Carbonite CEO joins IDG, interim CEO steps in

As cloud storage pioneer Carbonite shifts to more of a security focus, it is also changing its leadership.

Mohamad Ali suddenly resigned as Carbonite CEO last week, with chairman Steve Munford stepping in as interim CEO. 

Ali, who was Carbonite CEO since December 2014, left to become CEO of International Data Group (IDG), a tech media company based in Boston. He was previously chief strategy officer at Hewlett-Packard and worked for Avaya and IBM prior to that.

The CEO switch happened in the midst of a strategy shift within Carbonite. The backup vendor bought cybersecurity firm Webroot in early 2019, making it clear that Carbonite planned to invest more into security capabilities to bolster its backup offerings.

Norman Guadagno, senior vice president of marketing at Carbonite, said there was no need to separate backup and security. The company is investing in both because the ultimate goal is to deliver products that can prevent or recover from data loss, regardless if it resulted from a ransomware attack or an accidental deletion.

"The industry has separated security and data protection, and that's largely an artificial distinction," Guadagno said.

Interim Carbonite CEO Steve Munford joined Carbonite's board of directors in January 2014 and became its chairman in March 2016. Guadagno said Munford's  experience at Sophos Group PLC, which develops security software, makes him a perfect fit as interim Carbonite CEO while the vendor executes its more security-focused strategy.

Steve Munford

Guadagno said Munford has expressed no intention of becoming Carbonite's permanent CEO and Carbonite's directors are busily creating the criteria for the company's next CEO.

Carbonite was among the first cloud backup providers, but initially focused on consumer data protection. The company has moved more towards enterprise customers over the years with a series of acquistions.

Naveen Chhabra, senior analyst at IT market research company Forrester Research, said that people cross the aisle between working for enterprise IT vendors and working for media, research and analysis companies fairly frequently. Ali's case is unique only in that it is happening at the CEO level.

It's unique in that it's a CEO switching over, but it's actually not a big deal. There's a lot of movement between the light side and the dark side.

"It's unique in that it's a CEO switching over, but it's actually not a big deal," Chhabra said. "There's a lot of movement between the light side and the dark side."

The Carbonite CEO change came on the day the vendor reported its second quarter 2019 earnings call. Non-GAAP revenue for the quarter was $135 million, a 69% growth over the previous year. However, the report found that Carbonite's data protection business underperformed, and it was Webroot's contributions that made the quarter successful for Carbonite. Munford said during the call that he planned to accelerate the company's integration plan with Webroot.

Given the target audience Carbonite aims for, integration of backup and security is absolutely the right move, according to Chhabra. He said many small and medium-sized businesses do not have the resources to implement backup and security separately within their IT environments, and would prefer to go through a single vendor to handle both.

Christophe Bertrand, senior analyst at Enterprise Strategy Group, said that Barracuda Networks has found success going after this exact market with this exact strategy. He said it takes a coherent go-to-market plan and an understanding of customers' needs. The difference is that Barracuda started in security and moved into data protection, while Carbonite started in data protection.

"Barracuda is doing a really good job combining its security and backup businesses. It resonates with smaller businesses," Bertrand said.

Chhabra also sees Carbonite's security focus as part of a broader trend that data protection can no longer be just about recovering data from bulletproof backups. Backup vendors are adding other capabilities to their portfolios, via acquisitions or partnerships, in order to broaden their data protection offerings beyond restoring from copies.

"There is industry-wide recognition that there should be more and better backup tools," Chhabra said.