Carbonite (CARB) has acquired Data Castle, continuing a string of niche buyouts that align with Carbonite CEO Mohamad Ali's vision across backup, disaster recovery and high availability solutions in the SMB sector. The deal gives Carbonite new analytics capabilities, but also reinforces a shakeout of sorts in the BDR (backup and disaster recovery) market.
Carbonite has made at least three acquisitions since Ali took over as CEO 2014. The others involved EVault and Double Take Software. At the same time, Ali and Channel Chief Jon Whitlock have built out One Carbonite -- a unified partner program for all of the various products and services.
On the one hand, Carbonite is pushing harder into SMB partnerships. But on the other, the company also wants to retain consumer customers. Earlier this week, Carbonite announced a transition path to help Code42 Software's consumer customers (who run CrashPlan for Home) migrate to Carbonite. As a result of the deal, Code42 will no longer sell CrashPlan for Home subscriptions.
Buying Data Castle is a particularly timely move for Carbonite. The company's most recent quarterly results largely beat Wall Street's expectations but still disappointed some investors who were seeking a better long-term outlook from the company.
Carbonite and Data Castle
Rumors about the Data Castle acquisition have circulated for about two weeks. BostonInno confirmed the deal today. Financial terms weren't disclosed. If I had to guess, Data Castle potentially was a distressed company that Carbonite picked up because it has solid niche technology that Ali expects to monetize in new ways.
Also: Data Castle had acquired some EVault technology in early 2016. Carbonite, which also owns EVault technology, could potentially reunite that code under one roof -- though I don't know if that potential scenario motivated the deal.
I've covered Data Castle off and on since about 2010. The company made some early moves in the MSP market but those largely stalled about five years ago.
My perception: Rivals like Acronis, Datto, Intronis MSP Solutions by Barracuda, StorageCraft and Veeam have had far more success in the MSP-centric SMB sector than Data Castle. Also, keep an eye on Infrascale, where a major customer win just arrived. We'll share more details soon. Also of note, MSP-centric management tool providers like Autotask, Continuum and SolarWinds MSP now own their own backup platforms.
As it attempted to reinvent itself, Data Castle launched an analytics system in November, 2016, based on the earlier EVault technology acquisition from Seagate Technology, according to SeekingAlpha.
BDR Market Shakeout
No doubt, the BDR market is shaking out. In addition to the Carbonite-Data Castle deal, recent M&A moves involve Arcserve acquiring Zetta and eFolder acquiring Axcient. Also, FalconStor changed CEOs yet again earlier this week and is now led by an investment leader.
