Veeam is being acquired by private equity firm Insight Partners in a US$5-billion bet that Veeam can grow its US market business to become the dominate data management and data protection technology provider it is in Europe.
New York-based Insight Partners on Thursday unveiled its planned acquisition of Veeam with an eye on bringing new resources to bear on building Veeam's US business to take advantage of the need for cloud-based data management and data protection.
As part of the acquisition, Switzerland-based Veeam's two co-founders, CEO Andrei Baronov and Ratmir Timashev, executive vice president of worldwide sales and market, will step down from their executive roles and from the company's board of directors after helping transition the company to its new owner.
Going forward, William Largent, who has served as Veeam's executive vice president of operations, will become the company's new CEO.
Veeam as an independent company has been doing very well, said Danny Allan, the company's new chief technology officer.
However, Allan told CRN USA, the acquisition is aimed at getting Veeam ready for growth in data management, particularly as the cloud becomes the driver for that technology.
Veeam in May of 2019 crossed the billion-dollar annual sales line, and for 2019 has seen significant growth in both annual sales and revenue, Allan said.
"So the growth was certainly there," he said. "This is just about adding fuel to the fire, accelerating that growth still further and tackling this next era that we believe we're entering which is the cloud data management era."
Timashev late last year told CRN that Veeam's growth path is focused heavily on data management in the fast-growing Office 365, Amazon Web Services backup, and Microsoft Azure backup markets.
He said that Veeam is already helping clients with their backup and recovery requirements, and that the next step for the vendor and those clients is to take advantage of the data they are protecting to get value from that data.
"Data has grown so much and the recovery SLAs are so strict these days, and Veeam is capable to meet all these business requirements in terms of data recovery, disaster recovery, and business continuity," he said. "But the next question after that is, okay, I understand how Veeam helps me to modernize backup. But can Veeam also help me to move to a hybrid cloud? Customers don't have the budget for tools for moving hybrid cloud, but they expect their backup vendor to help migrate to hybrid clouds."
Making Veeam the heart of data management for those customers' Office 365, AWS, and Microsoft Azure environments are central to growth for Veeam, Timashev said.
"Each of these markets will become, for us, maybe half-a-billion-dollar opportunities in the next five years," he said.
To get that kind of growth, however, requires a solid US presence, Allan said.
Allen told CRN USA that Veeam was founded about the time of the 2008 US financial crash, with the bulk of the investment focused on Europe because of the US financial turmoil. That has led to Veeam having a bigger business revenue-wise in Europe than in the US.
"And that's the opposite of most large technology companies," he said. "Usually it's the other way around. There's more large global companies headquartered in the US So we think there's a massive opportunity with the enterprise in the US"
Insight Partners already has a close-up look at the potential for growth with Veeam. The private equity company in January of 2019 made one of last year's biggest IT investments when it led a US$500-million round of funding in what was then an already profitable Veeam. Prior to that round, Veeam had only raised a total of US$32 million.
Insight Partners brings to Veeam a strong focus on the software business, as well as experience in helping build the kind of software-as-a-service capabilities required to help Veeam grow, said Mike Triplett, a managing director of Insight Partners and new board member of Veeam.
The private equity company has a three-stage Onsite program it uses to help the companies in which it invests grow, including the Startup stage of focused on companies looking for early growth in their markets, the ScaleUp stage for companies with strong businesses, and the Corporate stage for companies ready for IPOs or other exits, Triplett told CRN USA.
Triplett said Insight Partners can bring the right resources to bear to move Veeam from the "ScaleUp" stage to the "Corporate" stage.
This includes moving Veeam's headquarters from Switzerland to some as yet undetermined location in the US and bring in US-based executive leadership, he said.
"The team did a phenomenal job of building one of the largest software companies in the world with a focus on Europe," he said. "We see Veeam as one of the fastest-growing companies. We want to focus on growth in the US."
Insight Partners' plan is to continue to grow substantially in the US, Triplett said.
"We will create a lot of US jobs in sales, marketing, and R&D," he said. "We will have a strong US leadership team in place, and we will support them. And we will do this with a combination of a really strong go-to-market strategy with the best technology in the market. Veeam's an incredible, unique asset. We look forward to awesome growth."
Insight Partners has already helped over 40 companies through the IPO stage. Triplett said his company has no IPO in mind yet for Veeam, but that could happen/
"Veeam is definitely an IPO candidate," Triplett told CRN USA. "But there still so much growth to be had first."
Solution providers hope that the move by Insight Partners to invest in growing Veeam's US business will pay off for the channel given Veeam's reputation as a channel-friendly vendor.