Veeam Set To Grab The Spotlight At VMworld With Cloud Connect Partner Platform

Fast-growing Veeam Software is set to grab the spotlight at VMworld next week, prepping partners to make the recurring-revenue cloud-computing shift with its Cloud Connect disaster-recovery platform.

Veeam CEO Ratmir TImashev said the company will be showcasing the new offering as a door-opener for partners looking to build a simple, easy, and yet robust, enterprise cloud disaster-recovery subscription business with rich margins.

"This is a unique, once-in-a-lifetime opportunity," said Timashev, speaking about the Disaster Recovery-as-a-Service platform, which the company will release in the fourth quarter as Cloud Connect -- part of Veeam Availability Suite v9. "This will allow partners to change from a traditional reseller/professional services model to a recurring-revenue, monthly-managed services cloud. It is going to be huge for partners."

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This year's VMworld, which runs from Aug. 30 to Sept. 3 at San Francisco's Moscone Center, comes with VMware in turmoil with executive departures and questions about how the virtualization kingpin will fit going forward with the EMC Federation of Companies. With that backdrop, the prospect of a fast-growth market opportunity with Veeam is sure to grab partners' attention at the show.

"Everybody talks about disaster recovery in the cloud, but not a lot of companies are doing it," said Timashev. "We are going to be the ones that break open this market. It's as easy as pick and click -- pick the VMs you want to replicate and click from the Veeam interface to replicate them in the cloud. Simplicity and the channel are going to be the key to our success with disaster recovery."

MarketsandMarkets.com, a market research firm based in India, estimates that the Disaster Recovery-as-a-Service market will grow at a compound annual growth rate of 53 percent from $1.42 billion in 2015 to $11.92 billion in 2020.

Partners said they see Cloud Connect moving to the robust Veeam virtualized storage backup franchise, which grew at a 64 percent sales clip in the enterprise sector in the second quarter, into a cloud-era game-changer.

"It's a hot market," said John Iacone, the founder and CEO of International Integrated Solutions (IIS), Plainview, N.Y., No. 121 on the 2014 CRN Solution Provider 500.

"Everyone wants to do backup in the cloud. We are looking forward to getting our hands on the product and working with Veeam on Disaster-as-a-Recovery service. It's a whole, new recurring-revenue service that we can build ourselves," he said.

Iacone said the Disaster Recovery-as-a-Service offering hits the market with an increasing number of customers looking to move to an as-a-service disaster-recovery model.

"Companies are looking to get rid of their backup nightmares," he said. "The companies we call on don't seem to do a good job of managing that process internally. It is easier for them to push the liability to someone else rather than own it themselves."

Iacone said he sees the Cloud Connect offerings building on the already successful Veeam backup franchise.

"They already deliver a user-friendly method to back up virtualized environments in a very reliable and efficient manner," he said. "Cloud Connect is going to provide an enhanced way to utilize and maintain off-site backups along with WAN acceleration. It is going to be huge."

Iacone estimated that as many as 70 percent of his virtualization customers already use Veeam to back up virtualized environments. "The best thing about Veeam is it works out of the box every time," he said. "The standard backup technologies for virtualized environments are horror shows. They never worked properly. And the margins with Veeam are the highest we have seen from a backup software perspective."

The high margins are a result of a Veeam 100 percent channel sales model that was developed from the nine-year-old company's early days with a pledge to drive best-in-class margins. Partners said the company has gone above and beyond to maintain the best-in-class channel commitment.

One sign that channel commitment is paying off: a Veeam Net Promoter Score (NPS) -- an index measuring a customer's willingness to recommend the product -- recently came in at 62, compared to 45 for VMware, 38 for Cisco and 25 for Oracle. Apple's iPhone at 63 is just 1 point above Veeam.

Randy Seidl, the CEO of Revenue Acceleration LLC, a former Hewlett-Packard SVP and EMC badge No. 33, said in more than 30 years in the technology sales trenches he has never seen a company with a better customer-satisfaction track record.

"There are no problem accounts with Veeam," he said. "I have never seen anything like that. The highest net promoter score, the best margin for partners in the industry, the best availability product for virtualized data centers, who could ask for more?"

Partners, for their part, said they are looking forward to the same kind of high-margin channel commitment in the Disaster Recovery-as-a-Service market.

Timashev said partners will have the opportunity to build their own Disaster Recovery-as-a-Service out of their own data centers or cloud infrastructure using Cloud Connect. That paves the way for partners to wrap the Disaster Recovery-as-a-Service into a full, monthly managed services offering, doing their own pricing and billing with multiple service level agreements to drive higher sales and margins.

"Partners can sell it at the price they see fit, depending on the amount of services they build on top of it," said Timashev. "That gives partners a lot of flexibility. They can offer multiple SLAs, depending on how critical the application is."

Partners that do not want to take on the cost of doing their own Disaster Recovery-as-a-Service can connect to Microsoft Azure or VMware vCloud Air as a virtual appliance. But under that scenario, a solution provider's customer would have to open a compute/storage account and be billed directly by Azure or vCloud Air. "This is for solution providers that do not want to use their own infrastructure and do not want to take responsibility for the SLAs," Timashev said.

Timashev estimates that as many as 20 percent of partners will hop on the Disaster Recovery-as-a-Service opportunity over the first year. "They are really excited about it," he said. "They see it as an opportunity to bring customers to their own cloud."

Even as partners grapple with making the cloud transition, Timashev said he couldn't be more confident with regard to his company's 100 percent channel sales model.

"The channel is the closest to the customer," he said. "Twenty years ago, when Dell was growing fast, everybody thought that everything would go direct and everybody would buy online. Yet the value of the channel has increased in the last 10 years. That's because of the intimacy, close relationship and flexibility the channel has with customers."

PUBLISHED AUG. 27, 2015