Arcserve, Sophos: Data Protection, Cybersecurity Partnership Counters Ransomware

Arcserve and Sophos have inked a global alliance to protect data backups from cyberattacks, ransomware and malware. The partnership arrives as hackers increasingly target MSPs, deactivate backup systems and ultimately spread ransomware across service provider and end-customer systems.

The Arcserve-Sophos joint solution, set to launch in October 2019, integrates Arcserve appliances with Sophos Intercept X Advanced for Server, the two companies say.

The Arcserve-Sophos relationship reflects a growing market trend: Backup, disaster recovery and data protection companies are increasingly partnering with cybersecurity companies to safeguard data systems from ransomware.

Some of the relationships involve M&A deals such as Carbonite acquiring Webroot earlier this year. Other strategies involve MSP software platform providers acquiring backup and/or cybersecurity tools that ultimately integrate with one another. Buyers in that scenario have included Continuum, Kaseya and SolarWinds MSP, among others.

Additional partner-related moves include Datto and ConnectWise -- each of which is striving to build alliances that address threat intelligence, data protection and cybersecurity. The ultimate goal may be some sort of security-minded association to help educate and protect MSPs.

MSP Software: More Mergers and Acquisitions?

The growing relationship between data protection and cybersecurity companies could also drive more merger and acquisition activity, ChannelE2E believes. Though buyers and sellers will need to avoid many of the missteps from the failed Symantec-Veritas merger of more than a decade ago.

Nevertheless, private equity firms and MSP software providers are scouring the market for potential acquisitions. Arcserve, owned by Marlin Equity Partners since 2014, has completed tuck-in acquisitions in recent years. But we wonder if or when Arcserve will shift from buyer to seller in the M&A market, especially since Marlin Equity has now owned the backup software provider for roughly five years.

Meanwhile, Sophos has a strong reputation in the MSP cybersecurity market. Although still focused mainly on software, Sophos has also evolved into a Master MSSP of sorts -- offering managed detection and response (MDR), security operations center, threat hunting and other services to MSPs. Sophos, which is publicly held, has hit some revenue speed bumps over the past year or so. That makes us wonder if or when the company could potentially become a private equity takeover target.

In the meantime, we'll be watching to see how the Arcserve and Sophos partnership plays out in the IT channel.