
but that's the differentiator with Veeam.
That's all it does.
And you see that shine through.
From a CTO's perspective,
how do you see this market changing, evolving,
and what's your sense as to how Veeam is doing here?
>> I think a lot of it is being driven by
kind of, unfortunately, evil genius out in the market space.
>> Yeah.
>> I know we're going to be hearing a lot about ransomware,
a lot about some concepts that we didn't really talk about
outside of maybe the defense industry air-gaping,
logical air gaping.
Zeus, you mentioned, you know,
this question of what do you do
when you have so many petabytes of data under management.
>> Exabytes now.
>> Exabytes. >> Yeah
>> I'm sorry, I see there I'm already falling behind.
One thing you could do
is you could encrypt it all
and then ask for Bitcoin
in exchange for access to their data.
>> Yes, that is what a lot of them do.
>> So we're getting so much of the evil genius stuff
headed our way,
you start thinking in those ways.
But yet to your point,
dedicated backup products
don't address the scale and scope and variety of threats,
not just from operational, you know, mishaps
but now from so many bad actors coming in from the outside,
it's a whole new world.
>> See, as analysts,
we get inundated with ransomware solutions.
Everybody's talking about it across the spectrum.
The thing that interested me about what's happening here
at VeeamON is they're sort of trotting out this study
that they do.
Veeam does some serious research.
You know, thousands of customers that got hit by ransomware
that they dug into.
And then a larger study of all companies,
many of whom didn't realize
or said they hadn't been hit by ransomware.
But they're really trying to inject thought leadership
into the equation.
You saw some of that
in the analyst session this morning,
it's now public.
So we could talk about it.
What were your thoughts on that data?
>> Yeah, that was really fascinating data,
'cause it shows the ransomware industry,
the response to it is largely reactive, right?
We wait to get breach,
we wait to get held at ransom, I suppose,
and then a lot of companies paid out.
In fact, I thought there's one hospital in Florida,
they're buying lots and lots of Bitcoin
simply to pay out ransomware attacks.
They didn't even really argue with them,
they just pay it out.
And I think Veeam's trying to change that mentality
a little bit.
You know, if you have the right strategy in place
to be more preventative,
you can do that.
You can protect your data
and then restore it right when you want to.
So you don't have to be in that big bucket of companies
that frankly pay
and actually don't get their data back, right?
>> Like a third-
>> Yes. >> I think, roughly.
>> It's shocking amount of companies that get hit by that.
And for a lot of companies,
that's the end of their business.
>> You know, a lot of the recovery process is manual.
As again, a technologist,
you understand that that's not the ideal way to go.
In fact, it's probably a way to fail.
>> Well, recovery's always the problem.
When I was in corporate,
IT used to joke that we were the best at backup,
terrible at recovery and-
>> Well, you know... >> that's not atypical.
>> My friend, Fred Moore, who was the vice president
of strategy at a company called Storage-Tech
Storage Technology Corporation,
he had a great saying.
He said, "Backup is one thing,
recovery is everything."
He said that 30 years ago.
But orchestration and automating that orchestration
is really vital.
We saw in the study,
a lot of organizations are using scripts.
And scripts are fragile.
Yeah, they break, right?
>> Yeah. No, absolutely. Absolutely.
Unfortunately the idea of the red run book on the shelf
is still with us.
Scripting does not equal automation necessarily
in every case,
there's still going to be a lot of manual steps in the process.
But, you know, what I hope we get to talk about
during the next couple of days is,
well, some of the factors that go into this.
We've got day-zero exploits
that have already been uncovered,
that are stockpiled and tucked away,
and it's inevitable that they're going to hit.
>> Yeah.
>> So whether it's a manual recovery process
or some level of automation,
if you don't have something that is air-gapped
and cut off from the rest of the world
in a physical or logical way,
you can't guarantee...
>> The problem with manual processes and scripting
is even if you can set it up today,
the environment changes so fast, right?
And with shadow IT and business units
buying their own services,
and users storing things,
and you know, wherever,
you can't keep up with scripts in manual.
Automation must be the way,
and I don't care what part of IT you work in,
whether it's this area in networking,
communications, whatever,
automation must be the way.
I think prior to the pandemic,
I saw lot of resistance from IT pros
in the area of automation.
Since the pandemic, I've seen a lot of warming up to it
because I think IT pros now just realized
they can't do their job without it.
>> So you don't think that edge devices
lend themselves to manual recovery processes?
>> No. In fact, I think that's one of the things
they didn't talk about including...
>> What's that?
>> Is edge.
Edge is going to be huge.
Every retailer I talk to,
oil and gas company's been using it for a long time.
You know, manufacturing organizations are looking at edge
as a way to put more data in more places
to improve experiences,
'cause you're moving the data closer.
But we're creating a world where the fragmentation of data,
you think it's bad now,
just wait a couple of years until the edge is a little more,
you know, to life here.
And I think you ain't see nothing yet.
This world of data everywhere is truly becoming that.
