VENDOR PROFILE. PHD Virtual Simplifying Data Protection for Virtual Environments IDC OPINION IN THIS VENDOR PROFILE

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1 VENDOR PROFILE PHD Virtual Simplifying Data Protection for Virtual Environments Robert Amatruda Ashish Nadkarni IDC OPINION Global Headquarters: 5 Speen Street Framingham, MA USA P F PHD Virtual is a provider of virtualization backup and monitoring for physical, virtual, and cloud environments. The company has been experiencing rapid expansion in the past several years as customers embrace server virtualization and need costeffective, scalable tools to safeguard and monitor their burgeoning virtual infrastructure. However, PHD Virtual must contend with large incumbent vendors in the data protection and recovery software market that offer products for both physical and virtual backup and protection. Many of the large and well-capitalized incumbent vendors have been late to market to address the virtualization needs of customers. As a result, PHD Virtual has been able to target customers that are using prevailing data protection and recovery tools from existing vendors and a new set of smaller customers that have not invested in the legacy products or infrastructure. Today, PHD Virtual brings a well-seasoned management team with data protection, virtualization, and systems management to position the company for more growth opportunities. The management team continues to focus on R&D, developing volume and indirect sales channels, as well as a simplified user experience, offering customers a strong value proposition for virtual backup and monitoring. Findings include: IDC expects PHD Virtual will continue to enjoy new growth opportunities, especially in larger customer accounts with hundreds of VMs that need easy-touse, scalable, and cost-effective tools to protect and monitor their growing virtual infrastructure. IDC believes PHD Virtual's virtual backup appliance (VBA) deployment model provides customers more flexibility than other solutions that require agents, additional options, or licenses. PHD Virtual provides key differentiators from incumbent solutions such as true multi-hypervisor support and requires no physical servers or OS licenses. IN THIS VENDOR PROFILE This IDC Vendor Profile discusses the firm PHD Virtual Technologies and its virtualized data protection solutions. In addition, this document examines PHD's supplier profile and strategy as well as some of the challenges PHD could encounter as it tries to differentiate itself in a market that is getting increasingly competitive. Filing Information: October 2012, IDC #237501, Volume: 1 Storage Systems: Vendor Profile

2 SITUATION OVERVIEW Company Overview PHD Virtual was founded in 2005 by a team experienced in developing enterprise infrastructure technology. Today, PHD has more than 4,500 customers and more than 500 partners worldwide. The company claims that its customer base is growing at an average rate of 40% per year. This is an impressive rate of growth in the highly competitive data protection for virtual environments market featuring well-established incumbents as well as start-ups. Today, PHD Virtual's product portfolio consists primarily of two "virtual" suites: Virtual Backup (PHD's data protection suite) and Virtual Monitor (PHD's end-to-end monitoring suite): Virtual Backup: The Virtual Backup suite is powered by the virtual backup appliance architecture that PHD introduced in Based on a Linux platform, the virtual backup appliance architecture one of the first in the industry is a software-based backup recovery solution that runs inside a virtual machine. This means that there are no management servers, data, or proxy servers, making the solution one of the few in the market that can boast of a zero physical footprint. PHD Virtual offers the Virtual Backup suite for Citrix and VMware currently and will support Microsoft Hyper-V in the coming year. The simplicity and scalability of the VBA architecture allow customers to easily and cost effectively protect their virtual environment. Furthermore, the VBA architecture is a key differentiator from competitive solutions currently in the market. Virtual Monitor: PHD Virtual also sells Virtual Monitor, an end-to-end monitoring suite for physical and virtual environments. In addition, the Virtual Monitor solution provides multi-hypervisor visibility. Customers that deploy Virtual Monitor can ensure availability of their business-critical applications, obtain a complete end-to-end view of their entire infrastructure, manage and maintain SLAs, and monitor their entire IT environment from a single dashboard. Company Strategy Unlike its competitors, PHD Virtual has pursued a multi-hypervisor support strategy from the outset. This has allowed PHD to design its solution to be easily portable across multiple hypervisors without much platform reengineering. Today, PHD offers its solution for Citrix and VMware hypervisors and is working on supporting Hyper-V in the next year. PHD Virtual's Linux-based architecture allows the company's solution to run inside a virtual machine on any hypervisor. Additionally, support for other hypervisors can be easily and quickly added. This is an important and key differentiator for PHD Virtual especially given that the hypervisor market is increasingly becoming commoditized and vendors such as Citrix and Microsoft chip away at the market dominance of VMware. As a result, IDC is seeing more customers considering or adopting multi-hypervisors. IDC has discovered that customers are changing their hypervisor deployment model to control licensing costs and limit their reliance on a single vendor solution. PHD Virtual offers customers a fully virtualized data protection suite that supports multiple hypervisors. In the year ahead, PHD Virtual will support all three major hypervisor vendors within a single centralized 2 # IDC

