Veeam Goes Hard After The Enterprise

17 May 2017
Justin Warren

Veeam, a backup software company famous for its bright green corporate colors and its easy-to-use software for backing up virtual machines, has emphatically signalled its intention to take market share from incumbent enterprise backup vendors.

At the company’s VeeamON conference in New Orleans, Louisiana this week, the company showed off its newly minted co-CEO Peter McKay as well as an array of executives from enterprise partners. McKay came to Veeam from VMware, one of several major enterprise partners paraded in front of attendees to make it very clear that Veeam wants to be seen as an enterprise company now.

Veeam got its start selling backup software for small and medium businesses running virtualized workloads on VMware’s hypervisor. It has an impressive track record: profitable for 8 of its 10 year history, entirely privately held and funded, with 245,000 paying customers and adding 4,000 new customers each month. Prior to McKay taking the helm, co-founder (and ex-CIO) Ratmir Timashev had set a revenue target of $1 billion a year by 2018 and was on track to get there. McKay has even loftier ambitions for the company: $1.5 billion by 2020.

McKay told attendees at the conference Partner day on Tuesday 16 May that Veeam previously only really had two segments: small, and large, based on the transaction size. It is now using more familiar segmentations: SMB, Commercial, Enterprise, and Cloud, with a couple of industry verticals that slice through the company size segments: FED (Federal government) and SLED (State, Local, and Education). McKay has set his sights on the $6 billion overall backup market as a first step, and the $15 billion Enterprise Availability market (figures according to Gartner) as the next steps for the company.

It’s very difficult to be both and SMB company and an enterprise company. The two groups have very different needs (that’s why they’re different segments) and so they need to be matched with different products that meet those different needs. Straddling multiple segments with the same offer is a recipe for disaster.

I spoke to co-founder Timashev in December 2015 about this very issue, and he told me that moving from SMB to enterprise is easier than the other way around, and while I agree, easier does not mean easy. It represents a profound change to the way Veeam is run, and the products that it offers.

We see that with the raft of new features being added to Veeam products: Continuous Data Protection for second-level recovery points, support for enterprise storage arrays from the likes of HPE and NetApp, the ability to export data to tape, VTL support, and support for backup of more than just VMware-hosted virtual machines.

It also requires a different approach to sales compared to the more self-servicing model used for SMB customers.

“We need to have our team out there evangelizing Veeam, knocking on the doors,” said Don Williams, Vice President, Australia & New Zealand. “We’re still 100% channel, but it’s very much direct led and direct touch.” Once suitable opportunities are identified, Veeam will choose an appropriate partner to bring into the deal, in keeping with its 100% channel model. Veeam will also be expanding its partnerships with systems integrators, with Capgemini, Deloitte, and Wipro among those mentioned to be added in 2017.

While Veeam generally seems to be well aware of the challenge ahead and what it needs to do, one aspect of Wednesday’s general session gives me pause. The final segment of the general session consisted of some forced banter from sponsors VMware and Cisco that took up 30 minutes of my life that I’d like to get back. My issue isn’t so much that VMware and Cisco gave the kind of presentations that I’m now used to from them, regardless of how yawn inducing they may have been. My concern is that it was the least Veeam-y part of the conference thus far.

The risk to Veeam as it transitions to being an enterprise software company is that it may lose its soul. Veeam has a unique and special culture that has been integral to its success so far. To lose that inherently Veeam-y-ness would not only be a great shame, it risks the success the company seeks to achieve. If Veeam becomes just another soulless enterprise technology company that mouths endless bromides about digital transformation then it will lose the very thing that makes it stand out from its competitors.

Veeam has succeeded because it is different. I hope it stays that way.

I traveled to VeeamON 2017 as a guest of Veeam.

This article first appeared in here.

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