Veeam has acquired Kasten, a provider of Kubernetes backup and disaster recovery (BDR) software for $150 million, the companies disclosed. The deal's valuation (i.e., an EBITDA multiple) was not disclosed.
This is M&A deal 405 that ChannelE2E has covered so far in 2020. See the full M&A deal list here.
The acquisition will empower DevOps teams to safeguard application development efforts that increasingly leverage Kubernetes as a preferred container orchestration platform, Veeam asserts. The net result for DevOps teams is a single data protection platform that includes virtual, physical, cloud and Kubernetes environments.
The Kasten K10 platform will continue to be available independently -- and it will also be integrated into Veeam Backup & Replication.
The acquired company will operate as a separate Kubernetes Business Unit (BU) within Veeam. Kasten founders Niraj Tolia and Vaibhav Kamra, will lead the business unit -- Tolia as its president and general manager, and Kamra as CTO. All Kasten teams including sales, marketing, R&D, and customer service will remain intact, Veeam adds. Headcount figures for the new business unit were not disclosed.
Veeam and Kasten: Channel Partner and MSP Strategy?
Veeam has a major channel partner program. Ahead of the deal, Kasten's website organized partners into these categories:
- Public Cloud Partners such as Amazon Web Services, Microsoft Azure, Digital Ocean, Google Cloud and IBM Cloud.
- Kubernetes Distributions such as Kubernetes itself, Rancher, Red Hat OpenShift and VMware Tanzu.
- Storage Providers such as Ceph, Dell EMC, LinStor, Minio, NetApp and PureStorage.
The M&A announcement did not specifically mention a partner strategy for Kasten and the resulting Kubernetes Business Unit. But in a follow-up email, Veeam CTO Danny Allan shared these perspectives with ChannelE2E:
ChannelE2E: What are the potential implications for channel partners – particularly MSPs?
Allan: Similar to Veeam, Kasten is 100 percent channel and we have common channel partners including Insight, SHI and WWT. Veeam clearly believes there is a significant market opportunity across all segments, with demonstrably strong Kubernetes adoption and growth in the enterprise. This helps our channel partners evolve towards more modern and future-ready architectures and to have the conversation with their customers about digital transformation.
ChannelE2E: Is Kasten a multi-tenant platform that will allow MSPs to manage multiple customers from a single dashboard, or are those types of MSP-centric capabilities potentially planned for future?
Allan: Kasten currently has strong security controls including enterprise grade encryption, Identity and Access Management (IAM) integration, and rich Role-Based Access Controls (RBAC). Kasten currently has MSPs offering Kubernetes data management as a service and we intend to invest and grow the MSP opportunity. This has been an area of strength for Veeam and is clearly a strong requirement for the joint solution.
Veeam Acquires Kubernetes Backup Provider Kasten: Executive Perspectives
In a prepared statement about the deal, Veeam CTO Danny Allan said:
“Veeam was built on offering the best data protection for virtual and modern data infrastructures, and we have continued to expand our offerings to include industry-leading protection for physical and cloud environments. With the acquisition of our partner Kasten, we are taking a very important next step to accommodate our customers’ shift to container adoption in order to protect Kubernetes-native workloads on-premises and across multi-cloud environments. This significant milestone strengthens Veeam’s commitment to continue to deliver the industry’s leading Cloud Data Management platform that will support data protection for container-based applications built in Kubernetes environments.”
Added Niraj Tolia, CEO at Kasten:
“The enterprise landscape is shifting as applications rapidly transition from monoliths to containers and microservices. With Kubernetes at the core of this infrastructural shift, Kasten's innovation in Kubernetes-native data management combined with Veeam's expertise in Backup, both on-premises and in multi-cloud environments, will significantly advance the state of modern data management. Veeam's success has been a beacon of inspiration for the Kasten team and we are very excited to join forces with a company where there is so much philosophical alignment.”
Veeam Acquires Kasten: Private Equity's Role
The deal isn't especially surprising given that private equity firm Insight Partners backs both backup software providers.
Indeed:
- Kasten raised $14 million in Series A funding from Insight Partners in 2019.
- Moreover, Insight acquired Veeam in March 2020. That deal was announced in 2019.
Insight Partners has a history of combining its software company investments. Earlier examples include Unitrends enterprise backup and Spanning cloud backup tucking into Kaseya, the IT management software provider. Insight continues to own Kaseya, which is now ramping up for a potential IPO.
