Veeam is now number two in the data protection space, but they have a focused strategy to get to the top spot by 2023.
Veeam’s virtualized VeeamON event this week provided the expected combination of new product announcements and recounting of recent trumps, with the latter being somewhat more prominent this year because two huge product announcements – Backup and Replication v11 and Kasten K10 v4.0 – both came out before the event, the former in late February and the latter a month ago. The company was, however, quite explicit about its strategic goal, rising from second to first in backup over the next two years, which means knocking Dell out of the top spot. They also talked quite a bit about how they plan to do that.
Danny Allan, Veeam’s CTO and SVP Product Strategy, noted that since last year’s VeeamON event, the company has had 17 product releases, as they expand the number of discrete solutions they offer around specific products.
“That’s the fastest pace in our history,” he said. “At VeeamON, we talked about four new products coming out in the near term – three of them around the cloud – plus the new version of our Office 365 product.”
All of these specific releases are tied to the preference for release cycle of the target audience.
“We match the native solution to the environment that we are protecting,” Allan said. Kasten releases every two weeks, because the people who buy it are developers, and are used to that cycle. We do two releases a year on our core [Backup and Virtualization] platform – one major release in Q1 and one half way in Q3. That’s good for most of its customers, but we have a large chip maker who wants one release every two years. They want stability and a release every six months is too fast for them.”
Adoption of third-party solutions to protect Microsoft 365 data has been slow, with IDC putting the number still under 30%, but Allan sees a big change coming there.
“Because of the pandemic, a lot more dependence on OneDrive than on traditional file systems has become the norm,” he said. “Protecting OneDrive has reached the same level of priority as protecting NAS systems. The second factor has been the rise of Microsoft Teams. The result has been that the pandemic drove the criticality of Microsoft 365 data close to the top of customers’ priority lists. In Q1, we saw a 156% year-over-year growth in protection of One Drive users. Now we know third party protection for Microsoft 365 will never reach 100%, but we believe these trends indicate it will soon hit a hockey stick growth trend, and go over the tipping point of 50%.”
Allan also emphasized the importance of the announcement at VeeamON of support for a fourth hypervisor, with Red Hat Virtualization [RHV] now joining VMware, Microsoft and Nutanix. He said that while its overall share is low, RHV is quite important in specific cases and geos.
“It plays in areas like telco and managed cloud providers, and we see it a lot in the channel for managed cloud service providers,” Allan said. “It also tends to be big in the APJ region.”
Support for RHV will be available in the summer of 2021.
Allan emphasized that while containers are still in relatively early days, they will be central to the next big decade of transformation, because they are designed for consumption economics, and can be provisioned and deprovisioned in real time, which fits the cloud model ideally. That’s why the acquisition of Kasten was so important for the company.
“I do believe that containers offer a better infrastructure model for the market as they are designed for portability and a consumption economics model,” he said. “While we are in early years and full adoption will take time, Veeam has an unfair advantage to win the backup of Kubernetes. We focus on the application as the unit of measure, with a natively optimized solution, and deep understanding of modern data protection requirements and management. Capabilities such as instant recovery, migration, granular recovery, tiering of data, immutability are all challenging aspects of a complete solution that are included in a highly differentiated Veeam platform. The broader vision is that Kubernetes is just one component of a more complete modern data protection platform.”
Looking ahead as CTO, Allan identified three key strategic priorities for Veeam.
One is to continue their focus on the enterprise segment, which has been a target of emphasis over the last half-dozen years as Veeam has moved well beyond its original SMB base.
“While over 50% of our revenue comes from the enterprise segment, we continue to believe that there is room for growth and market penetration,” Allan said.
A second priority is establishing what he termed Act II Leadership.
“With the emergence of hybrid cloud and an increasing number of workloads in Kubernetes and moving into the hyper-scalers, we need to ensure that Veeam enables the same simplicity and reliability that provides an unfair market advantage for cloud-hosted (i.e. IaaS) and cloud-native (i.e. containers) workloads,” he stressed.
Finally, Allan said Veeam needs to accelerate growth and market share.
“While Veeam is currently #2 in market share according to IDC, I believe we have an opportunity to displace the incumbent and to take the market leadership position in total revenue by 2023,” he stated. “This requires an outperformance of the market with all the core products including VBR, VAS, and VBO.”
It also requires expanding workload support to additional areas where Veeam is not present today.
“There are clearly additional opportunities in the SaaS space with backup of additional services, and there are opportunities in the cloud with the protection of additional PaaS services for the cloud providers,” Allan noted.