About 13 years ago, CommVault Systems introduced its signature
software product, called Simpana, and continues to disrupt older
players in the business of data management.
Simpana is deployed by companies large and small to gain
greater efficiency with how they store, manage and retrieve
information. Data management has become increasingly complicated
with the mass proliferation of computing devices over the past
decade. Top providers of this technology that CommVault threatens
) andSymantec (
"We are grounded in the belief that we have to out-innovate
everyone else," said David West,CommVault 's (
) senior vice president of marketing and business development.
"We are laser focused on delivering innovative solutions that
allow us to stay a step ahead."
The need for innovation was amplified by the emergence of
several major trends in computing that include virtualization,
cloud computing, Big Data and the explosion of mobile devices
over the past decade.
With these new forms of computing, businesses can run more
efficiently. But it also generates vast amounts of new
information. The data need to be stored and archived, but also
retrieved at a moment's notice, in more efficient ways.
CommVault develops, markets and sells a suite of software
applications and services across the U.S. and Europe, Australia
and Asia. Simpana software manages the data across the entire
business enterprise, from data centers to the furthest regions
where employees work. CommVault says its customers can slash the
cost of protecting, managing, analyzing and recovering data by up
to 50% compared with older platforms.
"In the past, businesses would deploy multiple products in
various areas with different kinds of applications," said West.
It can be difficult to manage and scale all that data.
"What we did is aggregate all this onto a single platform that
gives you a view of all your information," he said.
The results of that innovation are in the numbers. The company
has strung together 12 straight quarters of double-digit revenue
growth and nine straight quarters of double-digit increases in
earnings per share.
In its fiscal second quarter for the period ended Sept. 30,
revenue rose 21% to $118.2 million as EPS rose 58%, both powering
past expectations. Since CommVault posted results Oct. 29,
company shares are up 26%. For the year, shares are up more than
For its fiscal 2013 year, consensus estimates among analysts
polled by Thomson Reuters look for revenue of $482 million, up
19% for the year, but a deceleration from growth of 29% in the
prior year. But it's the 11th year in a row of double-digit
gains. The double-digit growth compares with industrywide growth
in the single digits, of about 6% annually.
"CommVault has pushed the envelope of legacy technology," said
Rachel Dines, a technology analyst at Forrester Research. "They
developed robust software tools that can manage many different
platforms in ways that are simple and easy."
Revenue is split nearly 50-50 between software and services.
The software manages traditional data backup, recovery and
search. It can also manage data in virtualized environments and
another emerging arena called de-duplication.
In August 2010, the company released its current version,
Simpana 9. The next major software upgrade is coming in the first
half of 2013.
Though relatively small when compared with IBM, HP, EMC and
Symantec, CommVault has advantages, said Robert Amatruda, an
analyst with research firm IDC.
"Even though they are a small player in a mature market, their
technology is rock solid," Amatruda said. "They have an enhanced
ability to bring newer products to market whereas the legacy
players are slower to change."
CommVault has partnerships withDell (DELL),NetApp (NTAP),
Hitachi Data Systems and Fujitsu, among others. Its partnership
with Dell accounted for 21% of revenue in the last quarter.
Recently, though, Dell acquired Quest Software, a CommVault
competitor, and has been aggressively marketing that software
solution into the small- and medium-size segment of the business
"We continue to view Dell as a big distribution partner," said
West. With Dell's acquisition of Quest he said, "Dell has
products at the lower end of the market that are not competitive
CommVault continues to feel that its products are highly
different than Dell's offerings and have only limited impact.
Amatruda sees things differently. He thinks Dell could indeed
pose a competitive threat to CommVault with its new forays into
the data management market. But concerns that Dell still accounts
for a big chunk of company revenue are lightened by the ongoing
growth of new customers.
"Every quarter, CommVault continues to add new and larger
customers. They have forged some key relationships," said
In the last quarter, CommVault added 480 new customers for a
total of 17,100. That's up from 13,500 customers as of April
CommVault also faces the risk that any of its giant
competitors could make a bold move that strikes at the core of
its key software advantages.
"We live and think every day of the competitive threats," said
CommVault CEO Robert Hammer, in a conference call with
analysts after the company posted quarterly results on Oct. 29,
said: "Our overall funnel and big deal pipeline growth indicate
continued demand for our products in the December quarter."