Dawn Of The New Commvault?

Commvault has had a tough few years but there are early signs that its attempt at a refresh may be starting to work.

Commvault CEO Sanjay Mirchandani is very pleased with the customer response to the new Metallic Software-as-a-Service offering so far.

“We launched [Metallic] thinking that the initial foray of the product would be with the 500 to 2500 employee customers,” Mirchandani said, “But we're getting some very positive interest across segments, including enterprise, who want the choice of being able to use a SaaS capability in conjunction with other things that they have.”

“We're seeing a lot of pickup of the Office365 native backup that we can do with it,” he added.

While Commvault isn't likely to say its own product isn't doing well—not to me at any rate—Mirchandani's comments do hint at what I think has been hurting the traditional backup players, particularly in the enterprise.

Backup is sticky because of all the data being kept for month or years, sometimes as an archive (let's not go there) so changing backup system involves a lengthy transition period. And enterprises in particular tend to have more than one system doing any given task. Just one acquisition means you'll likely be doing things in multiple ways.

If you're already familiar with using more than one tool to solve the same problem, but in different areas, it reduces the barriers to adding another tool, especially when you're already doing this in other ways. Like enterprises who embraced the idea of ‘bi-modal' and put all the new cloud things into the New Hotness Team while the legacy systems were handed off to the Palliative Care Unit.

Enterprise is famous for having silos.

Given that background, if your existing backup vendor doesn't really support the new way you want to work in cloud-land, there's little reason not to just buy a new product to solve the problem. Okay, we have another backup system, sure, but it's for all this new stuff and we were going to work in a new way on it anyway.

Maybe it'll replace the old system when we've finally finished our digital transformation journey or whatever the consultants are calling it today, and by then the new product may well have all the features we need, even if it doesn't today.

It's much easier for the startups with seemingly endless mountains of other people's money to focus on these new sales because they don't have lots of existing, traditional customers to support who are used to having a product work in a particular way. Changing the product to suit the new problem, and thus attract new customers, risks annoying existing customers who don't want you to change.

And so incumbent vendors end up trying to solve the new problem with the old product in a classic innovator's dilemma situation.

“When I was a CIO, the thing that just irked me the most was having to use a piece of technology the way the vendor had decided I should use it,” said Mirchandani. “Whether it's through a SaaS capability, whether it's through an API call, whether it's through a GUI that we deliver on premises, it shouldn't be our decision on how a customer consumes the technology.”

My impression is that Commvault has finally started to respond to what customers want from it today and tomorrow, as distinct from what customers wanted previously. It's entirely understandable why: What Commvault was doing was working nicely… until it wasn't.

Prediction is very difficult, particularly about the future.

The refresh is costing a bunch of money, but Commvault's reported financials indicate to me that it's starting to work. The cost of HCI appliances due to third-party royalties is weighing on gross margins, but CFO Brian Carolan told me Commvault is “coming up with some creative things longer term to mitigate that”.

Of all the traditional enterprise backup vendors, Commvault seems to be refreshing itself the most aggressively, and I expect that this will flow through to improved sales as customers learn more about “The New Commvault”. It all hinges on Commvault's ability to deliver products that customers actually want to buy, but the early signs are certainly encouraging.