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Midmarket Building Clouds

New Faces, Same Cloud Backup Challenge: Can Carbonite Go Midmarket?

Norman Guadagno

Norman Guadagno

The changes continue at Carbonite — the cloud- and appliance-based backup provider that previously extended from consumers into the small business market. As part of the company’s new midmarket push, Carbonite has hired Norman Guadagno as its senior VP of marketing, succeeding former chief marketing officer Nina McIntyre, who left the company after less than one year with Carbonite.

It’s the latest in a growing list of recent moves at Carbonite. The company recently:

  • Acquired EVault from Seagate, setting the stage for a midmarket push.
  • Named IBM veteran Paul Mellinger as its senior VP of EVault.
  • Hired Jessica Couto as the company’s new channel chief.
  • Recruited Sophos and Kaspersky Lab veteran Christopher Doggett to oversee sales.

Carbonite CEO Makes Multiple Moves

The new names, faces and services are part of a complex chess match CEO Mohamad Ali is playing against the overall cloud industry — and dozens of business continuity providers that support consumers, small businesses and midsize customers.

Ali — a veteran of Avaya, HP and IBM — arrived at Carbonite as CEO in December 2014, succeeding founder David Friend. A basic partner program — successfully attracting VARs and MSPs — was in place. But the company had to fend off an unsolicited takeover bid while also trying to balance direct and indirect sales in the business market — and price-sensitive sales in the consumer market.

Many of the new hires bring channel, midmarket and even enterprise experience to Carbonite. For instance:

  • Doggett joined Carbonite from Kaspersky Lab, where he most recently served as managing director of Kaspersky North America, leading all aspects of the business unit and managing an organization of over 300 employees. Earlier at Sophos, he designed and implemented the company’s global channel sales program.
  • Guadagno previously was senior VP at digital marketing agency Wire Stone, working with clients such as Microsoft, Boeing, Nike and Carbonite. Earlier, he held director-level posts at Microsoft and Oracle.
  • Mellinger joins Carbonite after 30 years at IBM, where he had been VP of IBM Software Sales, VP of Cognos North America, and VP of information management for Asia Pacific.
  • Couto previously held key channel-related positions at LANDesk and Kaspersky Lab, and she’s a former solutions provider who understands the nuances of building and running and IT services business.

Carbonite Performance

Overall, Carbonite is still growing but not fast enough to please some shareholders. The company’s stock bottomed out at about $8.40 in December 2015, but remain near that 52-week low — currently trading at about $9.50.

For its Q3 ended Sept. 30, 2015, revenues grew about 10 percent to $34.6 million, but the company had a $4.5 million loss for the quarter. I think Q4 earnings are set to be announced on or about Wednesday, January 27.

Carbonite has made incremental progress with its partner program in the past year. A partner trial program allows IT solutions providers to offer customers free trials of Carbonite Server Pro Bundle, which includes both server and workstation backup technology. The company was also named Cloud Partner of the Year by Tech Data, the major distributor.

Going forward the big upside opportunity likely involves EVault — the midmarket data protection technology purchased for only $14 million. Former owner Seagate spent recent years trying to build EVault into a cloud service worthy of its own IPO. Sources say the technology is sound but Seagate’s execution was flawed, especially in the crowded market for data protection services.

Now, Carbonite must balance its established consumer and soho businesses with SMB and midmarket channel opportunities. And a word of caution: Even as Carbonite strives to march up into the midmarket, it must continue to nurture smaller partners that represent the bulk of its partner ecosystem.

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