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Disaster recovery has changed a lot since Zerto introduced hypervisor-based replication in 2011 to help protect virtual infrastructures.
DR is no longer simply about passing a DR test and hoping for the best. Zerto CEO Ziv Kedem said more businesses are finding that IT uptime is synonymous with business uptime. BC/DR has become more important because outages hurt the business's bottom line. As companies adopt the public cloud, switch to SaaS applications or otherwise modernize their IT infrastructure, they've become more dependent on IT. Meanwhile, threats like ransomware and natural disasters, which can cause significant downtime, still loom.
Kedem pointed out that containers and SaaS applications, two new areas seeing greater customer adoption, will eventually need better DR offerings. He said demand may be low now, but those environments will need the same level of protection and resilience as virtualized environments today. We spoke with Kedem about these emerging workloads and asked about any future plans he has for Zerto on the business side.
What are the biggest customer pain points right now when it comes to DR?
Ziv Kedem: The biggest problem is that DR has become something real. Every business for many years had DR as something mostly for compliance, either from a corporate policy or a regulatory policy. The DR test was just something they needed to pass. They didn't really have to ask themselves, "What will happen if I actually have to use it?"
But today, as more enterprises move forward in a digital transformation, they are more dependent on their IT. And there's definitely huge value in doing that, but it means IT has become a more critical piece of enterprises. So customers can't accept being down for ten minutes.
We're seeing the customers really moving and thinking about how to deliver the service levels that they need. It's no longer, "We need to pass the DR test." It's about having a realistic strategy to protect the enterprise's most valuable assets, which are applications and data.
What difficulties are customers experiencing during digital transformation?
Kedem: It's a moving target. When it comes to digital transformation, customers have a lot to consider. They need to embrace the cloud, they have to consider security risks, they have to think about getting attacked by ransomware. And it's not even a question of if you'll be attacked or if someone will succeed. It's when and how much will it cost.
So they're having all these things going on while making little changes, all while having to keep everything running. And it's not in one day, but a five-to-10-year journey of continuous changing. There is no tolerance for downtime or data loss. They're trying to figure out how to transform the business to the next level and put it in a more strategic place, but also do it without being disruptive to the business.
What does the emergence of containers mean for Zerto?
Kedem: Containers are still in the early stages of adoption in the enterprise. I do think that containers have passed the point of no return -- the world is going to use more and more containers and they'll eventually make their way to the most high-end production systems. But today, when we talk to our customers, they're only now starting to think about how to protect these things.
Today, the vast majority of production containers are stateless, which means enterprises use something else for storing data. But if you look at where containers are going, that's not the way it's going to be used long term. Eventually, the data is going to move into the containers, and when that happens, it's definitely something we want to help protect.
Would it require any changes in Zerto's software or the technology?
Kedem: Of course. It depends on what you want to do. We have customers protecting containerized application states, protecting the hosts of the containers, and protecting the VM that carries the data. It doesn't need anything different than just protecting VMs. But we're looking into the market and talking with our customers because the high-level need is the same, but the how is different.
I think the market is not there yet, but it will be. I can tell you something for a fact: every large customer has some initiatives with containers. How soon will that make it into production? I think we're going to start seeing that in the next two to three years.
Our customers are telling me that it's not yet there, but they're starting to think about how they'll protect these environments when they go into production.
What about DR for SaaS applications, such as Office 365 and Salesforce?
Kedem: The more important SaaS applications become, the more they have to be part of an enterprise's DR strategy. But so far, the customers don't think it's super important, so we don't yet have an offering there. We're talking with our customers to see when that's going to be strategic for them. It's definitely something that eventually will need to be part of that same resilience strategy.
Right now, when you go SaaS, you're betting on the SaaS vendor. But then you have hundreds or thousands of company applications that are running on SAP or Salesforce, and these things can break, regardless of where you sit. I think eventually these will also have to be more resilient. You can't have your company be down while waiting for Salesforce to be fixed.
You started Zerto in 2009, and you last had a funding round in 2016. Is Zerto looking at an IPO or another funding round?
Kedem: We're between 750 and 800 people with about 8,000 customers. We're building the company as an independent company, but we don't discuss funding plans publicly.
I think we were lucky enough to put out the solution just when the market was going through a transformation. When we were doing the betas for Zerto, we met a lot of guys who basically said, "I don't have anything production that's virtualized, so why is Zerto relevant for me?" And two years later, we couldn't find one customer that said that. So that was a good time to go into the market.