Carbonite's push beyond consumer backup services into the midmarket is going surprisingly well. And surely, channel partners and MSPs are playing key roles in that that momentum. The evidence: For its Q1 2016, Carbonite's total bookings grew 42%; SMB bookings surged 124%; and consumer declined 3%, according to CEO Mohamad Ali.
Those results surfaced during Carbonite's earnings call this morning with Wall Street. Investors were very impressed. As of mid-day Tuesday, Carbonite's stock is up a whopping 18 percent vs. yesterday's close.
"We delivered strong gross margins and earnings per share that were all well ahead of our expectation," Ali said during the call. "Overall, our results were driven by excellent progress and our integration of EVault, strong demand for Carbonite server backup, and segmented marketing of our Carbonite-branded SMB products to small businesses. Our results this quarter demonstrate our aggressive expansion in the high-growth market of cloud backup and disaster recovery as a service for SMBs."
Indeed, Carbonite spent late 2015 repositioning the company. The moves included multiple channel hires and acquiring EVault, a promising midmarket data protection platform that underperformed for former owner Seagate.
In December 2015, new Carbonite Senior VP Christopher Doggett -- a Sophos and Kaspersky Lab veteran -- promised that more powerful partnerships were on the way. More recently, new Channel Chief Jessica Couto and other team members unveiled an overhauled partner program.
Carbonite's Momentum with EVault, MSPs
Those moves are now paying big dividends -- with additional milestones expected in Q2. Among the priorities for the weeks ahead: Completing selected data center consolidation moves for the EVault acquisition, and rolling out a pricing and packaging refresh of the EVault subscription offering, Ali said. "I'm very pleased with the progress we're making, and we remain on track to meet or exceed the integration objective," he added.
Ali also explained how Carbonite now segments its data protection offerings for business:
- Carbonite-branded solutions are purpose built for small businesses of one to 99 employees, he asserted.
- EVault's branded solutions are more sophisticated and serve midsize businesses with a 100 to 2,000 employees, he said.
Channel partners are also central to the strategy. "We...continue to strengthen EVault's relationships with strategic alliance partners like Iron Mountain and SunGard, as well as Managed Service Providers -- MSPs -- which is a new go-to-market for Carbonite," Ali said.
Carbonite Rivals: Fierce Competition
Of course, Carbonite faces plenty of competition in the SMB data protection market. Companies like Datto and Intronis MSP Solutions by Barracuda also work closely with MSPs. Moreover, Continuum has successfully extended beyond RMM and NOC services into business continuity for MSPs and data center providers. And just yesterday, Virtustream -- an EMC business -- announced Storage Cloud extensions that service providers can white label.
Still, Carbonite insists that it can differentiate in a crowded market. "Currently, we see competitors in the disaster recovery as a service space offering a one-size-fits-all approach for a limited set of operating systems and platforms," said Ali. "In comparison, EVault has one of the most comprehensive offerings in the industry, and we see an exciting opportunity to bring EVault's best-in-class solution to a broader set of SMBs. As we bring new products to market in 2016, reflecting our goal to combine the best to EVault with the best of Carbonite, we will additionally be looking to position EVault products to smaller businesses than EVault has historically served."
So far, Carbonite's solutions have attracted more than 8,000 channel partners, the company says. But only "a few hundred" of those Carbonite partners are currently capable of selling the EVault products, Ali suggested. In other words, the journey to cross-train Carbonite and EVault partners could be a long one -- but the upside appears promising.
