January 28, 2021
Commvault has expanded its Metallic SaaS backup offering with support for Oracle databases, Salesforce apps and Microsoft Teams. The latest Metallic release, rolled out this week, also adds protection of on-premises Active Directory and Commvault’s HyperScale X appliances.
The broadening of the Metallic SaaS suite comes amid Commvault’s initiative to completely shift from traditional software licenses to subscriptions. During an online investor strategy event Wednesday, Commvault emphasized the growth of Metallic and its transition to recurring revenue.
Commvault’s current 2021 fiscal year that began July 1, 2020, marks the company’s transition to recurring revenue. The shift began incrementally in 2018 when 90% of its revenue came from software licenses and multiyear maintenance contracts.
In concert with the investor conference, Commvault released its latest quarterly earnings report. Gross revenue of $188 million reflected a 7% increase year-over year, which the company said was its best to date. Subscription revenue rose 50% and accounted for 55% of software revenue, up from 41% year-over-year. Annual recurring revenue (ARR) of $507 billion increased 11% year-over-year, and represented 74% of total revenue.
Commvault’s Brian Carolan
“This was a record quarter for Commvault, and we are pleased with our progress,” CFO Brian Carolan said during the investor conference. “Our organization has rallied together over the past two years to reposition the company with a focus on sustainable and responsible growth. What’s also gratifying is the fact that we’re building consistency and credibility.”
Momentum for Metallic
Commvault officials also emphasized the rapid growth of the new Metallic SaaS offering, which it launched in late 2019. At first, the Metallic backup-as-a-service (BaaS) offering came with support for Office 365 and endpoint protection. Commvault has since added support for VMware, Kubernetes containers, SAP HANA databases and Microsoft’s SQL Server.
At the time of the initial Metallic launch, it was initially only available in the U.S. But the company has incrementally expanded the global rollout during the past year. The Metallic SaaS offering, hosted in Microsoft Azure and sold only through channel partners, is now available in 23 countries. This week’s expanded rollout includes nine countries in EMEA.
Commvault’s Sanjay Mirchandani
“Metallic SaaS is where the future lies,” said Commvault CEO Sanjay Mirchandani. “Built on our core technology, Metallic provides a world-class modern SaaS experience to make it quick and easy to start and get to scale. Our platform provides the automation and APIs to integrate into customer workflows. And it can all be managed with single user interface.”
While the company did not break out revenue for Metallic, CFO Carolan said it has grown rapidly.
“It’s in the seven-figure range, and that’s going to contribute to our ARR growth over time,” he said. “In fact, over the near term, we actually foresee our subscription revenue overtaking the perpetual maintenance revenue that also rolls into ARR. Right now, perpetual maintenance is the largest component. But over the next couple of years, we see that subscription becomes the majority.”
Focus on Partners
Company officials also talked up Commvault’s partnerships, including its alliances with all of the major cloud providers, and its channel. On the cloud side, Microsoft played a key role in helping Commvault create Metallic and enable its rollout.
Microsoft’s global channel chief, Gavriella Schuster, made a brief appearance with Mirchandani during the investor conference.
Microsoft’s Gavriella Schuster
“Our engineering teams have really worked very closely together to build these solutions, and help customers solve the challenges that they’re facing today in real time,” Schuster said. “I’m glad we were collectively able to get Metallic into the market.”
Besides engineering, the partnership has included a joint go-to-market effort, said Manoj Nair, general manager of Commvault’s Metallic business.
“Our expanded partnership with Microsoft, between Metallic and Azure, allows us to use the Microsoft indirect channel,” Nair said. “We also expanded our coverage in the Commvault channel, both our direct sales force and the large Commvault partner network.”
Mirchandani said partners transact about 90% of Commvault’s business.
“I have stated it over and over again, and I mean it, that we are a channel-friendly company,” he said. “We cannot build this business, [and] we cannot put that long term guidance out there without our channel partners.”
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