Deepening enterprise penetration, increasing cloud business, and improving attach rate on partner VMware and Microsoft sales are at the top of Veeam’s agenda for this year.

LAS VEGAS – Veeam CEO Ratmir Timashev took the stage at the Partner Day keynote at the start of the VeeamON event here, and laid out the company’s strategy for continued success in the year going forward. That strategy has three components, one of which is ongoing from the past, but two of which are new for 2016.

Let’s start with the shiny new stuff. Timashev told partners that while Veeam’s focus in the past has been mainly on the SMB and the midmarket, and that they have been identified with those markets, they want to deepen their enterprise penetration and be identified with the enterprise in the same way.

“Veeam has built a great business in the mid-size and SMB markets based on high volume transactions,” he said. “We want to be the de facto enterprise standard as well and work closely with you to achieve those results in the enterprise.”

Veeam does have a presence in the enterprise already. Timashev indicated that today 50 per cent of Veeam’s business is SMB – really the M part of the SMB, since small business very seldom uses VMware. 35 per cent of the business is midmarket and small enterprise, and 15 per cent is large enterprise.

“We started moving into enterprise in the last two or three years, so selling to the enterprise itself is not new, but what is new is that we now have a focused effort for channel partners that specifically focuses on enterprise customers, and we did not have this focus before,” Timashev said. “For example, we have identified partners in Canada that are selling to the top companies in Canada, and targeting them to focus on us because of our unique value proposition and our integration with major vendor partners Cisco, HP, NetApp and EMC, who represent 80-90 per cent of the storage market.”

Timashev said the major challenge with the enterprise push is doing it effectively while not losing focus on the SMB and midmarket companies that built up their business in the first place.

“We have to add enterprise focus on the large enterprise in sales, marketing and channel programs, without destroying our good foundation,” he said. “We believe we have crossed the chasm [referring to Geoffrey Moore’s work on technology marketing] in the SMB and the mid-enterprise, but we still have to cross it in the large enterprise.”

The scalability of Veeam’s technology itself to larger enterprises isn’t an issue, said Marshawn McLeod, a senior Windows systems engineer responsible for virtual systems at Cox Enterprises, which has responsibility for the entire Cox group of companies, of which Cox Communications is the best known. McLeod said that Veeam had won a four vendor competition, displacing vRanger, which at that time was owned by Quest.

“Veeam easily backs up 50 petabyes of data for us in an eight hour window,” McLeod said.

The second element of Veeam’s strategy going forward is to deepen its cloud penetration, which means getting more of its partners to deepen their own investment in the cloud.

“The cloud has grown 50 per cent in the last year compared to a few per cent for on-prem,” Timashev told partners. “You need to have more cloud services and Veeam is here to help you. Disaster recovery in the cloud is becoming one of the top use cases, and is forecast to grow from a $1.5 billion market now to 12 billion in 2020. Veeam Cloud Connect v9 adds the foundation for DRaaS [Disaster-recovery-as-a- service]. We and our partners are going to define this market.”

At the same time, Timashev acknowledged they have a way to go to get more partners into this business. Veeam today has about 34,500 partners, of which about 10,000 also provide services. While that’s not a perfect correlation with the number of partners in the cloud today, it’s close enough, in an industry which is still evolving and where definitions are not clear. Most, however, are not fully in the cloud with Veeam.

“Out of this 10,000, 9000 don’t even use our CloudConnect platform yet, because it was only released 12 months ago,” Timashev said.

Timashev said that he does expect that Veeam Managed Backup Portal for Service Providers, which was also introduced on the first day of the event, will encourage more partners to move into the cloud.

“Veeam Managed Backup Portal for Service Providers is designed for partners to start opening additional backup and disaster recovery services,” he said. “It deploys easily, handling billing and monitoring through a multi-tenant portal.”

The third component of the strategy, improving the attach rate for Veeam on enterprise sales, is not new, but Veeam is now making an increased push there.

“While the first two elements of our strategy are definitely new, the third one has been going on for quite some time,” Timashev said. “We have always told salespeople we need to be attached to every VMware and Microsoft server deal, and that they need to include us in their quote. Our margins are already very rich, so it’s all about winning the hearts and minds of channel people.”

The challenge, he acknowledged, is that all their competitors are telling partners the same thing.

“The problem is the ecosystem is so broad, and partners have so many vendors to deal with,” he said. “They all tell the channel, ‘attach us to VMware.’”

Mike Vencel, executive vice president at New Jersey-based Veeam partner Comport, said that they had been pushing strongly to improve their Veeam attach rate.

“Of our net new customers, 30 per cent had a Veeam component in that initial sale,” he said. “It has become an essential part of how we go to market.” Still, in a market where a 30 per cent attach rate is impressive, there remains a lot of unrealized potential.

“Veeam owns 25 per cent of VMware sockets, but that means there is 75 per cent we don’t have,” Timashev said.

Even so, in a backup market in which IDC tracks over 20 vendors in North America, with about the same number not being individually tracked, Timashev thinks Veeam is in a very strong position.

“Gartners says we are number five in market share, but in terms of new licenses, not the install base, I think we are number one,” he said.