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CommVault CEO tells rivals, ‘Bring it on’

CommVault went against the grain and reported better-than-expected financial results last quarter. That makes the backup software vendor “public enemy number one” to its larger competitors, according to CEO Bob Hammer.

CommVault’s revenue of $141.9 million last quarter grew 20% from the previous year and six percent over the previous quarter. The revenue figure and the company’s $17.4 million net income beat Wall St. expectations. That comes after EMC, Symantec and IBM all missed expectations, including slow growth or declines in backup software.

Still, CommVault is not immune from problems plaguing the storage industry, such as slow federal government spending and companies’ cautious approach to closing big deals. Most of all, it faces pricing pressure from the big boys of data protection.

When asked if larger competitors Symantec, EMC and IBM are doing anything different competitively, Hammer said they were coming up with “tricky, crazy pricing initiatives” such as deep discounts and product bundling.

“Those guys are completely irrational in their pricing policies,” Hammer said on CommVault’s earnings call with analysts. “We’ve become public enemy number one. So any tricky, crazy pricing initiative they can possibly think of, they throw at customers and we’re pretty savvy in understanding what those are and can parry them pretty well. But that’s their primary weapon. We’re pretty well attuned to what each of these different vendors are doing there and respond accordingly. So my answer to them is, bring it on.”

CommVault has some tricks of its own to play in the form of new features for its Simpana 10 platform. Hammer said will bolster Simpana 10 “in the very near future” with products including enhanced archiving for Mircrosoft Exchange and SharePoint, self-service try and buy products for SMBs, features for virtual machine administrators and more partners for its IntelliSnap array-based snapshotting.

All of that goes with the Reference Copy archive option CommVault added last week that allows customers to index and classify data to low-cost storage.

Unlike several storage companies, CommVault did not have to reduce its forecast for this quarter although Hammer admitted there are possible pitfalls ahead. Although CommVault reported its revenue from the U.S. federal government increased 43% from last year, Hammer said “We are particularly cautious about U.S. federal government spending due to uncertainty associated with the recent fiscal impasse.” He also said he expects “softness” in big deals of greater than $500,000. “Many in the industry have reported big deal cancellations and pushouts,” he said.

Enterprise deals – which CommVault defines as $100,000 and up – only increased three percent last quarter.

“We understand we’re in a weak environment and also lumpy,” Hammer said. “So when you start getting into possibly seven-figure deals which makes a difference in our performance, we’re just issuing a concern. The positive is that the opportunities are there and the negative is we’re in an environment where those deals get pushed out, and there could be some future problems.”

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