Olivier Le Moal - stock.adobe.co
Cohesity completes acquisition of Veritas
The combined Cohesity company boasts more than 12,000 customers and promises support for existing Veritas products. Arctera, a Veritas spinoff, launches in the wake of the merger.
Cohesity completed its purchase of Veritas Technologies on Tuesday, combining its decades-old, on-premises footprint with the newly acquired SaaS data protection vendor.
The acquisition also marks the launch of Arctera, a spinoff business led by former Veritas executives who will develop and support a handful of former Veritas products.
Cohesity now has more than 12,000 customers, a presence in 85 of the Fortune 100 companies and a combined value of $7 billion, according to the vendor, making it among the largest data backup vendors in the market.
The catalogs for the two former competitors will likely remain separate for some time, said Brent Ellis, an analyst at Forrester Research. The separation might assuage customers and employees in the short term, but Cohesity will need to find integrations and innovations soon to justify the purchase, he said.
"It's not that you end up with a company that has more capabilities [following the acquisition]," Ellis said. "You just have a larger company. The question will be what you do with that [market] position."
Merger details
The newly combined Cohesity will offer "peace of mind" for Veritas and Cohesity customers by supporting both companies' existing products, according to a press release.
Cohesity said it will support Veritas NetBackup data protection software, Veritas NetBackup appliances and the Veritas Alta data protection SaaS. The Veritas brand will remain for current Veritas offerings, according to a Cohesity spokesperson, but could change over time.
Cohesity should move quickly to unite the two companies' products under its Helios management SaaS, said Krista Case, an analyst at The Futurum Group. Standardizing the catalog under one control plane would surface strengths of both platforms, namely Cohesity's cloud offerings and Veritas' vendor interoperability, she said.
"[Cohesity CEO Sanjay] Poonen emphasized Veritas' strength when it comes to API connectors," Case said. "I'm watching for this to come into play when it comes to protecting SaaS workloads, which is [a growing trend] for the data protection market as a whole."
Specific figures for layoffs at both companies following the acquisition weren't provided, but a Cohesity spokesperson said reductions had taken place.
"As independent companies, Cohesity and Veritas made the necessary decisions for the business's health before the transaction closed," a Cohesity spokesperson said in an email statement to Informa TechTarget Editorial.
Cohesity likely wouldn't reduce head count among product engineers and support staff, Ellis said, as those employees likely have decades of experience in the backup market and could smooth the merger transition.
Cohesity said it expects to offer updated roadmaps for its portfolio in the coming months, and that resources from the acquisition will result in a global support team, new AI capabilities and an expanded partner ecosystem.
It's uncommon for backup vendors to buy a competitor outright, industry analysts said earlier this year, making Cohesity's acquisition of Veritas singular in recent years. Instead, backup vendors tend to acquire smaller technologies to integrate, such as Commvault's 2022 acquisition of TrapX for ransomware decoys. Or they're purchased to become part of a larger platform, such as Hewlett Packard Enterprise's acquisition of Zerto.
For Cohesity, the acquisition of Veritas leaves few options for further growth, according to Ellis.
"It pushes Cohesity past that startup mentality," he said. "Depending upon how successful they are at this, 2025 might be the year we see them IPO."
Cohesity's acquisition was funded through a Series H investment round led by Haveli Investments. The firm provided an equity majority and is now one of Cohesity's largest shareholders, according to the vendor. Other investors included Coatue, Sapphire Ventures and Dragon Fund.
The combined company is supported by investments from Sequoia Capital, SoftBank Vision Fund I, Wing Venture Capital, Premji Invest and Madrona. The Carlyle Group, the prior owner of Veritas, is also among the largest shareholders, according to the vendor.
Arctera launch
Cohesity has purchased a large amount of Veritas' business and technology, but a handful of former Veritas products will become the intellectual property of Arctera, which finalized separation from Veritas moments after the Cohesity acquisition news.
The spinoff, previously known as DataCo, unveiled its new name and branding last month. Arctera oversees the sales and development of three former Veritas businesses: InfoScale, Backup Exec and products within the Data Compliance and Governance group.
Lawrence Wong, a former senior vice president and chief strategy officer at Veritas, is the new CEO of Arctera. Arctera is headquartered in Pleasanton, Calif., and will operate as three product business units with more than 1,500 employees, according to a press release.
Case said Arctera will find a niche for itself in the backup market, as Backup Exec's customers aren't the same as those served by Cohesity.
"Backup Exec has a healthy customer base that, by and large, doesn't overlap with NetBackup," she said. "The data compliance capabilities are only going to grow in demand as well."
Tim McCarthy is a news writer for TechTarget Editorial covering cloud and data storage.
