Commvault increased its year-over-year revenues for the third straight quarter, with a big assist from the cloud.
Like all storage vendors, Commvault is looking for a way to work with public cloud providers to prevent getting steamrolled by them. In Commvault’s case, the strategy is to protect and manage data in public and hybrid storage clouds the same way it does on traditional on-prem storage. Commvault has emphasized the cloud in recent product releases, and that appears to be paying off.
Commvault Tuesday reported revenue of $152.4 million in last quarter, a 10% increase over last year. Its software revenue of $63.9 million increased 13%. Revenue from enterprise deals — $100,000 or more in software revenue in the quarter – came to 52% of the total software revenue for a 19% year-over-year increase. Commvault claims it added approximately 450 new customers in the quarter.
Commvault lost $2.5 million in the quarter following an aggressive hiring period and a licensing model change, but is heading in the right direction with three quarters of growth following three disappointing quarters in 2015. CFO Brian Carolan said he expects revenue to be higher this quarter than last.
CEO Bob Hammer said customers are using Commvault software to manage data stored in public clouds, to migrate data into the cloud and move it across private and public clouds.
Hammer said Commvault also increased its on-premise business, but the cloud appears to be where the future growth lies. He said the amount of data stored in public clouds using Commvault software has increased more than 60% over the past six months.
“The cloud is a catalyst for growth,” Hammer said. “The move to the cloud has become a major factor contributing to our increased business momentum.”
Commvault has worked closely with Amazon, Microsoft and other public cloud providers to make its software compatible. Hammer said cloud providers are also using Commvault software to services for disaster recovery and application development storage.
“We see meaningful contributions to license revenue growth from partners such as Microsoft and AWS as well as large global systems integrators,” he said.
Hammer said large enterprises are using Commvault to set up and manage hybrid clouds and it continues to tailor its software to the cloud. In the next few months, the vendor plans to launch “cloud-first” applications to improve data protection and management in the cloud. These improvements include user self-service, expanded content search and analytics, and embedded software to enables software-as-a-service and managed services.
Like Veeam Software, Commvault is growing revenue far ahead of the data protection industry. Their largest competitors are in transition – Veritas in the early days of a spinoff from Symantec, and EMC about to merge with Dell.
“We are out-innovating those competitors and are better organized in the field,” Hammer said about Veritas and EMC.
Hammer said Commvault is out-growing Veeam in the markets where they compete.
“Veeam has become, for us, less of a competitive issue,” he said. “Our growth rates in the mid-market products that compete against Veeam are high, probably higher than Veeam’s growth rates. So my guess is we’re picking up share in that segment of the market.’
While Commvault beat Wall Street’s consensus revenue expectation by more than $3 million, Hammer said it did not meet its own expectations.
“We could have executed better,” he said. “As good as the numbers were, there was opportunity to do better than that. So from an external standpoint these are really good numbers, but we have very aggressive internal plans.”