The Basics Of The Merger

Cohesity and Veritas’ merger just completed last week, creating the single largest data resilience provider in the market by revenue, with a combined total revenue of $1.7 billion in the fiscal year ending July 2024. The details of the merger mean that all the intellectual property and organizational resources for NetBackup and the Alta platform become part of Cohesity. The InfoScale, Data Compliance, and Backup Exec businesses were not included in the merger and have been formed into a new company with around 1,500 employees called Arctera, still owned by the Carlyle Group.

Leadership Emphasizes Stability

As most enterprises know, integrating even small acquisitions can be rocky. Cohesity’s leadership has the task of merging Veritas’ larger set of customers and employees into a single organization that is greater than the sum of the two companies’ parts. Sanjay Poonen and the rest of the Cohesity leadership have emphasized that they plan on making this merger a net benefit for all their clients. There is a focus on keeping customer data resilience platforms stable, providing expected updates, and exposing customers to value-added offerings from each portfolio. That’s all you can really ask for. Merging of development and building a unified product platform will happen, but it will be incremental to minimize disruption while maximizing value to customers.

Future Value In Innovation And Packaging

Cohesity’s novel data management focus and Veritas’ experienced professionals create a strong team. On the roadmap, expect Cohesity to lean into its infusion of generative AI functionality into its products and expanding that expertise into the NetBackup and Alta platforms. One simple example of easy innovation might be the expansion of Cohesity’s Gaia platform for retrieval-augmented generation from backups to include data housed in legacy systems backed up by NetBackup. Beyond AI, the consolidated team has a deep bench of expertise in all aspects of resilience: security, availability, and accountability. On the packaging side, the new portfolio is expansive, and Cohesity has an opportunity to disrupt the market just through smart packaging of the overall portfolio, addressing the pain points that many customers face about operating multiple data resilience platforms to address all their needs.

Competition Continues To Be Fierce In A Consolidating Market

Other vendors from the likes of Veeam, Commvault, Dell, Druva, IBM, OpenText, and Rubrik still represent formidable competition. Internal innovation to support new services like Entra ID, expanding SaaS support, feature evolution on data security, and more are driving change in the industry as customers ask for more capabilities. While the Cohesity and Veritas merger may be the latest in a series of acquisitions, it is not the only one. Some recent M&A activity over the past 18 months includes Veeam purchasing Alcion, Cirrus, and Coveware; Commvault purchasing Appranix and Clumio; and Rubrik’s acquisition of Laminar. These acquisitions tell a story of increased consolidation, especially as large vendors look to add new capabilities quickly to their portfolio. Other vendors in the space have largely focused on augmenting existing capabilities with specific features by purchasing smaller companies and integrating them quickly. For example, Commvault’s acquisitions further its depth and breadth in cloud backup, specifically AWS. Veeam added backup-as-a-service capabilities and ransomware incident response. Rubrik expanded its posture management capabilities. The Veritas acquisition is more massive, however, and promises to reset the competitive landscape as well as set up the company for an eventual IPO.

What It Means For You

As noted in the Forrester report, The Data Resilience Solutions Landscape, Q3 2024, customers have been opportunistically switching from ill-fitting backup solutions to modern data resilience-oriented solutions, especially as they adopt cloud architectures and generative AI capabilities. But the transition to new tools is often slowed by the need to maintain recovery capabilities for existing backups and the amount of production systems that those solutions must connect with. This makes the current market moment important both to vendors and to enterprise customers. Cloud and SaaS adoption have collided with generative AI transformations to make organizations rethink how they secure, back up, recover, and govern their data. Because data resilience solutions are sticky and will be with your organization for a long time, make sure that you properly assess your needs. Reach out for a guidance session and take advantage of tools such as the Forrester Wave™ evaluation of data resilience solutions or our Technology Resilience Maturity Assessment to make that sure you are on the right path to keeping your data resilient.