VMware reaches agreement to acquire Datrium DRaaS

VMware's acquisition spree continues with its agreement to buy DRaaS vendor Datrium.

VMware said on Wednesday that both companies' boards approved the deal. VMware did not disclose the purchase price, but said it expects the deal to close July 31 pending legal and regulatory approval.

Datrium and VMware have worked together closely since Datrium started its cloud DR service in September 2019, when it launched DRaaS powered by VMware Cloud on AWS for Datrium DVX storage customers. In November 2019, Datrium said it planned to offer its DRaaS to any VMware vSphere customers, regardless of whether they were using DVX.

Datrium founders include former VMware principal engineers, chief architect Boris Weissman and Ganesh Venkitachalam.

Lee Caswell, vice president of marketing at VMware, said VMware was interested in the engineering talent of the ex-VMware people working at Datrium. He also said Datrium DRaaS would be a good complementary product to VMware Site Recovery, which is VMware's current DRaaS offering.

Caswell said VMware is interested in DRaaS because there is growing interest in hybrid cloud. He said DRaaS is a starting point into the cloud for many organizations, as they usually find it less expensive than keeping a secondary physical site for DR.

"For a lot of customers, DRaaS is that spear tip into hybrid," Caswell said.

Unlike VMware Site Recovery, Datrium DRaaS was designed from the ground up as a cloud service and can tap into Amazon S3 object storage. Cloud DVX and ControlShift are the key pieces of Datrium's DRaaS. Both run on AWS Elastic Compute Cloud. Cloud DVX replicates snapshots of on-premises VMs to Amazon S3, and ControlShift handles failovers to VMware Cloud on AWS after an outage. By contrast, VMware Site Recovery started from an on-premises front end. Caswell said the two cater to different market segments, so they will remain separate products post-acquisition.

Vinny Choinski, senior lab analyst at Enterprise Strategy Group, evaluated Datrium and said VMware is acquiring one of the best pieces of technology in the DRaaS market.

He said Datrium was easy to deploy and particularly well designed for performance and cost through its ability to use deep and cheap storage. He added that the timing of the acquisition is also fortuitous, as BaaS and DRaaS are doing well in a market full of decentralized, at-home workers.

"This acquisition beefs up VMware's BCDR offerings significantly," Choinski said.

Choinski added that VMware should be looking at data protection for containers, given VMware's recent focus on Kubernetes. He expects VMware to make a move in this direction, either by developing Datrium further or through acquiring another company and integrating its product.

Krista Macomber, senior analyst at Evaluator Group, said the acquisition is in line with VMware's goal of broadening beyond server virtualization. VMware wants to address hybrid cloud and multi-cloud environments, and DRaaS is a leading use case for both. There is also growing interest in DRaaS from enterprises looking to handle more operations remotely, simplify their daily IT management requirements, improve scalability and cut down their on-premises infrastructure footprint and costs.

"I see the logic behind the acquisition," Macomber said.

Macomber added that while VMware has many good reasons to shore up its DRaaS offerings with the acquisition, Datrium benefits from the deal by being able to tap into VMware's sales and marketing reach.

Datrium has roughly 150 employees. Caswell said it was too early to say whether there would be any staff changes after the acquisition closes. The companies must continue to act independently until regulatory approval, and Caswell could not comment on what will happen to current Datrium CEO Tim Page.

Page, who replaced Brian Biles as CEO in 2018, also has a VMware and EMC connection. He was COO at VCE, a cooperative started by VMware, Cisco and EMC to sell converged infrastructure. VCE was absorbed by EMC before its merger with Dell. Biles, a Datrium founder and its current chief product officer, was also a founder of data deduplication specialist Data Domain, which then-VMware parent EMC acquired for $2.1 billion in 2009.

Caswell added VMware can't work out what happens to current Datrium customers until the deal closes.

Although the deal was in the making before the outbreak of COVID-19, Caswell said mandated lockdown and the resulting increased remote workforce has made DR more compelling to customers. He said customers treated disasters like "weddings and funerals -- something that happened once in a while." The pandemic changed that, and customers started to realize simply having copies of their data isn't enough in a true disaster scenario.

"Many companies had to come to grips with the fact that backup is not DR," Caswell said.

VMware is rapidly expanding its technology platforms through acquisition. In 2020, VMware has acquired or declared intent to acquire AI-powered network monitoring platform Nyansa (Jan. 21), Kubernetes security startup Octarine (May 13) and AI-powered cybersecurity company Lastline (June 4). VMware acquired seven companies in 2019, including Carbon Black and Pivotal Software.

Datrium launched in 2016 with an architecture described as disaggregated hyper-converged infrastructure, with separate Compute Nodes and Data Nodes. Datrium's DVX software managed data across the nodes, providing features such as deduplication, compression, snapshots, replication and encryption. The underlying hardware consisted of x86 servers.