Data protection is becoming a fundamental component of cybersecurity strategies.

As organizations move to the cloud and battle increased threats from ransomware, supply chain attacks and other threats, backup and recovery is becoming a primary element in cyber-recovery strategies. A leading company in this space is Commvault Systems Inc., which just reported fourth-quarter earnings.

The data protection company reported revenue reaching $785 million, a 6% increase in constant currency over the fiscal year 2022. Commvault’s Metallic platform hit the $100 million ARR mark, while subscription revenue is on its way to the $500 million milestone.

The company’s success is based on hard work, a shift toward subscription-based services and strong customer demand for its products, according to Sanjay Mirchandani (pictured), chief executive officer of Commvault.

“We’ve made that shift consciously; and, today, perpetual is a declining part of our business while subscription and SaaS, what we are calling our subscription platform, is the growing part of our business,” he said, adding that Commvault’s transition took place over the past three years with the introduction of Metallic and the company’s focus on a more repeatable-oriented model.

Mirchandani spoke with theCUBE industry analyst Dave Vellante about Commvault’s successful transition to subscription and software-as-a-service models, its expanding customer base and efforts to help clients optimize cloud usage.

Navigating the macro environment and expanding customer base

When asked about the macro environment’s impact on Commvault, Mirchandani acknowledged that larger deals were facing more scrutiny and taking longer to close. However, the company adapted quickly and adjusted its forecast and pipeline accordingly.

Commvault’s ability to evolve and offer a single platform that can provide software, appliance or SaaS-based experiences has been crucial to its success. The platform is constantly being modernized to stay ahead of enterprise needs in data protection, whether on-premises or in the cloud.

“Innovation is at the heart of what we do. And protecting customers’ data in a difficult world is the only thing we do,” Mirchandani said.

The company also seen a shift in the volume of transactions that Metallic is bringing into the company, with hundreds of new customers every quarter. Many of these customers eventually become Commvault customers as well, further reinforcing the strength of the single platform strategy.

“We’re seeing customers of all sizes. These are customers that, some of them … are a new profile of customers in the company,” Mirchandani said.

Commvault’s shift to ARR and subscriptions makes renewals critical for the company’s success. It has a net dollar retention rate of 107% for subscriptions overall and 125% for Metallic. Mirchandani is confident in the company’s ability to predict the business and maintain these metrics.

“We feel pretty good about where we’re headed. We feel that we could now give an annual guidance. We haven’t given annual guidance for a few years,” Mirchandani said. ‘We feel our technology and our go-to-market ability allow us to do that.”

Commvault’s transition to ARR and subscription-based services has been marked by transparency and consistent messaging to shareholders and investors. This approach, combined with the underlying platform strategy, has allowed the company to make the transition with less turbulence than others in the industry, according to Mirchandani.

With the growing focus on cloud optimization and cost savings, Commvault helps customers consume their committed resources from hyperscalers. Its role is to assist customers in optimizing their cloud usage.

“We probably trail a little bit from some of the numbers the hyperscalers put out, because customers have already committed. We help customers consume what they’ve committed as part of their agreements,” Mirchandani explained.

Here’s the complete video interview, one of many CUBE Conversations from SiliconANGLE and theCUBE:

Photo: SiliconANGLE