SaaS backup supplier Druva has passed $200 million in annual recurring revenue, with co-founder and CEO Jaspreet Singh claiming it’s “the first (and only) 100 percent SaaS data resiliency platform to reach this milestone.” [See bootnote below.]
Update: N-able and Druva subscription differences explained by Druva. 8 Sep 2023.
The company’s Data Resiliency Cloud is a cloud-native backup-as-a-service offering based on AWS’s cloud infrastructure. It provides protection for SaaS applications, public and private cloud environments, and end-user devices. Druva sells its product itself and through Dell EMC as PowerProtect and in APEX Backup Services. It announced a $10 million SaaS data protection service warranty in August last year. The company has more than 5,000 customers, growing by 30 percent in the last year.
Singh writes: “In an era where evolving cyber threats shape the global IT landscape, Druva has proven itself as a disruptive force driving industry change and a more secure future.”
He says SaaS backup is better than purchased backup software because “Druva customers do not have to think about procuring backup hardware and managing supply chain issues. They do not have to spend weekends ensuring their hundreds of appliance nodes are patched with security updates, and they don’t have to worry about scaling their infrastructure to protect new applications.”
Commvault’s Metallic SaaS data protection service had a $113 million ARR last month from almost 4,000 customers – $28,250 per customer compared to Druva’s $40,000 per customer.
Competitor HYCU reported having more than 3,000 customers at the start of 2022, and passed the 3,200 mark in June of that year. Its ARR number hasn’t been revealed.
Druva has launched an MSP program, which Singh says “has now grown by nearly 300 percent annually.”
We note that N-able, which also supplies backup-as-a-service through MSPs, recorded $106.1 million revenue in the second 2023 quarter, giving it a $424 million annual revenue run rate. Druva’s $200 million number is for its annual recurring revenue. [See below for adiscission of Druva and N-able’s subscription revenues.]
Druva intends to harness AI to “enable users to improve backup operations with automation, efficiency, and simplicity while reducing threat response and recovery time through trend analysis and orchestration.” CTO Stephen Manley writes: “We will further incorporate AI into Druva’s platform to take the next step towards autonomous backups, which will deliver the simplicity, efficiency and proactive security that will revolutionize data protection.”
The company is also intending to expand from AWS with Azure protection. Azure and AI announcements are said to be coming soon.
Druva was founded in 2008 and has raised $475 million through eight funding rounds, the latest one for $147 million in 2021. It made the shift from selling backup software licenses to a SaaS business model in 2013 and now carries out more than 6 billion backups annually, managing more than 275PB of data.
Update – Druva and N-able
We asked Druva some questions about its positioning vs N-Able and Druva CFO Druva CFO Mahesh Patel provided an explanation of relevant terms and phrases in Druva’s blog and release.
First and Only 100% SaaS Data Resiliency Platform
N-Ables’ PRIMARY business is MSP Remote Monitoring and Management and they also offer security with EDR and DNS filtering. They do not disclose the breakdown of their revenue across these services and backup, but of note, there is no mention of storage in any financial filings and cloud hosting costs are their second highest COGs item behind technical support personnel. From our view of SaaS data protection, customer storage/cloud hosting costs would be the highest component of COGs, but it is not for N-Able. Our read is that MSP Remote Monitoring and Management is a dominant portion of their ARR and validates our position.
SaaS versus Subscription
We believe SaaS is materially different than Subscription ARR. SaaS in our view is outcome driven, which means we provide a turn key solution which includes the storage as well as the automation (patching, upgrades, etc.) at a predictable price. Providing software for a customer to deploy on existing hardware is subscription, but not SaaS. In these cases, when the hardware depreciates or fails, the software gets replaced.
Please note the highlighted language from N-Ables SEC Filed 10-K below which states that a portion of revenue is “self-managed” by their customers. While they recognize this revenue upfront in the “subscription revenue” line item, they ratably recognize the maintenance portion for these customers in subscription revenues. SaaS companies do not have a separate maintenance components. Also, below is a picture from N-able’s website offering customers an option to deploy on existing storage. Based on the notes in the financials a minimum of 20% of their revenue is “self-managed.
N-able note
“Subscription Revenue. We primarily derive subscription revenue from the sale of subscriptions to the SaaS solutions that we host and manage on our platform. Our subscriptions provide access to the latest versions of our software platform, technical support and unspecified software upgrades and updates. Subscription revenue for our SaaS solutions is generally recognized ratably over the subscription term once the service is made available to the MSP partner or when we have the right to invoice for services performed. In addition, our subscription revenue includes sales of our self-managed solutions, which are hosted and managed by our MSP partners. Subscriptions of our self-managed solutions include term licenses, technical support and unspecified software upgrades. Revenue from the license performance obligation of our self-managed solutions is recognized at a point in time upon delivery of the access to the licenses and revenue from the performance obligation related to the technical support and unspecified software upgrades of our subscription-based license arrangements is recognized ratably over the agreement period. We generally invoice subscription agreements monthly based on usage or in advance over the subscription period on either a monthly or annual basis.”
Bootnote
A Druva spokesperson told us: “Our “first and only” was specifically intended to describe our “100% Saas Data Resiliency platform” not $200ARR.”