And the thing with edge is there's no one definition edge,
you got IoT edge, cellular edge, campus edge, right?
You know, you look at hotels, they have their own edge.
I talk to Major League Baseball, right?
They have, every stadium's got its own edge server in it.
So we're moving into a world
where we're putting more data in more places,
it's more fragmented than ever,
and we need better ways of securing that data.
But then also being able to recover for when things happen.
>> I was happy that Danny Allen,
he used the term that we coined called super Cloud,
he used that in the analyst meeting today.
And that's a metaphor for this new layer of Cloud
that's developing to your point,
whether it's on-prem and a hybrid across Clouds,
not just running on the Cloud
but actually abstracting away the complexity
of the underlying primitives and APIs.
And then eventually to your point,
going out to the edge,
I don't know if anyone who has an aggressive edge strategy
Veeam to its credit, you know,
has gone well beyond just virtualization,
and gone to bare-metal into Cloud,
they was first at SaaS,
they acquired Kasten, who was a partner of theirs.
And they tried to acquire them earlier
but there was some government things
and, you know, that whole thing.
That got cleaned up and now they own Kasten,
and I think the edge is next.
I mean, there's going to be so much data at the edge.
I guess the question is where is it today?
How much of that is actually persisted?
How much goes back to the Cloud?
I don't think people really have a good answer for that yet.
>> No. In fact, a lot of edge services
will be very ephemeral in nature.
So it's not like with Cloud where we'll take data
and we'll store it there forever.
With the edge,
we're going to take data,
we'll store it there for the point in time we need it.
But I think one of the interesting things about Veeam
is because they're decoupled from the airline hardware,
they can run on virtual machines and containers.
Porting Veeam to whatever platform you have next actually
isn't all that difficult, right?
And so then if you need to be able to go back
to a certain point in time,
they can do that instantly.
It's a fascinating way to do backup.
>> Good point about it, I mean.
You remember the signs up and down,
you know near the EMC facility,
right outside of Southborough,
no hardware agenda,
that was Jeremy Burton when he was running Veritas.
Of course, they've got a little hardware agenda.
But Veeam doesn't.
Veeam is, you know,
they're friendly with all the hardware players,
are pure play software.
A couple other stats on them.
So they're a billion dollar company,
they've now started to talk about their ARR growth.
They grew 27% last year in annual recurring revenue,
25% in the most recent quarter.
And the vast majority of their business is subscription.
I think they said 73% is now subscription based.
So they really transitioned that business.
The other thing about Veeam
is they they've come up with a licensing model
that's very friendly.
And they sort of removed that friction
early on in the process.
I remember talking to Ratmi about this,
he said, we are going to incent our partners
and make it transparent to them,
whether it's, you know, that when we shift from, you know,
the crack of perpetual license to a subscription model,
we're going to make that transparent to partners,
we'll take care of that.
Essentially, they funded that transition.
So that's worked very well.
So they do stand out, I think,
from some of the larger companies at these big portfolios.
Although the big portfolio companies, you know,
they get board level contacts
and they can elbow their ways in.
Your thoughts on that sort of selling dynamic.
>> So navigating that transition to a subscription model
is always fraught with danger.
Everybody wants you to be there,
but they want you to be there now.
They don't like the transition that happens
over 18, 24 months to get there
>> As a private company, they're somewhat shielded
from what they would've been if they were popular.
>> Yeah, for sure.
>> Exactly.
But that bodes well from a Veeam perspective.
The other interesting thing is
that they sit where customers sit today.
In the real world,
a hybrid world not everything is in the Cloud
or a single Cloud.
Still a lot of on-prem things to take care of.
And that's the idea.
>> And there will be for a long time.
>> Exactly. Back to this idea.
Yeah, there's a very long tail on that.
So it's well enough to have a niche product
that addresses a certain segment of the market,
but to be able to go in and say,
"All data everywhere it doesn't matter where it lives,
we have you covered."
That's a powerful message.
And we were talking earlier,
I think they stand a really good shot
at taking market share,
you know, on an ongoing basis.
>> Yeah. The interesting thing about this market, Dave,
is they're, you know, although, you know,
they're tied to number one with Dell now,
it's 12%, right?
This reminds me of the security industry
five, six years ago,
where it's so fragmented,
there's so many vendors, no one really stood out, right?
Then what happened in security?
It's a little company called Palo Alto Networks came around,
they created a platform story.
They moved into adjacent markets like SD-WAN,
they did a lot of smart acquisitions and they took off.
I think Veeam is at that similar point
where they've now, you know, that 12% number,
they've got some capital now.
They could go do some acquisitions that they want to.
There's lots of adjacent markets that they talk about,
this company could be the Palo Alto
of the data management market if, you know,
and based on good execution.
But there certainly the opportunities there
with all the data that they're holding.
>> That's a really interesting point,
I want to stay there in a second.
Obviously, there's backup,
there's recovery, there's data protection,
there's ransomware protection, there's SaaS data protection.
