CommVault Systems wants to have a lock on data management. The company provides software, including cloud-based programs, that customers use to store and manage enterprise data. Its CommVault Data Platform (formerly known as Simpana) handles resource management, backup, archiving, data replication, disaster recovery, and search. Altogether CommVault counts more than 22,500 customers that come from industries such as financial services, health care, manufacturing, and utilities, as well as from the public sector. CommVault's strategic partners include systems integrators and professional services firms, distributors and resellers, and technology providers. More than 40% of its revenue comes from outside the US.
CommVault's service operations account for 57% of revenue with software providing the rest.
CommVault operates from 20 offices in the US. It has another 40 locations scattered across the Americas, Asia, and Europe. The US, however, is its largest market, accounting for almost 58% of sales. The company doesn't break out sales any other countries.
Sales and Marketing
CommVault primarily uses a direct sales force to sell CommVault Data Platform software to businesses and government agencies of all sizes. Partnerships are also an essential component of its sales strategy. Companies such as Dell, Hitachi Data Systems, and NetApp resell CommVault software and in some cases incorporate the software into their own hardware. In addition, CommVault's agreement with distributor Arrow Electronics includes sales to the US federal government and provides around 38% of sales.
About eight years of continuous revenue growth for CommVault ended in 2016 (ended March) when the company reported a 2% drop. Sales for 2016 were $595 million, down from $607 million in 2014. While service revenue rose 12% in 2016, software sales dropped 9% because of weaker enterprise sales. CommVault had fewer contracts from from big companies in 2016 and average revenue from contracts was lower. International sales were4% lower in 2016, wiping out about $10 million in revenue. The company said currency exchange rate fluctuations reduced revenue from Europe.
The company's profit plunged 99% to $136,000 in 2016 from $26.6 million in 2015. CommVault built up its sales staff during the year, which added more than $16 million in expenses. Sales and marketing expenses as a percentage of revenue rose to 59% in 2016, compared to 55% in 2015.
Cash flow from operations dropped to $84 million in 2016 from $124 million in 2015.
CommVault has made a commitment to provide cloud-based software and services that are compatible from providers such as Amazon's Amazon Web Services and Microsoft's Azure. The company aggressively added to its sales staff to bring customers on board its cloud move and it changed its revenue model to one that's more based on subscriptions.
The company was founded as an independent segment of Bell Laboratories in 1988; senior management (backed in part by funding from Sprout Group) purchased the company's assets from Lucent Technologies in 1996.