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Carbonite Acquires Dell EMC’s Mozy Cloud Backup Service

Carbonite’s Mohamad Ali
Carbonite's Mohamad Ali

Carbonite is acquiring Dell EMC's Mozy cloud backup service for $145.8 million in cash. Carbonite also lined up a $120 million credit facility for additional acquisitions, data protection company confirmed today. The upshot: Revenues continue to grow, but competition from Datto, Veeam, StorageCraft and cloud upstarts is intensifying, ChannelE2E believes.

“We are thrilled to announce the acquisition of Mozy,” said Mohamad Ali, president and CEO of Carbonite, in a prepared statement. “Carbonite’s competitive advantage is our flexible data protection platform, which serves every scenario, from backing up individual laptops to maintaining uptime for hundreds of business servers. This deal provides Mozy customers scalable options for the future and gives Carbonite a broader base to which we offer our solutions.”

EMC acquired Mozy in 2007. More recently, EMC parent Dell has been striving to sell off assets to improve the company's balance sheet ahead of a potential IPO or perhaps even a reverse merger with VMware.

Carbonite Data Protection Strategy

Carbonite, meanwhile, has acquired multiple companies over the past two years -- including Data Castle, Double Take and EVault. CEO Mohamad Ali's strategy calls for Carbonite to deliver a technology grid of sorts (see graphic below).

Carbonite appears to be making progress with the strategy, though the company faces intense competition and channel challenges. The company's latest quarterly revenues -- $61. 7 million, announced today -- showed 15 percent growth but slightly missed Wall Street's expectations, according to SeekingAlpha. The apparent revenue miss comes a few weeks after Carbonite had a sales and marketing reorganization, at which time the company and former channel chief Jon Whitlock parted ways.

Cloud Backup Competition Intensifies

Meanwhile, competition continues to intensify. Hot data protection upstarts like Druva and Rubrik have been turning heads. While entrenched, fast-growth players like Datto, StorageCraft and Veeam continue to strengthen their channel footholds.

No doubt, Carbonite plans to grow through organic sales and a new DRaaS offering. And CEO Mohamad Ali has a knack for finding and acquiring underperforming or niche data protection technologies. We'll be watching to see if the organic and M&A deals unlock more value for partners.

Updated February 14, 2018: Although ChannelE2E believes Carbonite faces intensifying competitive pressures, Wall Street cheered the company's earnings report and the Mozy buyout. Shares surged today nearly 20 percent as of 3:07 p.m. ET.

Joe Panettieri

Joe Panettieri is co-founder & editorial director of MSSP Alert and ChannelE2E, the two leading news & analysis sites for managed service providers in the cybersecurity market.