After a strong year of growth in 2013, disaster recovery firm Zerto has expanded into the Asia Pacific (APAC) region, recently opening an office in Sydney, Australia. Attracted in large part by the degree of virtualization and cloud adoption in Australia, Zerto decided to focus its effort there first, with an eye toward broadening into the large and diverse APAC market.
2013 was a "breakthrough year" for Zerto, in the words of CEO Ziv Kedem. Zerto achieved 200% revenue growth and a 400% increase in customers, and also has 250 channel partners and 100 cloud service providers in its ecosystem.
"Our sweet spot," said Zerto VP of Global Sales Paul Zeiter in a recent interview, "is business continuity and disaster recovery for SMB and large enterprise customers that have critical applications that they use to run their business on."
"We came to market in the third quarter of 2011," said Zeiter, "and as is typical we put a lot of focus into the US market -- to understand what kind of customer adoption we had, and what traction we would get in the marketplace. So we proved that out in the 2012 time frame. In 2013, we doubled our US footprint." He added that 80% of Zerto's revenue through 2013 was from the US market.
Zerto's first international expansion was into Europe, where they opened a UK office and added salespeople in the UK and Germany. With a "virtual go-to-market strategy" they began to build traction in Australia, New Zealand, and Korea. They currently have two salespeople working out of Australia.
"What drew us to Australia," said Zeiter, "was the fact that is it is highly virtualized on VMware from the standpoint of enterprise customers, the 'sweet spot' that we sell to. Even though today most major enterprises have gone virtual, and have more than 80% of their environments virtualized, if you did the analysis you would find that Australia is even further down that route." (Zerto's solutions are at present built on VMware technology.)
Zeiter added that: "Australia is an easy country for us to get into, in terms of language. As you start to look at Japan and China, localization and documentation of the product is a greater investment. So this is a place that we knew we would have early adoption from channel partners."
"The other thing that Australia is leading in," said Zeiter, "is adoption to the cloud. They are also early adopters in terms of Infrastructure as a Service (IaaS), and they tend to be thought leaders as well as actual execution leaders in that space."
Due to the initial traction, said Zeiter, "we really want to double down and build some physical presence in the region. And so Australia and New Zealand are the primary focus, and in the second half of 2014, we will look to add additional headcount, and start focusing on the greater China market and Japan."
"In terms of the market opportunity," in APAC, added Zeiter, "it is massive. You could land anywhere and be very successful. As you can appreciate, there is a certain discipline you need to have to stay focused enough to really drive and prove out markets and not spread yourself too thin, which is exactly what we're doing in terms of planning first in Australia, where we know can drive very strong business, and then from there continuing to grow and expand."
Also on the call with TechRepublic was Jennifer Gill, Zerto's Director of Product Marketing. While speaking with customers in the APAC region, she gained insights into the costs they incur to acquire bandwidth and infrastructure.
"I hear a lot from our international customers," said Gill, "including Australia and New Zealand, about how expensive bandwidth is, and acquiring assets. It seems like it's more expensive and more challenging to do that from a cost perspective."
Commenting on Zerto's solution, Gill added that "from a virtualization perspective that makes things a lot nicer in terms of ROI and utilization. If you're looking at something like array-based replication, it requires quite a significant pipe, and they just can't go that route, they can't afford the infrastructure."
"And then they look at Zerto," said Gill, "which requires minimal bandwidth, doesn't require a matching infrastructure, and they can use whatever they want. We see our cloud channel working there. If a client can use a low bandwidth option and get replication to another point, then that cloud provider can really leverage economies of scale, making things more cost-effective."
With most of its business centered in the US, Zeiter said that their "goal is to move within the next few years to roughly 40% USA, 40% EMEA (Europe Middle East Africa), and 20% of our revenue coming out of the APAC region. That's what we believe is very achievable, and one that we believe gives us a very strong, solid balance on a global basis with our business as well."
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Brian Taylor is a contributing writer for TechRepublic. He covers the tech trends, solutions, risks, and research that IT leaders need to know about, from startups to the enterprise. Technology is creating a new world, and he loves to report on it.