Datto Acquires Backupify to Expand Cloud DR and Backup Capabilities

In latest example of cloud consolidation, niche players to merge and grow addressable market

Jason Verge

December 11, 2014

3 Min Read
Datto Acquires Backupify to Expand Cloud DR and Backup Capabilities
Datto’s Siris 2 appliance for enterprise business continuity (Image: Datto)

Datto is acquiring Backupify to expand backup and cloud disaster recovery capabilities. The companies play in different markets and back up different types of data. Terms of the deal were not disclosed, but Backupify has about 100 employees, while Datto has about 400. Together the two will have close to 2 million customers and 8,000 partners worldwide.

Consolidation continues to occur in the cloud-enablement world, and the acquisition is the latest example. Both companies are niche players with little overlap in terms of customers and backup offerings. Datto provides hybrid cloud-based backup, protecting apps running on-prem or in a private cloud, and Backupify provides cloud-to-cloud backup for Software-as-a-Service applications like Salesforce.

The business models are also different. Datto focuses on the channel, particularly service providers who in turn serve SMB. Backupify has bigger accounts.

The focus in the backup and disaster recovery worlds has been on how to deal with the changing delivery models for data. CenturyLink recently acquired a cloud DR company called DataGardens, a company that is particularly strong in moving data between on-prem and cloud, or from one cloud to another cloud.

Mozy, Carbonite, Dropbox, SugarSync, Box all offer backup in some form or another and have growing enterprise cloud DR plays. Consolidation is occurring between companies with strong niches like Datto and Backupify, driven by desire to provide a wider set of capabilities and keep up with some of the big general cloud storage players moving deeper into business-focused offerings.

The two combined can offer backup across a wider swath of services delivered both locally and in the cloud. The result is what the company calls “Total Data Protection Platform.” It will appeal to those that use a mixture of SaaS and on-prem, as well as expand Datto’s potential audience. Support has also been expanded.

Datto appeals to those with a lot of privately hosted apps, but the general trend is moving more services to the cloud through multi-tenant apps from Google and Salesforce. To address this trend, the company either had to build more products in house or acquire the capability. They chose the latter route.

Both companies have raised funding in the past. Backupify raised about $20 million, and Datto raised about $25 million. These rounds are relatively small compared to the $100 million round for Box. Dropbox was considering an Initial Public Offering at one point, but the plans appear to have been shelved. Box has filed for an IPO, but the float is yet to happen.

“At a time when data lives in and flows freely from on-premise servers and systems, virtualized environments, and third-party clouds, data protection and recovery takes on a whole new meaning,” Austin McChord, founder and CEO of Datto, said in a statement. “Backupify provides must-have solutions for companies entrusting their data to SaaS applications, and our team will help complete the vision of creating a Total Data Protection Platform that extends across a company’s entire digital ecosystem, as well as expand to new global markets, including Europe, Asia, and Latin America.”

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