Veeam Hoping Cloud Backup Giveaway Amounts to Million of Dollars

In an effort to boost demand for its cloud-based backup and disaster recovery as a service (DRaaS) technologies, Veeam Software and participating partners are offering up to $1,000 per customer worth of cloud product usage.

Spread across the company's base of 230,000 customers, Veeam executives say, the credits could amount to up to a $200 million giveaway.

Even a fraction of that would be a substantial outlay for a company that reported $607 million in revenues last year, but Veeam executives see only upside.

"If you look at how cloud revenue generates, it looks like a wedge moving over to the right. We think of this as long-term customer value, long-term revenue growth. We're highly confident that this level of investment will be well-eclipsed by future revenues," said Paul Mattes, vice president of the global cloud group at Veeam, in a telephone interview this week.

The program works with the Veeam Cloud Connect technology that integrates with the Veeam Availability Suite, Veeam Backup and Replication product, and Veeam Backup Essentials. Going by the 3:2:1 rule of backup -- three copies of the data on two types of media with one backup kept offsite -- Cloud Connect enables a cloud backup/DRaaS option hosted at a Veeam partner datacenter or with a public cloud provider. With its 100-percent channel model, Veeam does not offer its own option to do a cloud backup to a datacenter it controls.

Partners, mostly participants in the Veeam Cloud & Service Provider (VCSP) program, will be responsible for half of the credits, but their responses to that financial burden so far have been positive, Mattes said. "We're asking the partners to share in the incentive. Every partner to date has said that's no problem. It's just the tip of the iceberg when they see the revenue growth that can happen over time."

In marketing the new program to the channel, Veeam points to recent Gartner estimates that the DRaaS market will nearly triple within the next three years to $3.4 billion in revenues by 2019.

The bulk of Veeam's business now comes through its 45,000 reseller partners, who deal mostly in the company's virtualization-based availability and backup and recovery software. Veeam and its fast-growing base of 14,000 VCSPs hope the giveaway program will radically increase the share of business that involves cloud-based backup from a relatively small base, Mattes said.

Both parties also hope the program will spark profitable new connections between Veeam resellers and the VCSP community. Said Mattes, "Part of the goal of this program is how do we empower that connection?"

Posted by Scott Bekker on February 16, 2017