CEO Sanjay Mirchandani On Commvault Metallic And Microsoft Azure, COVID-19

After being hit by the COVID-19 coronavirus pandemic and the resulting revenue drop, Commvault's Mirchandani looks to a new strategic Azure relationship combined with a focus on cloud-like data management simplicity to make 2020 a good year.

Adjusting And Expanding The New Normal

Like most companies, Commvault has had a tough 2020 as the COVID-19 coronavirus pandemic sweeps the world and forces businesses to rethink how they manage their IT infrastructures and their data. For Commvault, the key to recovery lies in the cloud and continually pushing its data management technology to be more agile to meet the new normal.

CEO Sanjay Mirchandani told CRN that his company, which saw its fourth fiscal quarter and full fiscal 2020 revenue fall because of the pandemic, is seeding its recovery with the help of its channel partners, new board of director members, and most recently a new strategic relationship under which the Commvault Metallic SaaS-based data protection technology is now available on the Microsoft Azure Marketplace.

Mirchandani said the new Azure relationship stems from a nearly 20-year relationship between the two companies and reflects the flexibility of Commvault Metallic, which late last fall was introduced as the company's midrange business SaaS offering but is now being targeted at enterprises. "I said from Day One Metallic was built enterprise-grade. So for us, it wasn't a big deal mobilizing the channel force and sales to get it to the enterprise," he said.

Here is a look at the details behind the new Commvault-Microsoft Azure relationship and at how Mirchandani expects Commvault to grow.

What's going on with Commvault and Microsoft Azure?

We started talking a few months ago about the possibility of doing more together mostly because we've been hearing it from customers. A lot of our customers go down the journey on hyper-cloud and multi-cloud, and will say, 'Hey, how well do you work with this' or 'How well do you work with that?' And Azure came up a lot. And as Azure came up a lot, I decided it's time to go pay [Microsoft's headquarters at] Redmond a visit and talk to them about what is possible. [So now we have a partnership that first] is giving customers what they want, which is great innovation engineered right. The second is really making sure that the ecosystems that our customers like to work with, which is mostly our joint channels, are incented, enabled and activated to go take these solutions to customers. And the third is making sure that the product is easily available where customers are so we can meet them via the marketplace, via the channel partner, however they wish.

So we built a multifaceted partnership. We hope it spans over years. There was a great coming together. Customers need data protection, and they need it on the cloud that they trust. Azure is the core of that. And here we are.

Is this going to be considered to be an Azure product?

It's not an Azure product. It's going to be in the Azure Marketplace, which is as close as you get to being a seamless experience. So, if you're in the Azure Marketplace, the way it's delivered, the way it's consumed, it just feels and smells like that.

What's the integration point between Metallic and Azure?

The bulk of the backplane of the product is built on Azure. It supports a lot of the Azure APIs and technologies in a way that really brings value to a customer. It's all about keeping what we're known for, which is choice for our customers. Data protection on our side, which is what we focus on, we're really good at that. But we also want to make sure that customers have a choice of being able to protect from anything to anything. And we're optimizing a lot of our technology to work with Azure and take advantage of the Azure Stack.

So how is it sold?

You could get it through the Azure Marketplace. You can get it through your channel partner. Customers have the choice of being able to acquire it any way they wish. They can come right to us.

Given that it's available on the Azure Marketplace, does that mean direct sales to customers without going through a channel partner?

It's really up to the customer. But the nice thing about the Azure Marketplace is that if the customer is using a partner to work with on the Marketplace, they continue having that relationship. It's the best of both worlds, however the customer wishes to consume it. The really nice thing about the Azure Marketplace is that the billing and everything else is all seamless. The same with getting activated and up and running. All of that is just engineered in.

Why would a customer want to purchase this through a partner rather than getting it directly from the Azure Marketplace?

All the good reasons why you'd want to partner: integrations, upgrading, making sure that you've got the enablement you need, the project management, all the things that partners do because this is an enterprise-grade product. If you've got thousands of endpoints, if you've got thousands of servers, partners will take care of that.

Now, correct me if I'm wrong, but when Commvault first introduced Metallic last year, wasn't it introduced as more of a midrange product, not an enterprise product?

You're actually correct. Your recollection is right. We launched it as a product for between roughly 500 to 2,500 employees, that sort of a sweet spot. And what's happened over the past two months is, and I think the COVID situation has only enabled it further, customers of all sizes are looking at SaaS solutions.

Enterprise customers, midmarket customers, upper midmarket customers, you name it, they're saying, 'Hey, now all of a sudden our workforce is distributed and data is fragmented. We've got more points of presence. There's more security threats than less at this point.' A lot of customers are working with slimmer staff so they can't get into their data centers. Instead, they can do data protection with SaaS capability. Welcome to the world of Metallic.

I said from Day One Metallic was built enterprise-grade. So for us, it wasn't a big deal mobilizing the channel force and sales to get it to the enterprise.

So what's the target customer for Commvault Metallic on Azure?

Anyone. I don't mean individuals or very, very small businesses. But even then we've given it to really small businesses during the onset of COVID by giving free endpoint protection. We partnered quickly with Microsoft on that, and we turned on endpoint protection for free. And a lot of small businesses, really small businesses, took advantage of that. And essentially the use cases can go from a very small business to the largest of enterprises. And we're seeing a cross-section of all of those.

