Arcserve and StorageCraft merge to address broader market

Arcserve and StorageCraft have decided to merge and create a single vendor with a broad portfolio of data protection products.

Arcserve sells its flagship Unified Data Protection (UDP) backup and recovery software, which makes up the core of its backup appliance and cloud storage service offerings. UDP is compatible with Windows and Linux, and all Arcserve appliances have integrated security software from Sophos, an Arcserve partner.

StorageCraft's portfolio consists of its flagship ShadowProtect SPX 7 data protection software, its OneXafe series of converged scale-out storage and backup appliances, disaster recovery as a service (DRaaS) and cloud backup for Office 365 and Google Workspace (formerly G Suite). StorageCraft products are only sold through the vendor's network of channel partners and managed service providers (MSPs).

"The technologies complement each other," said Jerome Wendt, president of Data Center Intelligence Group. "It's a nice blend of solutions."

Arcserve's offerings cover some of the physical components of the data center StorageCraft doesn't, such as tape, while StorageCraft has some unique offerings aimed at supporting remote offices, Wendt added. He said it's hard to name a data protection vendor targeting MSPs and SMBs with as broad a product portfolio as that of Arcserve and StorageCraft combined.

Unitrends may be the most direct competitor, Wendt suggested, after ruling out Barracuda, Datto and Carbonite (recently acquired by OpenText) because they don't go as far upmarket as Arcserve.

Tom Signorello

The two companies signed a definitive agreement to merge and are currently awaiting regulatory approval.

Arcserve CEO Tom Signorello will become CEO of the new company, which will continue to be called Arcserve. StorageCraft president Douglas Brockett will become president of the new company, but current StorageCraft CEO Matt Medeiros is stepping down and won't be part of the management team.

The two businesses will be "integrated at every level," and StorageCraft won't be operating independently within the newly formed company, Signorello said. Both companies sell through partners and will combine their channel ecosystems.

Douglas Brockett

Ultimately, end customers won't be affected by the merger, Brockett said. The product roadmaps of both companies are unaffected, and customers will continue to interact with Arcserve or StorageCraft through their providers or resellers. The only change customers may notice is a larger selection of products and services.

The merger is beneficial to Arcserve in many ways, according to Signorello. Arcserve traditionally sold its products through value-added resellers (VARs) and focused on the SME market. It wanted an MSP ecosystem and to tap into the SMB market, both of which StorageCraft provided, Signorello said.

For StorageCraft, which primarily has a North American market, the merger with Arcserve brings global reach, Brockett said. Arcserve has a large APAC and EMEA presence and was looking to scale its North America presence, so the merger fulfilled the geographical diversification needs of both companies.

Arcserve also provides a solid financial foundation for a new company, Signorello said. Arcserve's revenue and bookings were up 9% for fiscal year 2019, 12% for 2020 and projected to be up 7% for 2021, he said.

"Arcserve brings into this merger a strong, stable, profitable base to launch off of," Signorello said.

Arcserve brings into this merger a strong, stable, profitable base to launch off of.

This merger is the latest in a series of vendor shakeups in the data protection industry. Earlier this month, SaaS application backup specialist Rewind bought BackHub to secure a foothold in third-party GitHub backup. On a larger scale, in January Veritas acquired HubStor for its SaaS backup capabilities. And in December 2020, Google bought Actifio, the vendor commonly credited for coining the term "copy data management."

All these mergers and acquisitions are partly driven by COVID-19, Wendt said. A large part of the workforce has been working remotely for a year or more now, and businesses have adapted their IT to support it. Customers are now looking for simplification and consolidation -- to bring data protection for data center, cloud and remote under one platform. Wendt noted that most of the recent acquisitions weren't simply a larger company buying out a smaller one for financial reasons, but to gain technology they didn't already have.

"Companies are trying to fill holes in their portfolios," Wendt said.