Sramana: When you founded Veeam and entered this market, there were all sorts of different players in different segments of the market. You were able to create a differentiated position for Veeam. What was the process of understanding and analyzing the market that allowed you to create your positioning?
Ratmir Timashev: Part of that insight is seen in how we refer to the market. The old market is data backup and recovery. We call the new market availability. What I saw was a trend of businesses being “always on”. Businesses created a new market where recovery and data loss needed to be dealt with in minutes. The old market was trying to address those problems, but it was obvious that it really needed a new market.
When we entered the market in 2007 and 2008, we started with our core customers who are VMWare administrators. We did not phrase our technology as availability at that time. We termed it backup and we did it only for virtual machines. We were specifically built for VMWare virtualization.
VMWare administrators understood the benefits of virtualization. Virtualization enabled provisioning and so on. That core customer immediately understood the benefits of what we were doing by building backup only for virtual servers. What really made it easy is that they did not have to change anything in their datacenter. They just had to use Veeam on their VMWare servers for this small part of their datacenter. In 2005, companies were only virtualizing 10% of their datacenter.
Our competitors did not pay attention to virtualization. It was only 10% of the datacenter so they did not care. By the time they started to care it was already too late. They called Veeam a niche player, however our niche grew from 10% to 50% in 2012 and 70% in 2014.
In a technology business there are two things that are really difficult. First, it is hard to identify the niche that will become very big in the next five years. The second difficult thing is creating a brilliant product. Sales, marketing, and channel is very important, but that is all a lot easier to do.
You don’t have to be the first to the market to win. When we came to the market, there were two other companies doing what we do. They had already started educating VMWare administrators that they would need a specialized tool for their environment. They had been doing that for two years. Our product is not quite seven years old and today our bookings will be close to $180 million. Over the past six years, we grew from $0 to over $300 million with over 100,000 customers globally.
Sramana: How did you choose to finance Veeam?
Ratmir Timashev: We self-financed. My partner and I jointly invested about $5 million in the company. It did not take that much money to finance the company. If we had put in less money, we would have grown even faster. We had money, so we started wasting money left and right. If we had less money, we would have been more focused.