Veeam Software will add a fully functional physical server backup product in 2016, according to founder and CEO Ratmir Timashev.

Veeam sprung up as a virtual machine backup specialist and has resisted supporting physical server backup. But Veeam customer requests as the vendor moves into the enterprise with its Veeam Availability Suite have prompted a change.

The company did add a free but limited Endpoint Backup product that supported physical desktops and laptops in 2014. Timashev said the next version of that product will be a paid and fully supported application.

Veeam, a private company, reported total bookings of $474 million for 2015, a 22% increase over 2014, as enterprise orders grew 34%. Timashev said Veeam is profitable and predicts $1 billion in revenue by 2018. He said he expects greater growth in 2016 due to the recent release of Veeam Availability Suite 9 and transition periods for enterprise backup rivals Veritas and EMC. Symantec this month completed its sale of Veritas to the Carlyle Group, and Dell expects to close its $67 billion acquisition of EMC around mid-2016.

We spoke with Timashev about Veeam's plans for a physical server and how competition is changing as Veeam Availability Suite moves deeper into the enterprise.

You said your enterprise revenue grew 34% last year. Are there any other enterprise features you need to add to Veeam Availability Suite to become more competitive there?

Ratmir Timashev, CEO,

Veeam Ratmir Timashev, CEO,Veeam

Ratmir Timashev: The only real feature we are missing is protection for physical servers. We have plans later this year for physical support. We have a free product for endpoint backup [Veeam Endpoint Backup], but late this year we are planning version two of this product, and it will have full-blown support for physical servers.

That's the only weakness we have now. Competitors like Commvault and Veritas tell enterprises that "Veeam is a niche player." They say, "We do everything Veeam does but we also do physical." Also, we will announce another product in March that is focused on large enterprises and sits on top of Veeam Availability Suite for enterprises. But I can't talk about that now.

Will Endpoint Backup 2 be a full-licensed product?

Timashev: Yes. We will keep the free version with limited functionality, but the full-blown product will be licensed.

Your largest enterprise competitors are going through internal changes. Is the recently completed Veritas sale from Symantec good or bad for Veeam?

Veeam CEO Ratmir Timashev said he expects greater growth in 2016 due to the recent release of Veeam Availability Suite 9 and transition periods for enterprise backup rivals Veritas and EMC.

Timashev: We think that plays well for us because there is uncertainty for customers in the marketplace with the spinoff. Every time a private equity firm buys somebody, the first priority is to the banks that gave them the money. There will be pressure on Veritas first to optimize operations and then rationalize their product line, because having two products is not optimal. They have one product [Backup Exec] for midsize, and another [NetBackup] for large enterprises, but Backup Exec is already facing uncertainty in the market. Customers will ask, "Should I invest in Backup Exec, should I buy more licenses, or look for an alternative?" I think that's playing in our favor.

Is Veeam Availability Suite competing more against NetBackup as you go more toward the enterprise?

Timashev: We're starting to compete more with NetBackup. Traditionally, we focused on the midrange and medium businesses, but in the last two or three years we've been adding enterprise features and gradually changing our message. Eight years ago, we were saying we're the number one VMware backup. Now we don't use the word backup, we don't use the word VMware, we use the word availability because it's about continuous availability of IT services, applications and data. Enterprise customers need availability 24/7. It used to be from 9 to 5, now it's 24/7.

In medium enterprises and with SMBs, we still compete with Backup Exec because it has so much market share there. But our primary competitors in the enterprise would be NetBackup, Commvault and sometimes EMC Avamar. That's who we compete with the most in the enterprises, and we are primarily replacing legacy installations products like IBM, EMC NetWorker or [HPE].

How does the Dell-EMC deal affect Veeam?

Timashev: There have been reports that Dell has hired bankers to sell off $10 billion in assets, and they're talking about selling off AppAssure and Quest Software. The Quest products include vRanger, NetVault and the Recovery Manager products. Why would a customer invest in more licenses or upgrade to a new version if the roadmap is not clear? EMC has two backup products -- NetWorker and Avamar -- Quest has three, plus AppAssure. A customer can't be sure which products will survive.

You say Veeam is on track to do $1 billion in revenue by 2018, and that you're profitable. Are there any plans to go public?

Timashev: We are not planning an IPO [initial public offering]. We are very profitable. We don't have venture capitalists, so we don't have any pressure from investors in terms of an exit. We have a stock option plan for employees, so we don't have the usual reasons to do an IPO.

Normally, you IPO because you need liquidity for your employees and executives, and you have venture capitalists. We don't have those reasons to do an IPO. I always joke that the third reason to go IPO is for the founder to be on the cover of Forbes or Fortune. But my partner [Andrei Baronov] is a private person and doesn't want to be on the cover of a magazine.