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Anand Eswaran

CEO

Veeam

play_circle_outline Veeam's history and evolution from VMware backup to data resilience leader.

play_circle_outline Five-dimensional approach to data resilience: backup, portability, security, intelligence, and innovation.

play_circle_outline Transition from legacy business to growth opportunities in the mid to high teens percentage.

play_circle_outline Third wave of growth: focus on offering products as a service, AI integration, ransomware protection.

play_circle_outline Veeam protects Navy CANES workloads

play_circle_outline Microsoft 365's $50 Million ARR Success and Strengthened ties with US Department of Defense

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Anand Eswaran, Veeam Software

Anand Eswaran

CEO Veeam

Veeam, founded on providing data protection for VMware workloads, has expanded into new areas like SaaS and container protection. Since being acquired by Insight Partners in 2020, they focus on innovation, go-to-market strategy, and ecosystem partnerships. Veeam's AI capabilities assist in threat detection, incident response, and ransomware protection. Offering customers choice in managing their data has driven significant growth, with Microsoft 365 being a key driver. Looking ahead to 2025, Veeam operates with a focus on governance, innovation, and long-term... Read more

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What was the beginning and growth trajectory of Veeam as a company? add

What are the key principles behind Veeam's approach to data resilience and product development? add

What is the company's plan for transitioning from their legacy business to growth opportunities in order to take advantage of their strong foundation and continue growing beyond the Rule of 40? add

What are some key components of Veeam's third wave strategy? add

What is the current status and future plans for workload offerings in the BAS platform by the speaker/company mentioned in the text? add

What is driving growth and business opportunities for the company? add

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Anand Eswaran, Veeam Software

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Dave Vellante

>> Hi, everybody. Welcome back to day two of our NYSE Wired and theCUBE Community's Media Week. This is Cyber Plus AI Innovators. We're super excited to have Anand Eswaran. He's the CEO of Veeam. Veeam is a company that has ascended over many years and has some big news. They announced some big news last week. Anand, first of all, thanks for coming into the NYSE studio. This is amazing.

Anand Eswaran

>> I love it.

Dave Vellante

>> We got the green background, Veeam everywhere. You guys paint the town wherever you go. Welcome to theCube NYSE.

Anand Eswaran

>> Pleasure is all mine. I love the green. I think this green looks good on NYSE.

Dave Vellante

>> It's my favorite color, green. It's the color of money, so that's who we are. So, I want to start with Veeam. A lot of people may not know Veeam. A lot of people know Veeam, but many in this world may not. So, Veeam started... It saw an opportunity to provide data protection and backup for the VMware community. And it very brilliantly named the company Veeam. And I think early on a lot of people thought that it was VMware. And the company had a great product. It was really easy to use. And VMware really didn't have a great backup solution, and the industry really wasn't focused on it. Boom, Veeam took off. And then over the years you expanded. "The product just works," was your kind of tagline. Expanded into new areas beyond VMware into... You were the first in SaaS. You were the first to do backup and data protection for containers. And then in 2020 the company was acquired by private equity firm Insight Partners for $5 billion, and that's where you came in. So, there was a great run, but then a lot of work to do. So, take us to that point when you came on, and how you've kind of brought, I'll say adult supervision, discipline, financial discipline, go-to-market discipline. What did you bring, and your team, to Veeam when you came on post-2020 acquisition?

