Backup vendor Veeam gets an equity stake from Microsoft

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Veeam and Microsoft signed a five-year strategic partnership deal in February 2024 that added cybersecurity and resiliency capabilities for Microsoft 365 and Microsoft Azure in the new Veeam Data Cloud.

According to Eswaran, this expanded partnership will now include jointly developed offerings from the two companies that use Microsoft AI services. These AI additions will be available in Veeam Data Cloud for Microsoft 365, a Microsoft 365 SaaS backup platform; Veeam Data Cloud Vault, a cloud off-site backup service; and a new offering to protect Entra ID, the Azure identity management platform.

However, Veeam did not specify exactly how Microsoft's AI capabilities will be implemented. Customers should expect suspicious activity detection, recovery automation, and other services associated with machine learning (ML), Eswaran said.

Future developments would likely expand this protection into more generative AI and agentic AI protection services as well, Eswaran said. This includes protecting large langue model (LLM) data, a core component of AI creation.

Although other data backup vendors have begun offering GenAI tools and capabilities in their products over the last few years, Veeam has taken a more muted approach towards AI, said Krista Case, an analyst at The Futurum Group.

These implementations, such as using ML for threat detection or improper access notices, are common ways data backup companies have integrated AI in the past, she said. It's also a sign that Veeam is trying to avoid "AI washing," where any new release promises AI capabilities.

"They haven't been jumping on the AI bandwagon as much as other companies," Case said. "They're trying to be mindful of not AI washing everything."

Veeam remains one of the largest data protection vendors in the market by revenue, even after the merger of Cohesity and Veritas last year, Yu said. The overall data protection market, especially for SaaS data, still has significant room to grow as organizations continue to expand operations in the cloud, he said.

"There's no indication they've captured the entire market," he said. "There are organizations that don't realize they need third-party data protection for SaaS products."

Road ahead

The next major innovation in data protection platforms looking to implement AI will come from agentic AI, said Christophe Bertrand, an analyst at TheCube Research. These platforms will need to protect not only the data itself, but also the associated processes and dependencies.

Veeam and Microsoft are likely developing these sorts of offerings over time, he said.

"Data protection solutions are leveraging AI to create agentic AI processes, that's going to be the play here going forward," Bertrand said. "You're seeing a natural evolution of Veeam to capitalize on that investment."

Despite the partnership and technology sharing, Case agrees that Microsoft sees greater value in keeping Veeam at arm's length rather than acquiring it. Microsoft already offers some native backup capabilities for Microsoft 365, but the company wouldn't want to take on the full responsibility of a data backup vendor, she said.

"I would be surprised if Microsoft would try and compete with a fully heterogeneous backup service," Case said.

Tim McCarthy is a news writer for Informa TechTarget covering cloud and data storage.