Analyst(s): Krista Case, Camberley Bates
Publication Date: November 25, 2024
Veeam’s latest strategic moves, including the acquisition of Alcion and the expansion of its BaaS offerings, position the company for continued growth. The company’s focus on AI-powered automation, enhanced security, and cloud-native solutions will drive innovation and customer satisfaction.
What is Covered in this Article:
- Veeam’s shift to its next phase of growth, its Wave Three – building from its success in protecting on-premises virtual machines and its growing traction in hybrid multi-cloud environments.
- Veeam’s evolving Backup-as-a-Service, AI, and Security developments.
- Key facets of Veeam’s go-forward Enterprise growth strategy.
The News: Veeam hosted its Ninth Annual Analyst Summit on November 11-13, 2024, in Scottsdale, Arizona. At the event, company executives presented their vision for the next phase of the company’s growth along with key initiatives, portfolio roadmap, and sales and marketing evolution. Their intention is to build upon $1.5 billion in annual recurring revenue (ARR) that the company reported for 2023.
Veeam’s Next Wave: A Focus on AI, Security, and Cloud
Analyst Take: Enter the Era of Veeam’s Wave Three
Veeam gained its initial market traction, which CEO Anand Eswaran dubs as its Wave One, on the back of on-premises perpetual licenses for VMware data protection software. Its Wave Two, initiated in 2017, was spearheaded by a transition to a subscription software model and a deeper push into third-party-delivered backup-as-a-service (BaaS) via its Veeam Cloud Service Provider (VCSP) partners.
Highlights of Veeam’s Wave Two include the company’s expansion from its initial concentration in SMB and mid-sized enterprise accounts into large enterprises, as well as from its concentration in on-premises VM protection, into support of physical, Kubernetes, infrastructure-as-a-service (IaaS), and software-as-a-service (SaaS) workloads.
The company is now shifting gears to its next phase of growth, its Wave Three. Eswaran painted his vision for the company’s key growth drivers during this next era, including accelerating the ongoing transition to BaaS. We note Veeam entered into first-party BaaS one year ago and its ongoing investments in the area, such as the enhancements to its Veeam Data Cloud Vault that it announced in tandem with the conference.
Overall, Eswaran’s vision is to “safeguard the digital world with exceptional resilience and intelligence.” The undercurrent of this vision is anticipating significant growth in the SaaS market, which, if they are to follow suit with Microsoft, will need to be protected. Futurum Intelligence does anticipate the Saas Market to grow significantly (Enterprise SaaS-based deployment is expected to experience the highest CAGR of 8.0%, reaching a revenue of $349B by 2028). How and where it is protected is an open market opportunity. It is also important to note that the strategy will need to balance the channel, VCSPs, and hyperscaler sales, all of which the current executive team has done before.
Beyond BaaS: AI as More
Beyond Veeam’s expansion around BaaS, the company’s investments in AI and security-related capabilities also represent increased functionality and areas to fuel growth.
From an AI perspective, Veeam has been pragmatic in its approaches both to capability development and to market messaging. Although it has not been as vocal as some peers in this space, it has been strategically building a suite of capabilities that add functional value for practitioners. These can be generally broken down into the following areas:
- AI-fueled automation of routine tasks such as backup scheduling and recovery processes to reduce manual effort and improve efficiency for IT Operations. The prime example here being Veeam’s September 2024 acquisition of Alcion, a provider of AI-powered protection for Microsoft 365 data, and its subsequent appointment of Alcion’s CEO and Co-founder Niraj Tolia as Veeam’s CTO.
- Enhanced threat detection with AI-driven analytics, for example, to uncover malicious user behavior.
- Intelligent classification, organization, and management of data, in order to improve data governance and compliance. Additionally, we see Veeam employing AI to automatically classify data based on its sensitivity and importance, ensuring that critical data is protected accordingly.
- AI-driven predictive analytics to forecast future storage needs and optimize resource allocation.
Looking ahead, The Futurum Group anticipates that Veeam will become more vocal around its AI capabilities, but that this messaging will remain strategic, tying capabilities back to concrete use cases that move the needle for customer value.
Arguably even more than AI, The Futurum Group notes that Veeam’s investments in security are strategically augmenting, and in some cases even extending the company beyond its data backup and recovery roots. The prime example of this is Veeam’s April 2024 acquisition of incident response provider Coveware.
