Veeam’s Act II is an aggressive alignment with key transformation players

Arun Shankar
June 27, 2020 11:31 am

In January 2020, Insight Partners entered into a definitive agreement to acquire Veeam Software, a vendor in backup solutions that delivers cloud data management. Under the ownership of Insight Partners, Veeam has become a US company, with a US-based leadership team, while continuing its global expansion. The acquisition will enable Veeam to accelerate its Act II – Veeam’s evolution into hybrid cloud. As part of the acquisition, Bill Largent was elevated to Chief Executive Officer and Danny Allan to Chief Technology Officer.

Following an investment from Insight Partners at the beginning of 2019, Veeam has worked alongside Insight Partners’ business strategy and ScaleUp division, Insight Onsite, to expand its software-defined Veeam Cloud Data Management Platform. The company launched a number of new innovations in 2019, including Veeam Backup for Amazon Web Services, Veeam Backup for Microsoft Office 365 v4, Veeam Universal License and Veeam Backup for Microsoft Azure. At the core of Veeam’s strategy is flexibility and reliability. According to the IDC Software Tracker, Veeam has the lead market-share in EMEA and #4 worldwide, after DellEMC, Veritas and IBM.

Veeam operates in delivering backup solutions that enable cloud data management, and has recently launched cloud-native solutions that will enable customers to orchestrate data across AWS and Microsoft Azure environments – core elements of its Act II. In a world where a business’s most valuable asset, its data, is constantly on the move and being created at unprecedented rates, data management has never been more critical, and more complex.

Legacy solutions cannot keep up. Veeam’s software provides holistic coverage for the modern business. A major focus has been the criticality of data to business success as customers undergo rapid digital transformation. 44% of global enterprises are being hindered in their digital transformation journeys due to unreliable, legacy technologies, according to the Veeam 2020 Data Protection Trends Report.

Act I to Act II

For Veeam, moving from Act I to Act II is about the transformation it is going through. When Veeam started in 2006, it was about VMware, VMware virtualisation and later HyperV. Act II is more about building a single platform for cloud, virtual and physical. Act II essentially builds an end to end solution for the modern virtual data centre. Veeam is now moving from VMware deployments and pure backup and recovery to reducing risk and helping to accelerate digital transformation in its customer base.

As part of Act II, Veeam is also expanding the scope of its business from the channel. Other than its value-added resellers and other channel partners, Veeam plans to leverage on its OEM relationships and alliances. This includes HP, NetApp, and Cisco, amongst others. Act II also involves the transition from socket licensing, followed by VMware, to user and licensing portability.

As part of Act II, CEO Bill Largent, also points to the changes with the Veeam founders as being significant, having closely worked with the founder team since 2001. Following the closure of the acquisition by Insight Partners, in January 2020, Co-Founders Andrei Baronov and Ratmir Timashev stepped down from the Veeam Board. “It is really a transformation of their day to day activity out of the business to consulting activity for the next 12 to 18 months as they transition their roles,” reflects Largent.

The focus is all about helping customers navigate their move to hybrid-multi-cloud for data protection and how organisations are looking to embrace new data management models for on-prem, hybrid and multi-cloud. Since the start of 2020, Veeam has reported annual recurring revenue increase of 21% year-over-year for Q1 2020 and that it is experiencing success in market adoption of its subscription offering, Veeam Universal License, reporting 97% YoY increase in bookings across more than 375,000 customers.

In the most recent IDC Semi-Annual Software Tracker for Data Replication & Protection 2H 2019, Veeam had the fastest revenue growth, both sequentially, 9.8% and year-over-year, 20.5%, outpacing the overall market average by 3x. Veeam recently launched a solution for data management and protection for hybrid-cloud environments – Veeam Availability Suite, VAS v10. With more than 150 new features and enhancements – including modern NAS support, Multi-VM Instant Recovery and heightened ransomware protection – unique downloads of VAS v10 have already exceeded 200,000 since general availability.

Digital transformation 2021

In the months ahead, Veeam expects to improve its relationships with the global hyperscalers. “They need a lot of maturing,” says Largent. To make this happen, Veeam is doubling the size of its research teams and co-founder Andrei Baronov is driving the innovation here, according to Largent. Veeam is also expanding the list of its cloud service providers, which now amounts to 25,000+.

Veeam’s latest SaaS offering that it has built around Microsoft Office 365 is also one of Largent’s hot spots for 2021. “This SaaS offering, which we have not had historically, has been our fastest growing single feature product offering, we think because there is hundreds of millions of users out there using licenses for Office 365,” he explains. The runaway growth around Veeam Backup for Microsoft Office 365, means that the vendor is almost running it as a separate business line. “But we really don’t do that, the way you might think of other entities doing that,” Largent point out.

