Veeam acquisition of Alcion supports push into as-a-service, AI
Veeam embarks on the acquisition path again with its purchase of Alcion. The deal brings several employees who specialize in AI and as-a-service knowledge.
One year after investing in Microsoft 365 backup-as-a-service provider Alcion, Veeam Software acquired the startup with roots in AI and security.
Analysts and Veeam executives said the acquisition will strengthen Veeam's budding as-a-service offerings. Earlier this year, the vendor launched Veeam Data Cloud backup as a service to protect Microsoft 365 and Azure workloads.
"Veeam, after resisting it for many years, finally went into the as-a-service business," said Christophe Bertrand, an analyst at TheCube Research.
The Veeam acquisition, which closed in mid-September, is the data protection vendor's second purchase of a company founded by Niraj Tolia and Vaibhav Kamra. In 2020, Veeam acquired their Kubernetes backup provider Kasten. In September 2023, Veeam led a $21 million funding round for recently out-of-stealth Alcion.
The data protection market has seen a surge in acquisition activity in the last year. For example, Commvault acquired Clumio this week, Cohesity and Veritas are merging, and Veeam's purchase of Cirrus from CT4 late last year eventually became the Veeam Data Cloud. Earlier this year, Veeam also acquired incident response vendor Coveware.
Veeam did not release terms of its latest acquisition.
"Veeam is not historically an often-acquiring organization, but that has clearly changed in the last few years," said Rick Vanover, Veeam's vice president of product strategy. "I don't see that behavior stopping."
Alcion at Veeam's service
The latest Veeam acquisition brings additional expertise in fast-growing areas, with as a service at the top, Vanover said.
Niraj Tolia
Alcion's team of fewer than 50 employees joins Veeam, including Tolia as the new CTO and Kamra as vice president of technology. Tolia will lead product strategy and engineering for the Veeam Data Cloud. He succeeds Danny Allan, who left his CTO position to take on the same role at cybersecurity provider Snyk.
A year ago, when asked if Alcion was open to an acquisition by Veeam, Tolia said the company's focus was on an independent path, growth, product enhancements and customer value. Now it's about going to the next level for Alcion and Veeam.
"For our customers, it's just a much larger stage, getting to a much larger scale, much faster," Tolia said.
Alcion claims to have hundreds of customers. Those customers will receive an offer to transition to Veeam Data Cloud, said Brandt Urban, Veeam's senior vice president of worldwide cloud sales. Veeam also offers standalone Backup for Microsoft Azure and Backup for Microsoft 365 products.
Veeam, however, has not made a final decision about the end result for the Alcion product and does not have a timetable for the integration yet.
"Having us infuse this fastest-growing product in Veeam's history with the talent and the thought leadership that's coming in with Niraj, and the development capabilities across the Alcion team, is going to let us enhance the product faster, add more capabilities and then add more workloads," Urban said of Veeam Data Cloud.
Bertrand said he is hoping to see Veeam cover additional SaaS workloads with its data protection, pointing to other collaboration and DevOps platforms as examples. In addition to Microsoft 365 protection, Veeam also offers Backup for Salesforce.
"I look at the strategy that HYCU has adopted, which is different. They cover many, many platforms through a different mechanism than Veeam does," Bertrand said, referring to HYCU's R-Cloud. "It feels a little bit like an arms race has started. In the next few months, we'll know exactly which ones will be the most successful."
AI and security and AI, oh my!
The AI in Alcion's product helps administrators perform intelligent backups and detect malware. Krista Case, an analyst at The Futurum Group, said she sees Alcion using AI strategically, for example to adapt backup schedules based on data modification patterns, to trigger a backup based on identification of potentially malicious activity, and to suggest the best recovery point.
"When we talk with practitioners about cyber resilience, they are most concerned about minimizing data loss and downtime -- and these Alcion capabilities directly address that requirement," Case said.
AI is actually a positive as long as it is not just hype.
Christophe BertrandAnalyst, TheCube Research
End users and partners want vendors like Veeam to use AI in a smart and governed way, for example to help fight ransomware, Bertrand said. Veeam's AI capabilities include inline malware detection, its Intelligent Diagnostics service and a forthcoming Copilot for its Backup for Microsoft 365.
"AI is actually a positive as long as it is not just hype," Bertrand said.
And there is a lot of hype, with seemingly every tech vendor touting AI-focused features and products.
"The focus [for users] is less on having a chatbot, and it is more about the outcome that AI can enable," Case said. "This might include detecting attacks that otherwise would have fallen through the cracks, for example."
Veeam executives noted the importance of clear AI benefits for users.
"We keep that top of mind because otherwise it's a really expensive experiment," Vanover said.
Paul Crocetti is an executive editor at TechTarget Editorial. Since 2015, he has worked on TechTarget's Storage, Data Backup and Disaster Recovery sites.
Niraj Tolia