3 interface. This allows customers greater flexibility and the ability to lower operational costs. Furthermore, customers can reap the benefits of a multi-hypervisor-based compute infrastructure. PHD Virtual has ensured that its Virtual Backup and Virtual Monitor solutions remain attractive from initial acquisition and provide customers measurable cost savings from ongoing operations. This is in stark contrast to other competitors in the market incumbents and start-ups alike. We believe PHD Virtual provides the following differentiators compared with its competitors for the following reasons: Solutions from well-established, larger incumbent vendors are expensive to procure, install, and maintain. Furthermore, their licensing models are an expensive proposition when deployed in multi-hypervisor environments. Many customers have very finite or limited budgets for data protection and need scalable, cost-effective solutions that can accommodate future growth. Solutions from smaller competitors may have an attractive price point, but they offer limited hypervisor support. As a result, customers are forced to deploy multiple point-oriented solutions typically, one for each hypervisor. There are a limited number of vendors that offer comprehensive support for multiple hypervisors. However, longer term, it is difficult to provide additional hypervisor support because of the architectural limits of their code base and long development cycles. Incumbent and small vendor solutions may require additional physical hardware, which is not fully factored into the overall cost of ownership. Also, customers must grapple with performance and scalability when adding physical hardware. Customers must ensure that the solution meets the changing size of the virtual environment. FUTURE OUTLOOK Data protection and recovery solutions for virtual environments have become a commoditized and fiercely competitive market. The large incumbent data protection and recovery vendors initially missed the virtual protection opportunity and are still playing catch-up. This opened the door for smaller, more adroit vendors with a singular focus on virtual data protection to exploit the missed opportunity of the incumbent vendors. However, both groups do not support a multi-hypervisor deployment model like PHD Virtual. Increasingly, customers are supporting multiple hypervisors in the same environment. Hypervisors from vendors like Citrix and Microsoft will continue to gain market share and will reside side by side with VMware vsphere/esx hypervisors. In this rapidly changing landscape, vendors with a platform that is designed from the ground up to support multiple hypervisors have the potential to stay ahead of the game. We believe PHD Virtual brings a good measure of flexibility to highly virtualized customer environments. PHD Virtual provides a scalable, cost-effective approach for data protection and recovery solutions as well as end-to-end monitoring of virtual infrastructure IDC #

4 ESSENTIAL GUIDANCE Advice for PHD Virtual The next wave of server virtualization has started in earnest as businesses have begun virtualizing their mission-critical environments. In support of such initiatives, businesses are increasingly becoming multi-hypervisor shops seeking to deploy bestof-breed solutions for their mission-critical environments. Inadvertently, they have raised the bar on data protection solutions that offer feature parity between supported hypervisors. It is no longer good enough to support one or two hypervisors with different feature sets; rather, customers demand a common set of features for all hypervisors deployed. Furthermore, businesses increasingly demand that solutions be entirely virtualized, thus minimizing infrastructure investments as they move from a capex to an opex model. Given these trends with respect to virtualization, we believe it's sound and prudent advice for PHD Virtual to do the following: Accelerate support for other hypervisors like Microsoft Hyper-V, Red Hat KVM, and Oracle VM and offer full feature parity between traditionally supported offerings and the offerings being introduced. Continue to build, expand, and maintain a partnership-driven go-to-market model in order to maintain a lead over competitors which include smaller peers as well as the well-established incumbents that already have a fully built-out partner ecosystem. Provide a seamless user experience across multiple hypervisors, ease of deployment, and zero physical footprint. PHD Virtual will also be helped by getting certified at the highest levels from the respective hypervisor vendors and using that certification to further expand its partner base. LEARN MORE Related Research Worldwide Data Protection and Recovery Software Forecast and 2011 Vendor Shares (IDC #235879, July 2012) IDC's Software Taxonomy, 2012 (IDC #235401, June 2012) Worldwide Data Protection and Recovery Software 2010 Vendor Shares: Virtualization, Deduplication, and Competitive Conversions Impacting Market (IDC #229393, July 2011) 4 # IDC

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