Best known for cloud-based backup services, Carbonite wants to reshape the company as a next-generation endpoint data protection provider
Carbonite made a big move in reshaping itself as a security company by acquiring endpoint malware protection vendor Webroot in an all-cash transaction of $618 million.
The Lowdown: The deal essentially reshapes Carbonite as an endpoint security — or as calls itself now, a endpoint data protection — vendor. Carbonite describes the acquisition as a melding of two different companies with complementary technologies and value propositions. As a data protection provider, Carbonite says it’s better positioned to grow.
The Details: A key asset Carbonite gained through the acquisition is Webroot’s network of managed service providers. Webroot lists more than 14,000 managed service provider partners and more than 300,000 customers. Carbonite says the Webroot MSP network complements its reseller channel, giving the new company significant sales reach and customer service capacity. And Carbonite expects significant growth as the targeted SMB and midmarket users upgrade their endpoint protection applications.
The Impact: Carbonite buying Webroot is a significant development in the SMB and midmarket backup and disaster recovery segment with channel ramifications. Carbonite says the combined company is well-positioned to take on directly backup competitors such as Acronis, Barracuda, Datto
Both companies are growing. Carbonite says it grew 23 percent last year, while Webroot reportedly grew 14 percent. Most of the growth for both companies
The Buzz: “The acquisition of Webroot dramatically accelerates our progress towards becoming the leading data protection company. With threats like ransomware evolving daily, our customers and partners are increasingly seeking a more comprehensive solution that is both powerful and easy to use. Backup and recovery, combined with endpoint security and threat intelligence, is a differentiated solution that provides one, comprehensive data protection platform,” said Carbonite CEO Mohamad Ali.
“Carbonite and Webroot have a common focus on making data protection and cybersecurity solutions accessible and easy to use, as well as a dedication to customer success, and we are thrilled to become part of their team. Together we can deliver tremendous value to our customers and partners,” said Webroot CEO Mike Potts.
“I’m personally thrilled for the opportunity ahead for both our MSP community and our RMM / platform partners. While we are in the early stages of transition planning, I can share that our commitment to creating MSP-friendly solutions that are both easy-to-use and efficient will not change. The combined company will be able to offer a robust platform to help solve the cybersecurity issues facing businesses. I’m excited to arm this channel with a set of tools to face the escalating threat landscape of today, and tomorrow,” said Charlie Tomeo, vice president of worldwide business sales at Webroot.
Counterpoint: Carbonite isn’t the first company to merge backup and security products into a single offering.
Barracuda Networks bought Intronis in 2015 to create an end-to-end portfolio of security and backup services sold through channel partners. Barracuda recently acquired
The basis of the 2004 Symantec merger with Veritas was to create a security and data backup powerhouse. At the time, the $13 billion was the largest technology acquisition. The two companies separated in 2016 because, under the Symantec roof, they couldn’t make the portfolio work together.
The channel and market impact of this technology marriage is potential, not definite. Carbonite and Webroot operate in crowded and highly competitive technology and channel segments. And while both companies are successful and they claim “leadership” positions in their respective domains, neither is a dominant player. Carbonite’s 2018 revenue is $296 million, which is significantly less than Datto or Veeam. Though respected for its technology, Webroot is among the secondary endpoint security vendors in terms of size and capacity.
Channelnomics Point of View: An interesting aspect of the Carbonite-Webroot deal is the attention paid to channel partners. Carbonite specifically cited the Webroot network of managed service providers as a chief asset. Webroot has long cultivated its managed services partnerships as it grew its recurring revenue stream. Founded in 2005, Carbonite started as a consumer backup provider, and started to shift to B2B sales through the channel in 2012. While Carbonite says its VARs will complement Webroot’s MSPs, the reality is Carbonite has a substantial base of managed services and referral partners, too. On paper, the Carbonite-Webroot looks good, but as history shows execution in this type of go-to-market value position is mixed.