Veeam Software is among the most successful private storage companies with tens of thousands of customers and close...
to $300 million in bookings last year.
The virtual backup specialist claimed more than 100,000 total customers and $277 million in revenue bookings in 2013. After starting out selling to SMBs running VMware, the vendor has moved up to larger customers and added support for Microsoft Hyper-V to expand its base.
SearchDataBackup spoke with Veeam CEO and founder Ratmir Timashev about how data center backup is changing, about Veeam's relationship with VMware, and whether the vendor plans to add physical backup and pursue an intial public offering (IPO).
Veeam's new marketing message claims backup is sexy, and a key piece of the modern data center. What role does backup play in that modern data center?
Ratmir Timashev: Backup has always been boring, but we believe business requirements have changed dramatically in the last five or six years. These days, people need access to information from any device, from any place, 24-7. We believe the old technologies and old data centers cannot possibly meet these requirements. That's why most businesses are building modern data centers. People need 'always-on' business, and Veeam enables always-on business.
The modern data center is built on new virtual technologies, new storage technologies and new cloud technologies. Always-on is a new protection layer on top of these.
Because Veeam is a young company, we fully leverage this new modern technology and provide this critical layer. We say we provide recovery time and point objectives -- RTPO -- in less than 15 minutes.
People still stand up legacy backup that provides protection for older workloads, but they cannot provide the RTPO required by modern business. Or they have to use their high-availability technology that is only used for 5% of applications because they are very expensive. We extend this 5% to 100%, and reduce RTPO from days to 15 minutes.
What do you see as the biggest headache for backup admins?
Timashev: The biggest headache is data is growing an average of 30% to 50% annually. At the same time, expectations from business owners have grown dramatically as well, and there is a major gap between expectations and what IT can deliver. On a technology level, you want to recover an application within 15 minutes with data loss of less than 15 minutes. That's why we say RTPO in less than 15 minutes.
Which of your features enable shorter RTPOs?
Timashev: We use different technologies. When we came out with version 1 of our data protection six years ago, we had replication. We call our product Backup and Replication. We realized replication has to combine with backup to achieve a very small RPO. Then we built on that. In later versions, we introduced what's known today as instant VM [virtual machine] recovery, and then we extended the concept of backup to data management by introducing a virtual lab where you can use backups to build [a] virtual replica of environments for testing.
Now we're using storage snapshots. We are not the first. CommVault pioneered this idea a few years ago. We're taking this idea to the next level by providing much better use of storage snapshots for backups and recovery.
Do you do continuous data protection (CDP)?
Timashev: We have near-CDP; it's not CDP in the traditional sense. It doesn't provide immediate, instant continuous protection. It provides 15 minutes' continuous protection. It's much less expensive for licensing and maintenance and hardware requirements. It's affordable for all customers.
In the legacy data center, you provide CDP, but for only 3% to 5% of applications -- the most critical applications. We manage the other 95% of our data center. That's the difference between us and classical legacy vendors.
How are your customers using the cloud for backup and disaster recovery (DR)?
Timashev: Small customers are starting to use the cloud for their backups. Some customers are starting to experiment with DR in the cloud or archiving in the cloud.
But unlike some of our competitors, we are not offering our own cloud for backup or DR. We have service partners building solutions based on our technology. Until recently, we didn't offer all the features our service provider partners provided. With version 8 – [which] we will be announcing May 20 -- one of the major features would be a new framework to make our product much easier to use for service providers. I can't get into specifics yet.
Do you have any plans for endpoint backup?
Timashev: Today we don't provide any endpoint backup. Endpoint mostly deals with physical laptops. [Small- and medium-sized businesses] SMBs say, 'I need to back up my CEO's laptop.' That's what we hear from our SMB customers. We will be addressing that, but it's too early to announce something like that now.
Veeam made its reputation for doing virtual backups. Do your customers ask you to back up their physical servers, too?
Timashev: We have more than 100,000 customers and every one of them uses something else for physical or endpoint backup. Every single one of those customers decided to go with Veeam for the virtual part of their data center, or what we call the modern part of their data center. We understand that we must address all their needs because that's what our customers want.
Our customers say, 'Veeam, when can you provide physical backup? I'm tired of using two solutions, I prefer to use Veeam for everything.'
Does that mean you're planning to add physical server backup?
Timashev: That might happen. I'm not saying anything more because it's too early for us to say anything.
You started out as backup for VMware, and added Microsoft Hyper-V support two years ago. Are you seeing a lot of Hyper-V adoption?
Timashev: Last year, approximately 7% of our revenue came from Hyper-V, but it was closer to 15% of our total customers because Hyper-V customers tend to be smaller. This year, we expect to see around 11% or 12% of our revenue closer to 25% of our new customers from Hyper-V.
Customers who had not virtualized on VMware because it is expensive, these customers are now virtualizing on Hyper-V. We're also seeing a little bit of mixed customers that use VMware and Hyper-V and they buy our licenses for both.
We did about $277 million in revenue bookings last year, and our plan for this year is $375 million. VMware is growing about 20% and Hyper-V grew about 250% last year. We expect Hyper-V to grow about 150% this year.
There was a stir in February when VMware did not allow Veeam to take part at its Partner Exchange (PEX) event. How is your relationship with VMware these days?
Timashev: Actually, the relationship is coming back. It's still very strong. We were disinvited [from] this particular event, but they immediately confirmed our participation in VMworld because they view VMworld as an industry event, not only a partner event. Partner Exchange is their internal sales event, and they felt a little bit competitive. I think somebody inside VMware made that decision, and I have a feeling that will not happen next year. We're having more interaction with VMware, and something interesting may come around Veeam and EMC in the near future.
Something with Veeam and EMC?
Timashev: Yes, Veeam and EMC.
You had $277 million in bookings last year, and you don't have any venture funding. That means you must be profitable.
Timashev: We are very profitable. We did over a quarter million in bookings, and our goal is over $370M this year.
Are you considering an IPO to become a public company?
Timashev: We have no plans for an IPO in the next three years. We don't see the reason for an IPO. The trend now is to go from a public company to [a] private company.