Anand Eswaran

>> Good question, Dave. So, couple of things. First I just want to zoom out a little because you talked about data resilience and how Veeam was first there. In every modern business today, data is the currency. And if that data is unavailable, business stops, flights get grounded. And it's not just businesses, it's cities, it's governments, it's all of those things. And while today we talk about Veeam as the number one market share leader by a mile per Gartner, per IDC, the fact is, as you rightfully said, we've been at this for 18 years bringing resilience to data. Started with VMware workloads, but we've expanded far beyond that. And so as I look at the last three or four years, the first things we have started to think through is going back to what Veeam was founded on first principles and making sure that's amplified both for our customers and every product we built, which is our approach to data resilience is actually five-dimensional. It all started with backup and recovery, which was critical, and backup and recovery is the foundation for data resilience, but you need to think about portability. What happens when you want to move your data across to different platforms? Whether it is because you got hit by a ransomware attack or whether it is the situation we see today where many customers are thinking about what their plan B is for VMware, for hypervisor alternatives. And you want to make sure your data is not locked in. So, portability is super critical. Security is important way beyond what we talk about. We talk about MFA and end-to-end encryption and so on, but security is making sure that you have the best ransomware protection and recovery platform for your data. And we have been leading that charge for a long time. And finally, you need to bring it all together with the fifth dimension, which is intelligence. Beyond the AI hype, we've been talking about inserting... We've been using machine learning for understanding threat patterns long before AI was cool. And so using specific value-added use cases for making our products better, making our customer security posture better, getting insights out of the data, all of that needs to come together in a very specific way to add value for our customer. So, that's the first thing we've been doing, creating a five-dimensional view for data resilience. And every product we build brings those five pillars together. That's one, innovation. Innovation is the heartbeat of Veeam. That's what made us really good, and we continue to double down on innovation. And then when you do that, the other things then come online. We've evolved the sophistication of our go-to-market motions. Not only are we working, we have the strongest ecosystem because of how good we are. In the industry, we have 34,000-plus partners, resellers, distributors, technical partnerships. But what we've been doing is being even more deliberate about adding sophistication to our ecosystem and partner strategy. We have strategic partnerships with Microsoft. We have strategic partnerships with GSIs like Kyndryl and Infosys. We have strategic... And when I say strategic, everybody claims these partnerships. When I say strategic, it means we are working together, we have joined co-sell commitments to each other, we have joined innovation commitments, because at the end of the day it's about creating customer value to each other. So, the sophistication of go-to-market across our sales teams, how we work with our partners, adding more layers of partnerships has been a very, very good journey for us in the last three or four years. And then all of it reflects in the numbers. We just announced last week that we are going to finish this year in a short few days exceeding $1.7 billion in ARR. We are going to basically end the year at roughly 29% of EBITDA. That's generating almost half a billion dollars of EBITDA just this year. Our subscription business is growing 30%, and we are the number one per Gartner, per IDC, per all of them. So, all of this comes together.

Dave Vellante

>> So, I'm glad you started. I loved your zoom out, and I want to actually stay there for a moment because what's been happening is because of the rise of ransomware, it was a case where backup was always an afterthought and then it became kind of fundamental. And increasingly backup and data protection have become a fundamental component of cyber security strategies. And I want to get to, at some point, how that has affected your business, but those worlds are coming together. We saw Rubrik do an IPO, basically pivoted to become a cyber security company. You guys haven't done that hard pivot. I want to talk about that a little bit, but right there in terms of solving that problem, because what happens is that when ransomware has come in, they go after the backup corpus because if you can't recover then they've got you, and then they can extract ransom. So, you were talking about some of the metrics, and so I want to get to the news. So, you said 1.7 billion in ARR, 30% growth year over year in your software business-

Anand Eswaran

>> Subscription, yeah.

Dave Vellante

>> 20... In your subscription business. 29% EBITDA, so your rule of 40-plus.

Anand Eswaran

>> By a mile.

Dave Vellante

>> So, when we were meeting out in Arizona, I did a calculation and did some comps with Rubrik and Commvault and Cohesity and from what I knew from the private markets and said, "It's about $15.3 billion valuation I came up with." Now, you guys announced last week $2 billion private placement at a $15 billion post. And so you're giving the investors a nice, by my math, $2.3 billion discount, which is fantastic. And of course the market's been-

Anand Eswaran

>> Hopefully more because when we priced our secondary it was August, and you can see that the market has significantly moved from August to today. In some instances, our competitors have seen almost a doubling of the market cap. So, I'm not going to talk about numbers, but all I'll say is that 15 billion was August, and it's probably extremely conservative as I look at today.

Dave Vellante

>> Well, the reason that's important is because it gives a little bit more headroom for you as-

Anand Eswaran

>> And for our investors....

Dave Vellante

>> as the CEO, and the investors, because they want to see... Obviously Insight Partners, phenomenal, from $5 billion now to a $15 billion valuation, just a great, great... I think it underscores how private equity has changed from one that just sucks all the money out to one that sees, "Wow, we can actually do better if we take a longer term view." So, you've lived that.

