Business Management

Shadowing VMware, Veeam chief retains a healthy paranoia

“It’s like being at a front-row seat in a boxing match and then finding you are actually in the ring,” said Peter McKay, the recently appointed co-CEO of Swiss-headquartered high-availability and backup software company Veeam Software. Speaking to an audience of storage and backup technology experts at New Orleans’ Ernest N. Morial Convention Center, McKay was referring to the company’s role in the digital transformation space, although on reflection it could also apply to his rise to the top job.

As co-CEO, alongside CTO and co-founder Andrei Baronov, McKay is tasked with not just breaking the $1bn revenue barrier, but going well beyond, at a company with Russian roots that many pundits see as the Next Big Thing in enterprise software.

“Ratmir [Timashev, Veeam’s other co-founder] originally said his reason to hire me was to get to a billion, now he’s saying ‘I need you to get to $1.5bn’,” says McKay with a knowing smile and laugh. He clearly has a good relationship with Timashev. McKay exudes confidence and salesmanship too, traits honed through building his own business, Desktone, and selling it to VMware in October, 2013. He says he’s learned a lot of lessons from his time at VMware, observing rapid growth, what went well and what went wrong.

It’s experience that has framed his thinking and approach to Veeam. For the business to reach its financial goals though, it will need to change. McKay, who refers to his previous role with VMware as akin to being a “change agent” is no stranger to the potential pitfalls.

“Mistakes will happen before we get to $1.5bn,” he admits. “There will be things that happen, a decision we made or didn’t make that will set us up for continuous growth or will flatten us. We are incredibly paranoid.”



So what’s fuelling the paranoia? On the one hand, it’s all whoops and cheers on stage but then a moment of reality on a comfy sofa, in a small room on the second floor.

“The acquisition of key talent is a non-stop,” McKay says. “We are growing at 33 per cent and we added a thousand people in 12 months, and we will add another 800 in the next 12 months. We need skills, from people that have already done it for $2bn businesses not $200m. That’s a massive influx of continuous new talent to stay up with the growth. Otherwise your growth is going to outstretch the talent and your business is going to slow down because it becomes too complex and not scalable.”

For McKay though, it’s not just been about talent acquisition. It’s also been a process of internal change, removing responsibilities from people, changing their roles, getting people to focus on what they are good at, a process he admits has led to some “tough decisions”.   

These decisions have, it seems led to a bit of staff churn at Veeam. If reviews of the company on Glassdoor can be a measure, not everyone is happy with the changes. Reviews of the company talk of pressure, lack of communication from management and high staff turnover. Typical growing pains or a sign that Veeam’s paranoia could be well founded?

“It’s not major changes, it’s modifications along the way,” says McKay. “The people are great, the culture is great.”

It’s interesting how the similarities with VMware continue. VMware also has a reputation for high staff turnover but perhaps that’s the nature of rapid-growth companies? Certainly McKay acknowledges that Veeam and VMware are in many respects attached at the hip.

“There are so many similarities with VMware. VMware grew on virtualisation, Veeam grew on backing up the VMs of VMware. We’re behind their evolution but we’re growing fast now. VMWare dominated the market, best ROI of any software – then realised they could get to saturation and had to add more products, which complicated the go-to-market [strategy]. Sales people had to go from selling one product to selling 10, which was a dramatic shift.”


What’s good for VMware…

For most companies this point would usually be the zenith, where complexity then creeps in and revenues start to ebb on the back of a more diluted approach to market. However, McKay is buoyed by VMWare’s last fiscal year, which proved the contrary. Results in January this year showed the business is not just strong but still growing, with revenue exceeding $7bn, new products thriving and VSphere remaining popular.

So if Veeam hits its revenue targets will it IPO? Timashev has always said an IPO is not on the table but the executive changes point to a change in thinking. There is perhaps an assumption that it’s jockeying for position with a view to float or an acquisition.

“I don’t think there is any dramatic change in our view of the long term in terms of IPO or even acquisition. It’s going to be a long game but I’ve always believed you should run a company like it was a public company anyway, with the right auditors, the right processes and controls, so it’s an option. The market may take off and then, why wouldn’t we? It may be the right thing for us to do.”

Certainly VeeamOn, Veeam’s customer event in New Orleans was intended as a launchpad for the new, or at least, upgraded Veeam team and products. The company does not want to stagnate before it adds to the portfolio, so it’s been full steam ahead on additional products and partners aimed at putting hybrid cloud and backup technology at the forefront of business transformation. It’s a bold and understandable move but for McKay. His headaches over a global shortage in IT skills, getting the right people through the door and keeping them there will determine whether or not this new direction actually succeeds.


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Marc Ambasna-Jones

Marc Ambasna-Jones is a UK-based freelance writer and media consultant and has been writing about business and technology since 1989.

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