On software development, Veeam is deeply into cloud strategy with Founder Andrei Baronov driving the innovation, along with other key architects.

Another important Veeam development that Largent expects will drive digital transformation is its licensing portability. “We started that change a little bit ago. So that is a big piece of our digital transformation. You can take that license with you in the cloud, on-premises, or the hybrid cloud. We believe that is a significant step for us, how we have done the licensing,” he explains.

While cloud and hyperscale is a key focus area for Veeam’s growth and innovation, Largent also stresses that the vendor is not refocusing. “Our core business is backup and recovery and that still drives innovation coming along, that moves us further into the enterprise world,” he points out.

Vendors, alliances, partners

Largent regards Veeam’s vendor alliances and relationships as important with HPE, NetApp and Cisco leading the pack. “We are working with probably 30-40 different storage platforms and have those kinds of relationships. We have also expanded into Kubernetes and other areas with some of the different software vendors.”

Veeam has emphasised its partnership with Kasten over the last 12 months, the leader in backup solutions for containerised workloads, using its K10 Data Management Platform, purpose-built for Kubernetes, providing enterprise operations teams easy-to-use, scalable, and secure system for Kubernetes backup and application mobility. “Kasten is a new one for us over the last 12 months now and we believe that containers need to be there. We think that is still out several years – two years before heavier deployment,” he explains.

While Kubernetes takes away the pain of ensuring high availability and scalability of application services, these benefits do not extend to data, making data management of Kubernetes applications a critical priority. Kubernetes-based environments are fundamentally different from those based on earlier technologies and accordingly, require a different approach to backup, one that Veeam describes as a Kubernetes-native backup.

On the channel and sales activities, Veeam continues to focus on commercial markets with 500 to 5,000 employees, and enterprise markets with above 5,000 employees. Till date, Veaam has not experienced delays in payment collections through the channel. “We have not seen that yet, does not mean it will not happen, because we are now you know, only 60-90-100 plus days into it. We have not seen significant issues,” points out Largent.

While across US, Australia, New Zealand, Veeam sees much more of push to the cloud; across Europe, Middle East and Africa, EMEA the move to the cloud is less aggressive. However, order sizes are larger from across EMEA and Asia Pacific. Largent emphasises that going forward, partners must realise that it is going to be a hybrid cloud world – with on-premises, off-premises, private and public cloud. “That is what we have seen so far,” he indicates.

Moving forward

Following the closure of the acquisition by Insight Partners in January 2020, Veeam co-Founders Andrei Baronov and Ratmir Timashev have stepped down from the Veeam Board. Veeam’s CEO Largent, points to the transition ahead of moving from a Founder led business to one driven around P-E. Across the years from 2001, the Founders and Largent have managed the double-digit growth of the global company, focusing and frequently repositioning in the market at the same time. According to Largent, while the team will remain the same, the Founders will move to a less prominent position. “So, we have kind of handled things, the three of us, I would say, on a communal basis, have done our own thing.”

Largent says it is his style to pick up the phone and talk to vendor alliance partners directly, in the normal course of operations. “Because I am pretty direct and open, it is always good to make sure you get good facts and always good to hear some things firsthand. But in the last three months since I have taken responsibility, my whole focus has been on the internal transition.”

Largent’s role historically, starting in October of last year, was all about deal closing, getting sales accomplished, talking to customers, as well as vendors in the Veeam partner community. All that changed when Largent moved into the CEO role in January this year, where he is now steering Veeam through the turbulent months ahead and into 2021.

Veeam CEO, Bill Largent.

Key takeaways

  • In a world where a business’s most valuable asset is constantly on the move, data management has never been more critical.
  • Legacy solutions cannot keep up, Veeam’s software provides holistic coverage for the modern business.
  • A major focus has been criticality of data to business success as customers undergo rapid digital transformation.
  • 44% of enterprises are being hindered in their transformation due to legacy technologies.
  • For Veeam, moving from Act I to Act II is about the transformation it is going through.
  • In the months ahead, Veeam expects to improve its relationships with the global hyperscalers.
  • Veeam is deeply into cloud strategy with Founder Andrei Baronov driving the innovation.
  • Largent regards Veeam’s vendor alliances and relationships as important with HPE, NetApp, Cisco leading.
  • Kasten is a new one for Veeam over the last 12 months and Veeam believes containers need to be there.
  • Kubernetes takes away pain of high availability and scalability but these benefits do not extend to data.
  • Data management of Kubernetes applications is a critical priority.
  • Veeam’s latest SaaS offering built around Microsoft Office 365 is also one of Largent’s hot spots for 2021.

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