Anand Eswaran

>> And I'll say a couple of things on that, Dave. One, working with Insight has been a very good journey for us because there's PEs and there's PEs like Insight and TPG where... My three years with Insight, they're growth focused and they're customer value focused. Not once have I talked about financial engineering and doing things like that. It's always been: what is the innovation roadmap? How are we going to be the thought leaders in data resilience? Because they saw this as a very important space. And how do we innovate to create customer value? Everything else we do and all the numbers we post, whether it's market share... By the way, we just got awarded last week by CRN as a 2024 Product of the Year in Data Resilience. All of that is just a consequence of doing something really right, not focusing on your competitors as much. It doesn't matter as much. It's great to see what happened with the IPOs and stuff. It brings awareness to everyone on the importance of data resilience, but we are laser-focused on our customers and on making sure that we are ahead of the curve and thinking ahead. Simple example, today everybody understands you've got to protect your SaaS applications. It's not just the SaaS vendor's accountability. And I think we got past the inflection point because Microsoft came out and said, "You've got to protect your data." Salesforce came out and said, "You've got to protect your data. We will work with you, but your data is your responsibility." And now we are past the inflection point of everyone understanding that. Veeam started protecting Microsoft 365 five, six years back, way before this was cool, way before people understood you had to do it. So, we are always thinking ahead. And it's not just driven by, "How much money can I make today?" It is driven by, "What is the best way?" This goes back to our mission. Our mission is very simple. We secure the digital world with exceptional resilience and intelligence. Goes back to our mission. We started with SaaS apps way back when. We started with Kubernetes way back when. Let me give you some numbers. Today, 90% of the companies have some sort of DevOps and Kubernetes or container work going on, less than 10% protect them. We've been on this Kubernetes journey for four years right now and we have the best Kubernetes container protection platform in the planet. And so I just bring it all back together. Let me share a few numbers on ransomware just from an industry standpoint and why this is so critical. More than 75% of the companies got breached at least once this year, more than 25% got breached four or more times, which is huge. The second number I'd share with you is 92% of the time companies got breached, their data got encrypted. The third number I'd share with you is more than three quarters of the time that data got encrypted, it actually got exfiltrated, it got pushed out. That's why most of the time, 96% of the time, these hackers attack the backup repositories because once they get that out of commission, they know that there's no way for you to recover and the only way then to do is pay the ransom. And that's what we've been in the journey of, which is safeguarding with exceptional... creating the best ransomware protection and recovery platform in the planet.

Dave Vellante

>> And does the intelligence piece... So, it's one thing to protect the corpus because you get the data back if you properly protect it, does the AI and the intelligence piece also help you minimize the exfiltration?

Anand Eswaran

>> Do it better. So, when I look at AI, we look at AI across four dimensions actually. That's why don't get caught up in the AI hype. You've got to talk about specific use cases. The first thing we do is use AI to make our products better. And nowhere has it had a bigger impact than threat detection. We have a simple, we call it indicators of compromise, IOC scanner, which just does a quick scan to say, "Do you have any elements of threats hanging around in the system?" We have a very deep scan called recon scan, which was, we should talk about that, based on an acquisition I did with CoWare.

Dave Vellante

>> Yeah, acquisition.

Anand Eswaran

>> And we'll go there. But that gives customers a deep understanding of their entire infrastructure to understand where are the threats. And then we have many more. We have AI-based malware detection. The fact that we do incident response the way we do. The only first-party incident response service, by the way, in our category. We see ransomware threats and patterns on a daily basis, and we use that intelligence and put it in the platform and scale it across our 550,000 customers, across 150-plus countries. So, we approach AI to make our products better, make our customers more secure. That's why we are focused on... We launched Veeam Digital Assistant 2.0, which frees up the admins from the routine tasks. We announced Veeam's launch for Copilot for our workloads, which is coming soon. So, we are focused on making our customers... their security posture better. And then finally in our roadmap have some pretty exciting things. We are working on: how do you create even more insight out of that backup data, immutable data at trust in cold storage with very low cost of compute? We are applying use cases like compliance is your backup from your backup data. We can figure out if you have the right compliance posture. Are you confidentially protecting PIA data? And then finally our roadmap is working on protecting the data, the engine, which fuels AI in the first place, which is you've got to protect the large language models and the small language models. So, you're working on all of these things coming together across our platform for our customers.

Dave Vellante

>> Well, remember, I was at a VeeamON and I sat through, this was like five or six years ago even, I sat through a presentation on protecting 365. And at the time there was no market for it, and people were like, "Hmm, we'll wait to see if it opens up." You guys were pretty confident that it was going to be a problem. It was kind of like cloud. Everybody thought, "Oh, my data's in the cloud. I don't need to back it up. The cloud guys will take care of that." Well, we learned that's not the case. The same exact thing happened with SaaS, with Microsoft 365, with Salesforce, as you mentioned. People I think have the perception that they don't need to back it up, when in fact they do if, in fact, they want to recover it.

Anand Eswaran

>> And we work Microsoft on it. An example is when Microsoft held Ignite... I'm losing track of time.

Dave Vellante

>> A couple weeks ago.

