eFolder has acquired Replibit, which offers image-based backup and disaster recovery (BDR) solutions designed for MSPs. The acquisition, confirmed today, potentially sets the stage for more intensive competition with Datto and other BDR-centric players, and "coopetition" with Acronis, Dell AppAssure, StorageCraft and Veeam, among others. The move also reinforces ongoing M&A in the MSP software market, particularly the business continuity sector.
Financial terms were not disclosed, though it sounds like eFolder funded the deal from internal monetary sources. eFolder's buyout of Replibit enables "the delivery of end-to-end backup and disaster recovery SaaS solutions" designed for MSPs, the companies said. The Replibit portfolio includes:
- Replibit Agent for local server and workstation backup;
- Replibit Appliance for local storage and on-site virtualization;
- Replibit Vault for private cloud backup and cloud recovery, and;
- the Replibit Management Portal for global management of field deployed Replibit Appliances and Vaults.
eFolder has been partnering with Replibit for about a year, and became impressed with the company's technology during that journey, according to eFolder CEO Kevin Hoffman.
Replibit was founded by Andrew Bensinger, a data protection specialist who earlier launched DSSDR and helped to pioneer the BDR industry, notes eFolder VP of Marketing Ted Hulsy. The former Zenith Infotech leveraged some of DSSDR's technology during the early days of MSP software. I believe Bensinger is joining eFolder as part of the deal.
eFolder vs Datto
Take a closer look at the announcement, and there are clues that eFolder plans to increasingly compete head-on against Datto, a $1 billion unicorn that's profitable. According to eFolder, the combination of eFolder Cloud and eFolder Replibit "is now the fast, reliable, and complete business continuity solution designed for MSPs." Similarly, Datto sells purely through MSPs and controls its BDR destiny from endpoint to cloud.
Although I don't have exact figures at my fingertips, I suspect Datto is several times larger than eFolder. Moreover, Datto extended beyond its core data protection heritage earlier this year when the company launched Datto Drive -- a file sync and sharing service designed to drive SMB customer sales leads to MSPs. Datto Drive seeks to commoditize markets currently served by Box, Dropbox and eFolder Anchor. It's safe to expect a fresh round of Datto product updates -- including a push into networking -- during the DattoCon16 conference later this month in Tennessee.
Of course, the BDR market involves far more than eFolder and Datto. A range of companies -- including Barracuda, Carbonite, Continuum and StorageCraft, among others -- have completed M&A or private equity deals over the past couple of years to drive growth. (Take a look at BDR M&A deals and outcomes here.)
eFolder Balancing Act
Amid market M&A, eFolder and many other MSP software companies increasingly find themselves in a state of "coopetition" -- a term from the late Ray Noorda to describe technology companies that cooperate even as they compete with one another.
Even before the Replibit acquisition, eFolder offered cloud backup, data protection, business continuity and file sync services to MSPs and resellers. As part of that strategy, eFolder vowed to remain a Switzerland in the data protection market -- supporting five image-based backup providers:
- Dell AppAssure
Although eFolder now owns Replibit, the company says it will maintain an "open BDR ecosystem strategy." According to Hulsy, "We have tons and tons of revenue around those partnerships and we believe in a partnering strategy. That won't change. But there are also times when we want to own the IP .With Anchor, CloudFinder and now Replibit, we have world-class IP."
In some ways, eFolder's buyout of Replibit is similar to ConnectWise's investment in LabTech Software in 2010. At the time, ConnectWise vowed to maintain open APIs and integrations with third-party RMM providers even as the company built close links to LabTech. (As part of a 2015 reorganization, LabTech became part of the larger ConnectWise company.)
ConnectWise's strategy has been to integrate, upsell and cross-sell across its PSA, RMM and business management software line. Now, apply that example to eFolder. The company has about 3,000 MSPs across its partner base. No doubt, cross-sell and upsell initiatives across CloudFinder, Anchor and Replibit are on the way.