Commvault Systems, Inc. (CVLT): 5 FORCES Analysis [Nov-2025 Updated]

You're looking at Commvault Systems, Inc. right now, trying to map out where the rubber meets the road after their big pivot to cyber resilience and SaaS. Honestly, the numbers for fiscal year 2025 tell a story of progress but also intense pressure: with $996 million in revenue and subscription revenue hitting $590 million-that's a solid 37% jump-and Annualized Recurring Revenue reaching $930 million, they've definitely got traction with their over 12,000 enterprise customers. But, as you know, this market is a warzone against cloud giants and agile rivals, so understanding the true competitive friction-from supplier leverage to customer power-is key to valuing their next move defintely. Dive into the five forces breakdown below to see the precise risks and opportunities we're tracking.

Commvault Systems, Inc. (CVLT) - Porter's Five Forces: Bargaining power of suppliers

When you look at the suppliers for Commvault Systems, Inc., the picture is dominated by the massive cloud providers. These hyperscalers-Amazon Web Services (AWS), Microsoft Azure, and Google Cloud-are definitely key suppliers, especially as Commvault pushes its cloud-first strategy. For the fiscal year ended March 31, 2025, Commvault Systems, Inc. posted total revenues of $996 million, with subscription revenue hitting $590 million. That's a solid business, but when you stack it against the global cloud infrastructure market, where spending hit $107 billion in the third quarter of 2025 alone, Commvault is a relatively small customer in the grand scheme of things.

Still, the power dynamic here leans toward Commvault Systems, Inc. being the buyer, not the seller. Here's the quick math on why: while AWS held a 29% market share and Azure 20% in Q3 2025, Commvault's proprietary platform development, including strategic moves like acquiring Clumio, an expert in S3 and AWS workloads, helps them avoid being locked into one provider's pricing structure. This ability to shift workloads or leverage multi-cloud environments is what gives them leverage.

The supplier power is assessed as LOW for a few core reasons related to Commvault Systems, Inc.'s scale within its specific purchasing category and its platform strategy. You can't just walk away from the Big Three-they control over 60% of the global cloud market-but Commvault's scale within its own spend allows for strong negotiation on the unit cost of cloud storage and compute. Furthermore, the sheer number of alternative hardware and software component vendors available across the broader IT infrastructure landscape means that for non-hyperscaler components, Commvault Systems, Inc. retains significant leverage.

Here is a look at the scale difference between Commvault Systems, Inc. and the cloud giants:

The reduction in reliance on any single technology partner is a deliberate strategy. Commvault Systems, Inc.'s unified platform is designed to abstract the underlying infrastructure. This architectural choice means that while they use the hyperscalers extensively, their proprietary software layer acts as a buffer. If onboarding takes 14+ days, churn risk rises, but having a platform that spans multiple clouds means you aren't held hostage by one vendor's price hikes or service changes. It definitely helps maintain negotiating parity.

The supplier power is further diluted by the competitive nature of the underlying component market, which includes:

• Alternative storage hardware manufacturers.
• Multiple operating system and virtualization software providers.
• A wide array of specialized security and identity management tools that integrate with the platform.

Finance: draft 13-week cash view by Friday.

Commvault Systems, Inc. (CVLT) - Porter's Five Forces: Bargaining power of customers

When you look at the data protection landscape, the bargaining power of Commvault Systems, Inc.'s customers is definitely on the higher side. This isn't just a feeling; the market structure backs it up. You have a crowded field of strong, direct competitors like Rubrik, Veeam, Cohesity, and Dell, all vying for the same enterprise budget dollars. In Gartner's 2025 Magic Quadrant for Backup and Data Protection Platforms, Rubrik, Veeam, and Commvault Systems, Inc. are all grouped in the top leaders quadrant, which means customers have real, viable alternatives to choose from.

Still, Commvault Systems, Inc. has managed to build some friction into the exit process. The company ended its fiscal year 2025 with over 12,000 subscription customers, a base that is clearly invested in the platform. For these customers, the migration to subscription models is intended to create stickiness, meaning the cost and complexity of switching vendors-the switching cost-should be high. The fact that contract durations are now trending toward 2.5 years suggests that, for a significant portion of the base, Commvault Systems, Inc. is successfully locking in revenue streams and increasing the immediate cost of switching away.