Anand Eswaran

>> About three weeks back, yeah. The week before Thanksgiving, I think. And when they talked about protecting Microsoft 365, the main highlight was how Veeam, Microsoft came together to protect 29,000 users of ServiceNow. And this is where Microsoft has some basic things done really well, and then Veeam overlays on top of it to create the level of granular recovery, which is hard to do. And we've been at this, as you said, for six years, we've been innovating for protecting Microsoft 365. That's the reason we have more than a third of the market share today in that space.

Dave Vellante

>> Okay, I want to come back to the news. As CEO, a big part of your job is TAM expansion, valuation expansion, et cetera. So, you've got this $1.7 billion ARR. Really nice number, nice milestone, great growth there, but because you started 18 years ago, you've also got this business that was created before the cloud, so you're sort of transitioning that base. So, your overall growth, I think, is in the mid to... around 16%, if I recall.

Anand Eswaran

>> 18%.

Dave Vellante

>> 18%, great. So, as an investor I'm like, "Okay, great. We've got this wonderful foundation. We've got the Rule of 40. It's more than Rule of 40, it's 44 or something like that. I'd love to see more growth." So, how should we think about the growth engine transitioning from that legacy business, if I can use that word, to those growth opportunities to take advantage of that? How do you plan to do that?

Anand Eswaran

>> Yeah, and if you look at our history, you started off by saying it, we rode the first wave by protecting virtualized workloads, hypervisors with a perpetual licensing model. We saw the dots around the corners, looked around the corners, and we started the second wave of growth for Veeam, which was, one, expanded significantly beyond virtualized workloads. This is where it's SaaS, it's physical, it's virtual, it's containers, it's cloud, it's SaaS apps, all of them, and we delivered them using a self-managed subscription motion. We also in the second wave, which is not done yet, we are still growing, got a focus on partnerships, not just the resellers and DSPs, but our MSPs and CSPs as well, 34,000-plus partners. And that got us to a significant bit of growth, and that was the second wave for us. Now we are already well into the third wave. And when I think of the third wave, I think of, one, we always offered our products as a service with our partners, MSPs and CSPs. We also launched Veeam's first-party service because a lot of customers wanted that commitment from Veeam directly. And we launched our first-party service earlier this year. The second obviously for the third wave is the deep work we are doing on AI, which I just shared. And the third set of things we are doing here is expanding security to create the best ransomware protection and recovery platform on the planet. This is some of the work we are doing on incident response, the acquisitions we did in CoWare, so that's where we are going. So, I bring it all back to say: we offer a customer's choice. You want to protect it and self-manage it yourself, do it. The Navy CANES, US Navy uses Veeam to protect, for protection. And it's hypersensitive workloads. They are going to want to manage it. It is air gapped, and it is going to be managed as software on-prem. There are customers who want to... as a service from their partners, we do it for them. There are customers who want it directly from me, and we do it for them. And let me give you a simple data point, which I've not talked about too often. This is our first year... We protect 150-plus workloads across the platform, this is our first year of offering our workloads as a service. We only offer one workload of the 150-plus in our BAS platform. And we are going to finish this year at more than $50 million in ARR on one workload on our BAS platform. So, take a step back now, you talked about growth, I'm extremely bullish about accelerating growth because we will eventually go down a path of every workload on BAS offering customer's choice. They have this choice of self-managed software, our partners or Veeam. Every one of those 150 will come on BAS, so huge opportunity ahead. And then finally pushing forward on AI. So, I'm extremely bullish of how this creates layers of growth for us forward.

Dave Vellante

>> What's that workload again?

Anand Eswaran

>> Microsoft 365.

Dave Vellante

>> 365. That one workload driving it.

Anand Eswaran

>> Yeah.

Dave Vellante

>> And so that not even include Salesforce, not even include ServiceNow-

Anand Eswaran

>> It doesn't include anything. It's just Microsoft 365 is going to help us finish this year, just on this one workload.

Dave Vellante

>> And another little data point, correct me if I'm wrong, but you had very little or virtually no business with the US Department of Defense or the Federal Government prior to the acquisition, or at least there were some restrictions on that. You've cleaned that up, and now you do obviously great business with them. They're a .

Anand Eswaran

>> Yeah, we had business with government, but obviously not only are we in a zone of trust with the US Government, we are actually working proactively with the Department of Defense. We are trying to lead the way on: what do software companies need to do to eliminate supply chain risk broadly? And so we are trying to actually not just say, "Okay, we are there and we can work with the government," we are actually innovating to create best practices for supply chain risk, working in partnership with the US Government.

Dave Vellante

>> We had Peter McKay on yesterday, and I was asking him about their IPO plans. Now, you're throwing off roughly half a billion dollars a year in cashflow. I don't know if it's free cash-

Anand Eswaran

>> In EBITDA, yeah.