Has Metallic become a significant revenue generator for Commvault yet?

[We're in our quiet period], so my lips are sealed on anything financial. We haven't started reporting Metallic or other specialty products separately. But I would say to you that the interest, the trials, the customers, it's all trending in the right direction. We're very pleased. And the road map's richer than ever. With this, we think it's an additional boost just because of the breadth of what we're trying to do together.

Will you be working with any other cloud providers to provide a similar capability to what you're doing with Azure?

We work with all cloud providers. That's our calling card. The whole point is, today, if you look at conservatively let's say 60 percent of our customers who tell us what they do with our technology, we've written over an exabyte of data to the public cloud for our customers to date. Not just Metallic. It's all of Commvault. So this is a big piece of how we do it. And that exabyte or more isn't all Azure or AWS [Amazon Web Services]. It's a mix of different public cloud providers and service provider—the likes of Rackspace and others. So as far as we're concerned, our strength lies in choice. So we have state-of-the-art support for all data clouds. We're just doing a deeper go-to-market and engineering relationship with Azure.

Will you have that type of deeper go-to-market with Google or AWS in the future?

We'll continue working deeply with them. I'm not pre-announcing anything here. We're just trying to get this to be successful and focus on it, as you can imagine.

How is the competitive environment Commvault is facing right now?

I honestly believe we're shaking up what was traditionally seen as a data protection and backup and recovery competitive landscape. So I'm not even worried about the legacy players in that space. The upstarts, whether it would be a SaaS player or an appliance player, they've got point capabilities. Before the COVID impact, they could spend a lot of money trying to make noise about that or win customers with it. That's probably changed, I'm only guessing, in light of the fact that you have to be a little different today. And customers are coming back to the basics, which is simplification and acceleration to the cloud.

When you look at simplification and acceleration to the cloud, nobody does it better than we do, period. And if I were a CIO today, and I write about this, I blog about this, the last thing I would want is something new which is untested and has a single point of failure. So I would double down on something I know and trust, and a company that's been around and has the financial capability of being around.

Commvault recently had a shakeup of its board of directors. What's behind that?

We had some infusion in the last 18 months including myself into the board, a new chairman in Nick Adamo, and some other board members. And then, more recently, three of our board members stepped down, and we brought in three new board members, all of which I'm super excited about. [They're] already sort of engaging in a great way. It's like anything else in life. You look at it, you refresh. And the outcome is, I think I've got a great board.

How many of Commvault's directors are independent?

They're all independent except me.

A couple months ago, Commvault said fourth fiscal quarter and fiscal year 2020 sales took a hit over those of last year. What is Commvault doing to fix that?

We had a good Q2 and a good Q3. We grew sequentially, and we said at the end of Q3 that our focus on coming back to growth was Job One. Q4, unfortunately, was in the crosshairs of the onset of the pandemic. ... By the time it got to the U.S. in its full force, it was our end of fourth quarter. And as an enterprise software company, we got impacted, because you tend to have a lot of business in month three [of the quarter].

But we quickly built ourselves around this whole new world of remote delivery, light touch, doing everything we do virtually. And we're engaging our customers in a way that takes their structural shift into this new world order into account. And I think in this quarter our productivity and our ability to talk to customers and partners and to work this way, we've got it all figured out. And all our technology lends itself to cloud, light touch, remote install, and so on. So we've passed the first stage where everyone got whacked and then had to restructure themselves to work in this new world, which we did quickly.

How has Commvault's channel business been doing? Is the indirect channel business growing?

Our channel is healthy. It's a good percentage of our business that goes through the channel, a very large percentage. I'd say my channel is a lot more positive, a lot more engaged today than we were 12 months ago or even longer.

I'm a little hamstrung. I could give you examples, but I'm just biting my tongue every time I think of it because I'm going to get my butt kicked if I say something [during the quiet period.]

How has COVID-19 impacted your business with your channel partners?

It's an interesting question. There are certain channel partners that I think are mobilizing to deliver new capabilities, like service providers—small, medium, large—because customers want cloud-like capabilities. They need a partner that they can trust. The service providers are active, and we're working with them quite closely. Other partners went through the same adjustment that customers did and we did, and are coming back to life. It took some longer and some less time, but people have landed.

Without the travel, without the airports, without the downtime, we're working more and probably more productively, in some ways. And so now we’ve sort of settled into a new rhythm of doing things.

After we recover from COVID-19, how do you expect the pandemic to impact Commvault and its channel business in the long term?

I don't know if the world's going to look like it did five months ago. You know, you jump on a plane, you fly across the country, you go for a couple of meetings, you meet customers. I don't know if it's going to be quite that way anymore. I think there's a level of efficiency of being able to do things without all of that. That will be part of the new world. And I think that our channel is doing the same. We're doing the same. Heck, when you can audit a company virtually, and you can now do all the consulting arrangements that you would otherwise do in-person completely virtually, and these are people-intensive businesses, I think that the channel and us and everybody else wants to be more efficient.

Mostly, customers want to be more efficient. Customers want lighter touch, customers want cloud, they want simplicity, they want trust. And those are the kind of things we're pivoting around.