Here's a quick look at the financial commitment you are seeing from that customer base:

Because IT budgets are under constant scrutiny, especially in a tighter macro environment, customers are naturally demanding competitive pricing and flexible terms. This is where the competitive pressure really shows up. For instance, while Commvault Systems, Inc. is seeing strong adoption, some analysts note that its cloud pricing is often perceived as expensive when compared directly to competitors like Veeam Data Platform, which is valued for its competitive pricing. This dynamic forces Commvault Systems, Inc. to continuously prove the value proposition of its cyber resilience focus to retain and expand those contracts.

The strong financial uptake, however, shows that for many, the value is there. The shift to recurring revenue is undeniable, with subscription revenue growing 37% to reach $590 million for the full fiscal year 2025. This adoption rate is a direct counter-signal to high customer power, as it shows customers are willing to commit to the subscription model, even if they are simultaneously pushing for better commercial terms.

You should keep an eye on these specific customer leverage points:

• Direct competition from Rubrik and Veeam remains fierce.
• The customer base now includes over 12,000 subscription accounts.
• Contract lengths are extending, trending toward 2.5 years.
• Subscription revenue hit $590 million in FY2025.
• Pricing sensitivity is high due to budget scrutiny.

Finance: draft 13-week cash view by Friday.

Commvault Systems, Inc. (CVLT) - Porter's Five Forces: Competitive rivalry

You're looking at a market where the fight for every dollar is fierce, and honestly, the pressure is only going up. The competitive rivalry facing Commvault Systems, Inc. is definitely INTENSE. This isn't just about old guard versus new; it's a full-spectrum battle for cyber resilience leadership.

The rivalry is driven by well-funded, cloud-native players like Cohesity and Rubrik, who are pushing hard on modern workloads. Still, you can't ignore the established giants. Dell Technologies with PowerProtect and Veritas NetBackup are still competing for those massive legacy accounts where switching costs are high. This dual pressure-from nimble newcomers and entrenched incumbents-means Commvault has to execute flawlessly.

The market itself is mature, but the pivot to cyber resilience is accelerating everything, making innovation the key differentiator. Commvault is maintaining a strong foothold, evidenced by its placement as a Leader in the 2025 Gartner Magic Quadrant for Backup and Data Protection Platforms for the 14th consecutive time. That's serious staying power in a sector that changes this fast. However, this leadership is constantly challenged by the need to out-innovate competitors in areas like ransomware recovery.

The sheer size of the recurring revenue pool shows you what's at stake in this rivalry. Commvault Systems, Inc. finished Fiscal Year 2025 with Total Annualized Recurring Revenue (ARR) reaching $930 million, marking a 21% year-over-year increase. By the second fiscal quarter of 2026, that figure had already accelerated to $1.043 billion, up 22% year/year.

Here's a quick look at the financial scale Commvault is defending and growing within this competitive environment:

The shift to subscription is a direct response to market demands, and it's where the rivalry is sharpest. Subscription ARR for FY2025 hit $780 million, representing 84% of the total ARR. By Q2 FY2026, the SaaS ARR component alone reached $335.7 million, growing 56% year-over-year, showing where the growth-and the competitive focus-is centered.

The competitive pressure manifests in specific product areas, too:

• Commvault Cloud platform underpins the 2025 Gartner Leader placement.
• Innovations like Active Directory Forest Recovery are critical defenses.
• Identity and data security offerings grew double-digit sequentially.
• These security offerings represented nearly 40% of net new ARR in Q1 FY2026.
• The company surpassed 13,000 subscription customers as of September 30, 2025.

If onboarding takes 14+ days, churn risk rises, especially when competitors offer faster deployment models. Finance: draft 13-week cash view by Friday.

Commvault Systems, Inc. (CVLT) - Porter's Five Forces: Threat of substitutes

You're analyzing the competitive landscape for Commvault Systems, Inc. (CVLT) and the threat from alternatives is a key area. Honestly, the substitutes aren't a single, monolithic threat; they come in different flavors, from hyperscaler tools to DIY setups.

The threat is definitely MEDIUM from cloud provider native tools, like AWS Backup, which serve as a 'good enough' option for some workloads. As of November 2025, in the Cloud Backup category, AWS Backup holds a 3.0% mindshare based on user engagement data, which is down from 3.3% the prior year. Commvault Cloud, by comparison, maintains a larger 8.6% mindshare, though it also saw a slight dip from 9.6%. To be fair, AWS Backup scores a perfect 10.0 for ease of use, while Commvault Cloud scores 7.8. However, Commvault Cloud supports 98% of typical requirements out-of-the-box, compared to AWS Backup's 84.3% support. The analyst rating reflects this gap, with Commvault Cloud at 86 versus AWS Backup at 83.

