Veeam has dug its hand down the back of its corporate couches and handed over a tidy $42.5 million to N2WS, a provider of cloud-native enterprise backup and disaster recovery services for AWS. Who, you might ask?
N2WS is the company that powered Veeam’s AWS backup solution. To paraphrase Victor Kaim, Veeam liked the product so much that it bought the company.
N2WS, an independent company, grew its revenue by 102% in 2017. It is headquartered in West Palm Beach, Florida, and has offices in the UK and Israel. Veeam has no plans to subsume the company into the Veeam brand, and it has already stated that N2WS will operate as a standalone company, keeping its brand name and becoming a “Veeam Company.”
Peter McKay, Veeam’s co-CEO and president, stated that “As enterprises look to migrate more workloads to the public cloud, having a robust and intuitive data protection and availability solution is imperative…By combining Veeam’s industry-leading capabilities in protecting virtual, physical and cloud environments with N2WS’ leadership in AWS data protection, we have a strong solution to deliver on the needs of the digital enterprise. N2WS has experienced incredible growth in the last 12 months and it will continue to operate as a standalone business to best position the company to provide AWS data protection—the same way Veeam transformed protection for VMware environments a decade ago. Together, we will achieve great things; this is a game-changer in every sense!”
What is interesting about the above statement is that McKay has talked up N2WS, stating that it has seen “incredible growth” in the last twelve months. I wonder how much of this is actually from the Veeam AWS backup product. I also wonder if N2WS will be free to move into other cloud providers like Azure, GCP, or even OVH (remember that OVH is a VMware-based public cloud provider and provides a managed service Veeam backup solution to its customers).
This is not to say that there is no synergy between the two companies. At the moment, there is the very real benefit of a single pane of glass for all your backup and recovery across your virtual, physical, and cloud-based estates, and the cloud-based estate is only going to grow. This is a good investment for Veeam with minimal risk. $42.5 million is not too large a number, and the decision to keep N2WS at arm’s length will provide a new revenue stream. With N2WS getting access to Veeam’s larger R&D departments, a merging of minds will happen. Veeam’s offering will only become more advanced, and Veeam’s current customer base will not see any changes. Remember, Veeam already utilizes N2WS’s products to manage its AWS offering.
There is no arguing but that Veeam is the premier virtualization data protection company, the one that the others place on a pedestal, both aspiring to become it and hoping to knock it off. This acquisition is both tactical and strategic. N2WS is quite a large player in an emerging market. It is also Veeam’s solution for AWS backup and restore. By taking control of N2WS, it is bringing all the Veeam revenue that is currently hemorrhaging into N2WS back into its coffers and adding the current revenue and future potential revenue from the emerging market of AWS IaaS. More importantly, Veeam can now move to providing a seamless solution for virtual, physical, and cloud-based virtual machines. Veeam still doesn’t have an answer to the question of backing up stateful containers, other than backing up the container host that is running them. This needs to change. As services move up the stack, containers and functions will become the norm, and the virtual machine will become the new legacy. If Veeam wishes to stay on its pedestal, it needs to address this.