Dave Vellante

>> Is it in EBITDA?

Anand Eswaran

>> Yeah.

Dave Vellante

>> So, it's operating... Should I think about it as operating cashflow?

Anand Eswaran

>> Yeah.

Dave Vellante

>> And I don't think you've made any statements about your balance sheet publicly, have you?

Anand Eswaran

>> We haven't made any. Yeah. It's a very strong balance sheet. I'll leave it at that.

Dave Vellante

>> Leave it at that. The point I'm making is, Peter, I thought made a great point, because I was asking about outlook for 2025, which is where I'm going with you. He said, "I think in the first half of 2025, IPOs, the companies that need to go are going to go." They have, I don't know, 450 million on the balance sheet, so they don't have to go. So, his point was, "We're going to wait and see. We don't need to go. You don't need to go." What's your outlook for 2025, and does this mean eventually this financing IPO for you?

Anand Eswaran

>> Yeah, no. So, first thing is the secondary which we did, $2 billion secondary valuing the company in '15. It wasn't because we needed liquidity or we needed money in any way. That's why we did it as a secondary and not a primary. When I look at '25, my prediction is that you're going to see some sort of opening of the IPO window towards the end of the year, not the beginning of the year. People, companies who need liquidity, who need cash, will do it, but I feel that it'll be more systemic towards the end of the year. When I think of Veeam, we don't have any need for liquidity. Being a public company is a good thing because it brings in other benefits of credibility, and shared a voice. Like the conversations we have, the conversations we have with media is a lot more when we are a public company, so there's value in doing that. But , watch the macro. We have no set time. But honestly, Dave, we operate every day like we are a public company: the governance we have, the way we work, our processes, our workflows, the way we run the business, and more importantly, the way we are always operating on a long-term vision of innovation and thought leadership for data resilience. We operate like a best-in-class public company, so when the time is right, we can go right away. There's nothing holding us back.

Dave Vellante

>> Well, and the new administration seems to be very pro-business. I'm optimistic because they're talking about growth. They're talking about... So, if you get less regulations, you get pro-business administration, maybe M&A starts to pick up again. And I think M&A and IPO kind of go hand-in-hand. And if you bring in the AI piece of it, because AI in '23, it was largely experimentation. '24 was kind of prioritization. '25, I think it'll start to throw off ROI and cash, and so that'll start to drive productivity. So, between all those factors coming together, it's almost like a potential perfect storm. I think Jeff Bezos sort of likened it to a coiled spring ready to explode. If that happens, it helps address the debt a little bit. It gives momentum, and it'll give you time to sort of figure out when the right time is to go.

Anand Eswaran

>> I completely agree with that. I am looking forward to the new administration and the new policies. We have been working with every administration. We've been here for a long time. And I think the time is now. I think 2025 is a year of data resilience, of data resilience becoming mainstream, of every company understanding they need to think about it, of the CIO, the CISO, and the board. This is a trifecta which needs to come together. It's not what just was a IT admin and backup person's responsibility. Resilience is a board priority. And so I look forward to working with the Government to influence policies. There are things we need to advance on policies to make sure that we have the right approach to ransomware, we have the right infrastructure for helping companies become more transparent and when they get breached, so we can look at all of these signals and make sure that we have the right posture broadly across the industry. So, I look forward to working with the Government on that.

Dave Vellante

>> We're out of time, but I want to ask you a last question. What is all this new wave for Veeam, this new funding, the potential for an IPO as a public company future, what does that all mean for your customers and your partners?

Anand Eswaran

>> Very simple. We were founded as a partner-first company, and we will continue to be a partner-first company. And so what it means for our customers and partners is they can expect Veeam to double down on innovation. That's been what made Veeam what it is today, and we will double down on that. We will double down on every single dimension of the five dimensions of data resilience we are working on. We are going to double down on AI to help our customers become more resilient. And by virtue of that, it's a great thing for our partners because this is going to mean good business for our partners as they work with Veeam to create these solutions for their customers.

Dave Vellante

>> Well, listen, we're super grateful that you took some time with us today. Good luck going forward, and I hope we can have you back for an update in the future.

Anand Eswaran

>> Absolutely. Number one resilience platform on the planet. Thank you.

Dave Vellante

>> All right, thank you. All right, keep it right there. We got more action coming from NYSE Wired and theCUBE's Media Week: Cyber and AI Innovators. I'm Dave Vellante. John Furrier is also here. Keep it right there. Right back, right after this short break.