Array-based backup and replication tools still exist, offering basic data protection, especially for environments that are heavily on-premises or have very specific, limited use cases. These tools often lack the broad workload compatibility that enterprises now demand. Commvault has actively countered this by expanding its portfolio, for instance, acquiring Clumio in October 2024 to bolster cloud data protection, showing they are focused on covering more than just legacy or single-vendor hardware solutions.

In-house, open-source data management solutions present a low-cost alternative, particularly for smaller firms or those with highly specialized internal expertise. This is a classic price-based substitution threat. Commvault counters this by emphasizing its Total Cost of Ownership (TCO), claiming the lowest TCO for its cyber resilience platform. The success of their subscription shift suggests customers are willing to pay a premium for unified management and resilience features, as evidenced by the full fiscal year 2025 guidance projecting Subscription ARR growth between 28% and 30% year over year.

Commvault's unified platform for hybrid cloud is the primary mitigation strategy against these substitutes, as it aims to cover diverse workloads under one umbrella. This is critical because 86% of enterprises are now operating in multi-cloud environments as of November 2025, and 54% of enterprises use hybrid cloud for mission-critical workloads in 2025. Commvault's platform strength in this area is validated by industry recognition; they were ranked highest in the Hybrid and Multicloud Use Cases in the 2025 Gartner Critical Capabilities for Backup and Data Protection Platforms report. This unified approach helps justify their position, especially as their Total ARR reached $889,628 (in thousands, or approximately $890 million) by the end of Q3 FY2025.

The market reality is that 86% of enterprises are now multi-cloud, which forces a need for solutions that span environments, a core strength Commvault emphasizes with its platform recognized by Gartner for Hybrid and Multicloud capabilities.

Commvault Systems, Inc. (CVLT) - Porter's Five Forces: Threat of new entrants

You're looking at the barriers to entry for new players in the data resilience space, and honestly, the picture for Commvault Systems, Inc. is mixed, leaning toward protection for now. The threat level here settles at MEDIUM.

The capital required to compete at scale is substantial. Look at Commvault Systems, Inc.'s own investment: their Research and Development Expenses for the twelve months ending September 30, 2025, hit $0.159B (or $159 million). For context, the median private B2B SaaS company spends 22% of its Annual Recurring Revenue (ARR) on R&D as of early 2025. Commvault Systems, Inc.'s full fiscal year 2025 total ARR was $930 million, meaning their R&D spend was roughly 17.1% of that ARR, which is below the median but still a massive absolute number for a startup to match while building a product portfolio. Building that level of trusted brand recognition, which translates to a total ARR of $1,043 million as of Q2 Fiscal 2026, takes years and significant customer validation.

Regulatory hurdles definitely raise the cost of entry, especially for those targeting the financial sector. The Digital Operational Resilience Act (DORA), which became effective on January 17, 2025, forces compliance across the ICT supply chain. For many businesses in scope, compliance costs have already soared past €1m ($1.02m) over the preceding 24 months. New entrants must immediately factor in the cost of building systems that can withstand potential fines of up to 2% of global annual turnover for non-compliance, or even €5 million if deemed a critical third-party ICT provider.

Still, the agility of cloud-native startups presents a persistent, targeted risk. These new entrants often boast structural advantages; for instance, cloud-native companies report 60% lower IT costs and achieve 2.5x faster feature deployment compared to those on traditional infrastructure. While Commvault Systems, Inc. is heavily invested in its cloud platform, a well-funded, niche competitor can move fast. Consider the funding environment: in December 2024, a major data platform competitor raised $10 billion in Series J funding, pushing its valuation to $62 billion. That kind of war chest allows for aggressive, niche market penetration.

The difficulty in replicating established enterprise relationships acts as a strong moat, defintely. New entrants must overcome long, complex enterprise sales cycles. Commvault Systems, Inc.'s Customer Acquisition Cost (CAC) payback period was 37.8 months in the second quarter of calendar year 2025, indicating the time and investment required to secure and monetize a new enterprise customer. Breaking into existing procurement processes and displacing incumbent solutions is a slow, expensive grind for any newcomer.

Here is a quick look at the financial and cost barriers:

The barriers to entry are reinforced by the following structural elements that new entrants struggle with:

• High upfront capital for R&D, like Commvault Systems, Inc.'s $159 million TTM R&D spend.
• The need to meet strict regulatory frameworks like DORA, effective January 2025.
• Long enterprise sales cycles, evidenced by a 37.8 month CAC payback.
• The time required to build a brand that supports over $1 billion in total ARR.
• The need to integrate across complex hybrid and multi-cloud environments.

Finance: draft 13-week cash view by Friday.