Commvault Systems has posted Q1 financial data for FY2024, showing almost no revenue growth year-on-year. However, subscription revenue is up over 11%. What does this show for the data protection industry and Commvault in particular?
Background
In Q1, Commvault separated out the previous reporting categories of Software & Products and Services into four new groups – Subscription, Perpetual Licence, Customer Support and Other Services. The data has been retrospectively calculated by the company for FY2023, allowing some comparison.
Total revenue for Q1 FY2024 was just over $198 million, less than 0.1% up on the same period in FY2024. However, subscriptions were up over 11%, while perpetual licence revenue was down by 26%. Over the last four quarters, there has been a visible trend for increasing subscriptions and decreasing perpetual licences.
Services Model
As we highlighted back in May 2023, Commvault has successfully developed the Metallic brand as a re-invention of the company, obfuscating any complexity in software deployment behind a managed service. Back in January 2023, we published a podcast episode with Commvault, discussing the additional steps required to build a secure SaaS platform, especially when that service is used to protect other businesses. You can listen to the podcast below (embedded).
In June 2023, Commvault announced a series of existing and extended capabilities to improve the security posture of businesses, establish earlier detection of intrusions, malware and ransomware attacks, and enable recovery should the worst happen. These types of solutions are best suited (and arguably only suited) to the SaaS delivery model, where constant improvement, innovation and adaptation are possible.
The Architect’s View®
The fundamentals of backup and restore are still table stakes for all data protection solutions. As we discussed in this blog post, it’s not enough to claim to be a security company – data protection and security are merging ever closer, so both functions remain critical to securing data assets. Data exploits continue to evolve (MOVEit being a good example), and as a result, we should expect to see new features and functionality announced regularly. This aspect will be the comparison point between vendors in this market.
For Commvault, transferring business to a service model is a good thing, as it enables the company to be more dynamic in the capabilities it offers. However, the public cloud hyper-scalers have spotted an opportunity and are quickly iterating native backup solutions from relatively simple services to more complex and mature ones. There used to be clear water separating the public cloud and third-party backup vendors. That gap is narrowing, demanding that the entire data protection market steps up to another level.
Copyright (c) 2007-2023 – Post #8a34 – Brookend Ltd, first published on https://www.architecting.it/blog, do not reproduce without permission. Commvault is a Tracked Vendor by Architecting IT for data protection and storage systems. Commvault has previously been a customer of Architecting IT and Brookend Ltd.
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