And now all of a sudden,
you're seeing even a company like Rubrik,
is kind of repositioning as a security play-
>> Yeah.
>> which I'm not sure that's the right move
for a company that's really been focused on backup
to really dive into that fragmented market.
But it's clearly an adjacency.
And we heard Anand,
the new CEO today in the Analyst segment,
you know, we asked him,
"What's your kind of legacy going to look like?"
And he said,
I want to defragment this market, he's looking at.
He wants 25 to 45% of the market
which I think is really ambitious,
I love that goal.
Now to your point-
>> Big range. >> It sure.
But that doubles from today or more,
and he gets there to your point,
possibly through acquisitions,
they've made some really interesting tuck-ins with Kasten.
They certainly bought an AWS Cloud play years ago.
So Veeam was purchased by private equity,
Insight Capital in January of 2020,
just before COVID for $5 billion.
And at the time,
then COVID hit right after,
you were like uh-oh.
And then of course the market took off,
so great acquisition by Insight.
But I think an IPO is in their future,
and that's, Zeus,
when they can start picking up
some of these adjacent markets through M&A.
>> And I think one of the challenges for them
is now that they're holding these exabytes of data,
they need to be able to tell customers
things the customer doesn't know, right?
And that's where a lot of the work
they're doing in artificial intelligence,
machine learning comes into play, right?
And nobody does that better than AWS, right?
AWS is always looking at your data
and telling you things you don't know,
which makes you buy more.
And so I think from a Veeam perspective,
they need to now take all this huge asset they have,
and find a way to monetize it.
And that's by revealing these key insights to customers
that the customers don't even know they have.
>> And they've got that monitoring layer.
It's you called it,
Dan, didn't like to use the term,
but he called it AI.
It's really machine learning that monitors,
and then I think makes recommendations.
I want to dig into that a little bit with it.
>> Well, you can see the platform story
starting to build here, right?
>> Here's a really good point. >> Yeah.
>> Because they really have been historically
a point product company.
This notion of super Cloud is really a platform play.
>> Right. And if you look in the software industry,
look across any segment of the software industry,
those companies that were niche
that became big became platforms;
Salesforce, SAP, Oracle, right?
And they find a way to allow others
to build on their platform.
You know, companies, do you think of like a Citrix,
they never did that. >> Yeah.
>> And they kind of taped, you know,
petered out at a certain level of growth
and had to, you know, change.
They're still changing their business model, in fact.
But I think that Veeam's at that inflection point, right?
They either build a platform story,
enable others to do more on their platform
or they stagnate
>> HP Software is another good example.
They never were able to get that platform.
They were not able
>> Just to bunch of spoken,
and I used to work there.
Why is it so important, Dave,
to have a platform over a product?
>> Well, Cynical Dave says you have a platform
because it attracts investment
and it makes you look cooler than maybe you really are,
but really for longevity,
you have to be a platform.
>> So what's the difference.
How do you know when you have platform versus?
Is it APIs? Is it- >> Yeah.
>> Is it ecosystem?
>> Some of it is semantics.
Look at when I'm worried about my critical assets,
my data, I think of a platform
a portfolio of point solutions,
for backing up edge data,
stuff that's in the Cloud, stuff that exists in SaaS.
I see that holistically.
And I think guys, you're doing enough.
This is good.
Don't dilute your efforts.
Just keep focusing on making sure
that you can backup my data wherever it lives,
and we'll both win together.
So whenever I hear a platform,
I get a little bit sketchy
>> Well platform beats products, doesn't it?
>> Yeah.
To me, it's the last word you said, ecosystem.
>> Yes.
>> When you think of the big platform players,
everybody in the customer experience space
build for Salesforce first.
If you're a small security vendor,
you build for Palo Alto first, right?
>> Right. >> If you're in the database,
you build for Oracle first.
And when you're that de facto platform,
you create an ecosystem around you
that you no longer have to fund and build yourself,
it just becomes self-fulfilling.
And that drives a level of stickiness
that can't be replicated through product.
>> Well, look at the ecosystem that these guys are forming.
I mean, it's clear. >> Yeah.
>> So are they becoming, in your view, a platform?
I think they are becoming a platform,
and I think that's one of the reasons
they brought Anand in.
I think he's got some good experience doing that.
You could argue that Ring kind of became that, right?
When he was- >> RingCentral, yeah.
>> Yeah. And so I think some of his experiences
and then moving into adjacencies,
I think is really the reason they brought him in
to lead this company to the next level.
>> Excellent.
Guys, thanks so much for setting up VeeamON 2022,
two days of coverage on theCube.
We're here at the Aria, it's a great venue.
>> I love the Aria.
>> Yeah. It's nice.
It's a nice intimate spot.
A lot of customers here.
Of course, there's going to be a big Veeam party,
they're famous for their parties.
But we'll be here to cover it.
And keep it right there,
we'll be back where the next segment,
you're watching theCube Veeam on 2022 from Las Vegas.
(gentle music)