Veeam’s business soars in APAC, acquisitions on the cards

Veeam expects to grow its business in Asia-Pacific and Japan (APJ) by about 40% this year, buoyed by high-growth markets such as China, Japan, India and Southeast Asia, where enterprises are increasingly moving towards hybrid cloud environments.

Speaking to Computer Weekly in an exclusive interview, Shaun McLagan, senior vice-president for Veeam in APJ, said in Indonesia, Vietnam and the Philippines, for example, enterprises are skipping a generation of IT, moving from mostly physical IT infrastructures with some virtualisation, towards hybrid cloud.

This has, in turn, fuelled demand for backup, recovery and data management software across a hybrid IT environment. “This is a great spot for us – we know the movement of data is going to continue,” McLagan said, noting that Veeam’s APJ business grew by 36% in 2018.

He attributed much of Veeam’s success in the region to the growing business of its channel partners, which he said have been looking for ways to differentiate their services rather than merely pushing products, along with technology alliances with companies such as Hewlett Packard Enterprise, VMware and Nutanix.

Veeam’s accelerating business in APJ last year mirrored its global traction. The company closed the year with $963m in bookings revenue, representing a growth rate of 16% compared with 2017.

Although Veeam fell short of its goal to rake in $1bn in 2018, largely due to its shift in focus from its small and medium-sized enterprise (SME) and mid-enterprise stronghold to larger firms during the year, it expects to reach the target by the end of the second quarter of 2019 on a trailing 12-month basis.

“We added 48,000 customers, became number one in Europe in terms of market share and number four globally,” Veeam co-founder and executive vice-president Ratmir Timashev told Computer Weekly at its new regional headquarters in Singapore.

“That’s a tremendous achievement, considering the fact that we’ve been growing organically with no acquisitions, with 60% of our business from new licences and customers,” he added.

With Veeam having raised $500m in funding from Insight Venture Partners and Canada Pension Plan Investment Board, Timashev said the company is looking at a handful of acquisitions this year in areas such as Kernel-based Virtual Machine, artificial intelligence and containers.

Timashev, however, stressed that Veeam prefers to develop its technology in-house and will only acquire companies in adjacent market segments where it does not have the bandwidth to play in. 

In January 2018, Veeam made its first major acquisition, N2WS, an Amazon Web Services (AWS) cloud backup and recovery specialist, in a bid to expand its footprint in cloud-based backup. “This is a very good example of a company we might acquire this year or in future,” he said.

Timashev noted that such acquisitions will enable Veeam to reach AWS buyers – from a sales and marketing perspective – that will become part of the core infrastructure team in years to come.

Such acquisitions, he added, will remain as separate companies until their customers make their move into multi-cloud infrastructure. “So if we’re looking at containers, we will keep the [acquired] company separate, as containers are not mainstream yet.”

Veeam, which is profitable with $800m in cash holdings and other investments, is not limiting itself to acquiring companies that focus on cloud backups on AWS in the case of N2WS. Timashev said the company will be looking at similar acquisitions of companies that offer similar services for other public clouds such as Microsoft Azure, Google Cloud and Alibaba Cloud.

For now, Timashev is confident that Veeam will continue to grow its business by 20-25% each year, so there is no reason to sell the company or go public – though Veeam is keeping its options open. “There’s no pressure from outside investors for an exit,” Timashev said.