Notably, Coveware has the largest and constantly evolving commercial database of ransomware threat signatures, and further strengthens Veeam Data Platform’s AI-driven threat detection engine. For example, it provides insights into recovery and re-extortion rates, as well as initially demanded and final paid ransom amounts, that can help customers make informed decisions around ransom payment and recovery. This data is being used to build into the Veeam Data Platform a Recon Scanner that tracks trends in initial ingress methods, such as remote access compromise, phishing, software vulnerabilities, or a malicious insider so that they can be proactively identified and remediated, as a result helping customers to avoid a ransomware attack. The Recon capability rounds out Veeam’s threat detection visibility with the simultaneous additions of scanning for indicators of compromise during the backup process, and known malware signatures post-backup and during the recovery process. Coveware even offers Incident Response preparedness training services, complementing Veeam’s roots in data protection software, for a more comprehensive approach to cyber resiliency.
Optimizing Enterprise Traction
For Veeam, continuing to expand its enterprise traction is another important facet to meeting its growth targets. The company’s strategy in this market is twofold and includes attracting new enterprise accounts and expanding share-of-wallet in the accounts that it already has a foothold in.
Both will benefit from the company’s multi-product approach, addressing new workloads and the expected expansion of the enterprise into SaaS applications. We do not expect Veeam to cover all the corner cases for the enterprise, rather focus their technology efforts on where the market is moving while continuing to enhance their enterprise support services with dedicated account personnel.
Expanding into the C-Suite, and in visibility among CISOs, will be important for Veeam in meeting its growth targets. To that end, Veeam’s CTO team has begun hosting Incident Response and Cyber-Resilience Workshops that it notes are helping the company to talk to new stakeholders outside of the data protection administrator, including security executives, while also helping it to garner attention in new-to-Veeam accounts.
What to Watch:
- Veeam’s strategic integrations of Alcion and Coveware. Notably, Veeam’s ability to extend Alcion’s expertise in AI-driven data protection and backup-as-a-service through the guidance of Alcion CEO and co-founder Niraj Tolia, who is now Veeam’s CTO. Additionally, its ability to balance productization of Coveware capabilities, with the ramping of the organization’s professional services arm.
- Veeam’s ability to convert budding conversations with new personas, including with CISOs, into material opportunities.
- Veeam’s ability to ramp its backup-as-a-service business, hand-in-hand with its VCSPs.
- Veeam’s ability to strategically increase mindshare around AI.
Disclosure: The Futurum Group is a research and advisory firm that engages or has engaged in research, analysis, and advisory services with many technology companies, including those mentioned in this article. The author does not hold any equity positions with any company mentioned in this article.
Analysis and opinions expressed herein are specific to the analyst individually and data and other information that might have been provided for validation, not those of The Futurum Group as a whole.
Other insights from The Futurum Group:
VeeamON 2024: From Backups to Cyber-Resiliency and Incident Response
Veeam Acquires Alcion, Appoints Niraj Tolia as CTO
Veeam Strengthens Its BUaaS Play with Cirrus
Author Information
With a focus on data security, protection, and management, Krista has a particular focus on how these strategies play out in multi-cloud environments. She brings approximately 15 years of experience providing research and advisory services and creating thought leadership content. Her vantage point spans technology and vendor portfolio developments; customer buying behavior trends; and vendor ecosystems, go-to-market positioning, and business models. Her work has appeared in major publications including eWeek, TechTarget and The Register.
Prior to joining The Futurum Group, Krista led the data protection practice for Evaluator Group and the data center practice of analyst firm Technology Business Research. She also created articles, product analyses, and blogs on all things storage and data protection and management for analyst firm Storage Switzerland and led market intelligence initiatives for media company TechTarget.
Camberley brings over 25 years of executive experience leading sales and marketing teams at Fortune 500 firms. Before joining The Futurum Group, she led the Evaluator Group, an information technology analyst firm as Managing Director.
Her career has spanned all elements of sales and marketing including a 360-degree view of addressing challenges and delivering solutions was achieved from crossing the boundary of sales and channel engagement with large enterprise vendors and her own 100-person IT services firm.
Camberley has provided Global 250 startups with go-to-market strategies, creating a new market category “MAID” as Vice President of Marketing at COPAN and led a worldwide marketing team including channels as a VP at VERITAS. At GE Access, a $2B distribution company, she served as VP of a new division and succeeded in growing the company from $14 to $500 million and built a successful 100-person IT services firm. Camberley began her career at IBM in sales and management.
She holds a Bachelor of Science in International Business from California State University – Long Beach and executive certificates from Wellesley and Wharton School of Business.
