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Veeam roadmap features cloud focus, possible IPO

Analysts noted more of a backup emphasis at VeeamON 2019, as Veeam plans to tackle the hybrid cloud market. Will acquisitions be part of the Veeam strategy?

Veeam Software is eyeing its second act.

Product-wise, the Veeam roadmap includes a focus on cloud. Business-wise, the company has started to explore the possibility of going public.

"Successful technology companies always have an Act 2," Ratmir Timashev, Veeam's co-founder and executive vice president, said at last month's VeeamON 2019 user conference.

To be private or public, that is the question

Previously, Veeam executives said the company had no plans for an initial public offering. For the first time, though, Timashev said at VeeamON that company leadership is starting to think about it.

Going public might accelerate Veeam's growth, Timashev said. Then again, it might not.

Ratmir Timashev, co-founder, VeeamRatmir Timashev

Public companies have limitations, such as less flexibility, and are driven by quarterly earnings, Timashev said. On the other hand, they also have more brand awareness and credibility in the market, especially with large enterprise customers, he said.

Timashev said Veeam has been profitable since 2009 and recently hit a longtime goal of $1 billion in annual bookings revenue.

"It's hard to be a billion-dollar company and be private these days," said George Crump, founder and president of IT analysis firm Storage Switzerland. Veeam may have to go public to retain and attract talent, he said.

Andrew Smith, research manager at IDC, said he always expected Veeam to stay private. He said there are benefits to remaining private -- for example, having more agility.

Eyes on the cloud

VeeamON featured a switch in messaging for the data protection vendor. Veeam now refers to its products as "backup solutions that deliver cloud data management." At VeeamON 2018, the strategy and vision was "intelligent data management for the hyper-available enterprise," itself a shift from the previous "availability for the always-on enterprise" platform.

"Act 2 is all about hybrid cloud," Timashev said of the Veeam roadmap. "This is the next stage of our evolution."

Timashev said Veeam is "extremely well-positioned to dominate this market," citing its install base, position in the private cloud, technology and partners.

The hybrid cloud and multi-cloud data management problem is real for IT, said Krista Macomber, senior analyst at Storage Switzerland.

"Data needs to live on a variety of different infrastructures," and it needs to be accessible, Macomber said.

Analysts noted a renewed emphasis on backup and a shift away from the enterprise focus of recent years under former CEO Peter McKay, who left in October 2018. Timashev's co-founder, Andrei Baronov, became the lone Veeam CEO after McKay's departure and remains more behind-the-scenes than Timashev.

IDC's Smith said starting from a backup point of view with the ability to build out from there leaves an opportunity for partners.

And partners are an important piece of Veeam strategy. The company claims 64,000 channel partners and 22,500 cloud and service providers. Unlike most other prominent backup software vendors, Veeam does not integrate its software on branded hardware appliances.

It does work closely with hardware vendors, however, including Cisco, Hewlett Packard Enterprise, NetApp and Lenovo. In addition, its new "with Veeam" program, featuring partnerships with ExaGrid and Nutanix, combines Veeam's software with other vendors' hardware and management stacks.

"The message was simplified," Smith said.

Jeff Martinson, IT director at Ameritas, based in Lincoln, Neb., said when he searched for a new backup system a couple of years ago, he liked that Veeam was simple and easy to use and required less effort to manage.

"Simplicity equates to cost-effectiveness" for cost and resources, Martinson said.

In addition, he said he liked Veeam's stability in the market and its effort to continually evolve the product line.

Macomber pointed out that the Veeam roadmap goes beyond backup, with orchestration and migration capabilities.

At the conference, Veeam launched the second edition of its Availability Orchestrator, which orchestrates recovery from backups, in addition to replicas. It also includes the ability to set recovery time objectives and recovery point objectives, automate testing and deliver documentation about whether an organization is meeting its objectives.

The new Availability Orchestrator sets Veeam up for a new level of how to use data -- for example, in automation and migration, said Christophe Bertrand, senior analyst at Enterprise Strategy Group in Milford, Mass.

Are acquisitions on the Veeam roadmap?

Recently infused with $500 million in funding from Insight Venture Partners, Veeam looked primed to make an acquisition announcement at VeeamON. In February, Timashev said Veeam had just signed a term sheet with one company and was looking at complementary areas, such as open source, machine learning, artificial intelligence and data governance, as potential acquisition targets.

In an interview at VeeamON, though, Timashev said there is no update on a possible acquisition, and the company is putting a focus on internal research and development -- for example, in containers.

Smith, of IDC, said he was surprised Veeam didn't announce an acquisition, especially given the massive funding round.

Successful technology companies always have an Act 2.
Ratmir TimashevCo-founder and executive vice president, Veeam

"They're being very strategic about what to do with that money," Smith said. "They're taking the time to do their homework."

Smith also noted that the company is still doing well from a revenue standpoint. Following the first quarter of 2019, Veeam reported a 16% increase in total bookings year over year. Veeam claims 350,000 customers and is adding about 4,000 each month.

Smith said Veeam still needs backup and recovery for emerging workloads, such as containers, as well as NoSQL databases. Competitors Rubrik and Cohesity both made recent acquisitions in NoSQL protection.

Veeam's last acquisition was of AWS backup and recovery vendor N2WS in late 2017. Since its founding in 2006, Veeam's only other acquisition was of Nworks, a creator of enterprise management connectors, in 2008.

Ken Ringdahl, vice president of global alliance architecture, said founders Baronov and Timashev have declined acquisition ideas because they were outside of Veeam's core platform.

The Veeam roadmap also includes the long-awaited version 10 of its flagship Availability Suite product, which is set to feature NAS support and is due to launch by the end of 2019.

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