In this Q&A, Veeam co-founder Ratmir Timashev details how close the well-funded company is to making an acquisition, and what's to come for its products in a competitive market.
Veeam Software co-founder Ratmir Timashev said the vendor has delivered 80% of its long-ago promised version 10 of its flagship Availability Suite. NAS support and continuous data protection are still on the drawing board of the Veeam roadmap, and Timashev vows to launch those in 2019.
Timashev, Veeam's former CEO and current leader of sales and marketing, said Veeam made a "slight mistake" in promising version 10 two years ago, but added that much of the promised feature set has been delivered through updates to version 9.5.
In a recent interview with SearchDataBackup, Timashev discussed the Veeam roadmap including and beyond version 10, as well as acquisition plans for 2019. The data backup, recovery and management vendor is fresh off a $500 million investment from Insight Venture Partners in January, bringing its total cash on hand to more than $1 billion. Also in January, Veeam launched Update 4 of Availability Suite 9.5, which included cloud tiering and migration capabilities.
Ratmir Timashev
In addition, Timashev described a current "war" to win the hybrid cloud and multi-cloud market, one that could set the tone in the data protection field for years to come.
All this follows a year in which Veeam shifted its platform and its management team. The vendor outlined an approach for what it calls "intelligent data management," and is continuing in the direction of providing more than just backup and recovery. In late 2018, co-CEO Peter McKay left the company, leaving Timashev's co-founder Andrei Baronov as the CEO. Timashev became executive vice president of worldwide sales and marketing.
In the Q&A that follows, find out more about the Veeam roadmap: the possible technology acquisition areas, why winning the hybrid cloud battle is important, and what's to come from Version 10.
What's on the Veeam roadmap for Availability Suite? Will there be a version 10 soon? And what will it entail?
Ratmir Timashev: Yes, this year [we'll launch] version 10.
Normally our company has a strategy -- under-promise, over-deliver. We made a slight mistake almost two years ago when we announced version 10 and we still haven't delivered it. We will deliver it this year. We delivered already 80% of the features we promised and we delivered much more in the last two years.
Why over-promising two years ago [was a mistake], is because we're a private company. We're not quarterly driven and we're not this corporate bureaucratic company that has a two-year product roadmap. We have a roadmap but our roadmap is so fluid and flexible that we change it, depending, every three months [or] every month.
The fact that we're a private company, that's our key competitive differentiator. We can change our strategy.
Big companies have a two-year roadmap that's approved by the board of directors and they cannot change much. We don't have that. So yes, we made the mistake -- we over-promised two years ago. But we delivered 80% with Update 1, Update 2, Update 3 and now with Update 4. We intentionally don't change the version number until we deliver everything that we promised two years ago. Update 4 deserves to be version 10 by the sheer number of features and powerful capabilities.
There are two things we still haven't delivered [that Version 10 will include], but we delivered much, much, much more already with Update 1, Update 2, Update 3, Update 4.
What are those two things?
Timashev: NAS support -- that's 90% of what we're still missing. And it will be delivered this year.
Right now we have replication, which provides five-minute CDP. It's near-CDP. Not continuous, not seconds. We provided near-CDP since our version 1 when we released it in 2008.
In the physical world, even Gartner still has backup and replication as two separate markets. Veeam was the first company that combined backup and replication in one product because it's one technology. In the virtualization world, it's one technology. In physical, those are two.
That's why our product since Version 1 is called Veeam Backup & Replication. We intentionally emphasize that it's not just backup.
What are customers looking for now?
Timashev: Every 10 years, there is a major industry shift. From mainframe to Unix, from Unix to Windows, from Windows to cloud, from Windows to VMware. Veeam 12 years ago won this [virtual] market. When the new market or the new platform comes, there are only two or three years of a window of opportunity. When VMware came, Veeam won this market within two or three years and has dominated it for the last 10 years.
Now there is a new shift. It's called hybrid cloud or multi-cloud. And the war is right now. Whoever wins it is going to dominate it for the next seven to 10 years.
Ratmir Timashevco-founder and executive vice president, Veeam
Now there is a new shift. It's called hybrid cloud or multi-cloud. And the war is right now. Whoever wins it is going to dominate it for the next seven to 10 years. Normally, the winner takes 40% of the market. So right now we're in the middle of that. Veeam is extremely well-positioned with our channel partners, with our product.
We still have challenges. Only the paranoid survive. The war is right now. We have to win the hybrid cloud. Hybrid cloud is about data management. Not only backup, but backup is the most important in the hybrid cloud. But also data governance, data security, data mobility, avoiding cloud lock-in. Because AWS wants to lock you in and wants to consume you more and more, and doesn't make it easy to take the data out. Veeam provides all of this freedom.
Veeam has a lot of cash on hand. What can you do to ensure your customers and partners that you're spending it wisely?
Timashev: Big companies have big cash reserves, like Microsoft, Apple. First, it makes our customers very comfortable doing business, especially large customers, making large investments, unlike some of our competitors who are burning money. We have money, so it just provides extra confidence to some of our larger customers that Veeam is a long-term sustainable partner.
Second, it provides a lot of flexibility in terms of our strategic decision-making, in terms of products.
Third, it gives us a lot of flexibility in terms of mergers and acquisitions. Now we're going to accelerate and that's one of the reasons to partner closely with Insight Venture Partners. Insight is a very unique firm. They transformed from being venture capitalists to being more private equity in the last 10 years. They're not as big as maybe Vista [Equity Partners] or Thoma Bravo or Silver Lake, but they're a very good midsize private equity firm.
They're technically still a minority investor in Veeam, correct?
Timashev: Yes, totally minority: [Veeam] is owned by the founders and the executive management team. So they cannot force us to sell the company or go IPO. So we still have the total freedom, unlike [some of] our competitors, where the founders probably still own 10% to 20% and [venture capital firms] own the rest.
Are you close to making an acquisition at this point? Is there a timetable in the Veeam roadmap for buying any companies?
Timashev: We just signed the term sheet with one company [a few weeks ago]. And we're talking to other companies. It doesn't mean anything -- we might not do anything. But it's all in the areas where we know or we think are going to be big partners in the next five to seven years or in the next two or three years. Like open source, OpenStack, KVM, Kubernetes, machine learning, artificial intelligence, cloud optimization, cloud management, data governance, data security -- [areas that are] complementary that extend our addressable market and provide the additional value proposition to our platform.
We are working internally on all these areas. But the research and development bandwidth is limited, so we have to select priorities for buying in some other areas.
N2WS [which Veeam acquired in late 2017] is a good example of how we would like to make an investment. It was a small company, but they are the leaders in AWS backup. Still a small company, they are around $10 million in revenue, but they are doubling every year. So $10 million annual recurring revenue, that's a huge business.
Some [technologies] we're trying to develop inside, like [Backup for] Office 365. Office 365 is the fastest growing product for us.
Ratmir Timashev
