With Cohesity and Veritas having announced their impending merger, data protection and cyber resilience rivals Commvault and Rubrik are trying to promote themselves as safe havens for customers that they think may be overcome by fear, uncertainty and doubt.
Cohesity, the main company in this merger, has been putting out the message that the deal will benefit customers and that no Veritas NetBackup customer will be left behind. The software will not go end-of-life. There will be no forced migration to Cohesity’s backup and Cohesity customers could well benefit from Veritas’ cloud capabilities. By bringing Cohesity’s GenAI Gaia offering to the more than 300 EB of Veritas backup data then NetBackup users will be able to turn this dead data into an asset and mine it for insights.
That’s not the view of Commvault VP of Portfolio Marketing Tim Zonca, as outlined a blog entitled: “Avoid Veritas + Cohesity Chaos.” He writes: “Uncertainty and chaos should not come from vendors who [purport] to help maintain resilience.”
“The integration process between any two companies is a complex and time-consuming endeavor, likely taking several years to complete. At a time when data has never been more vulnerable to attacks, the transition can be quite chaotic for impacted customers and partners. But it doesn’t have to be.” Of course not. Come to Commvault: “When it comes to cyber resilience, there is no time for chaos. Commvault Cloud is the cure for chaos.”
Rubrik’s Chief Business Officer Mike Tornincasa blogs: “while the merger may make sense for Veritas and Cohesity, it will have a negative impact on their customers who are facing exploding volumes of data across Data Centers, Cloud, and SaaS with unrelenting threats of cyber attack, ransomware, and data exfiltration.”
Tornincasa says both Cohesity and Veritas are coming from positions of weakness: “Veritas has been struggling for relevance for the last ten years,” while “Cohesity has not been growing fast enough to raise another round of capital at an acceptable valuation.”
He chisels away at the financial background: “This is not a deal done in happy times. Cohesity’s valuation in 2021 was $3.7 billion. It should have increased considerably in the past three years if they had been healthy. Veritas was acquired by Carlyle Group (a Private Equity firm) for $7.4 billion in 2016. This would be a minimum $11 billion+ business if these businesses were growing. Instead, the combined valuation is presented as $7 billion.”
In his view: “Cohesity is now legacy,” and “We can anticipate Carlyle to bring the same playbook to the combined entity – no improved quality, higher prices and less choice.” So come to Rubrik instead.
While both Commvault and Rubrik cast FUD on the Cohesity-Veritas merger their FUD-elimination strategy is to suggest Cohesity and Veritas customers come to Commvault or Rubrik. This would mean Veritas or Cohesity customers then having to move to or adopt a separate backup regime. But that move to a separate backup regime is also what they are using to criticize Cohesity and Veritas. It’s nice to have a cake and eat it.
Cohesity CEO Sanjay Poonen told an IT Press Tour party in San Jose: “I don’t expect a single Veritas customer to defect. … Trust me. It’s not my first rodeo. … This is not Broadcom taking over VMware.”
He told us: “We’ll not talk about our roadmap until we meet regulatory approval,” and: “I want to keep our competitors guessing. … Let (them) spread the word it’s conflict and chaos. … I predict the FUD will fall flat.”
Cohesity and Veritas together will have around 10,000 customers; Rubrik has 6,000, and more than 300 EB under management. Poonen said the merged entity would count 96 percent of the Fortune 100 as customers; just four are missing.
Cohesity CFO Eric Brown said Cohesity is working on an AI-enabled file translation facility to get Veritas backup files accessible by Cohesity’s Gaia AI. There was no mention at all of migrating Veritas backup files to Cohesity’s format.
Cohesity plus Veritas revenue in 2024 will be circa $1.6 billion, which is comparable to Veeam. Rubrik has about about $600 million revenues today. The merged Cohesity-Veritas business will be very profitable in GAAP net Income sense, Brown said. “We fully intend to go public in due course,” and “our value when we go public will likely be $10 billion.”
B&F thinks the merger will spark interest in other backup supplier combinations. For example, IBM has a legacy backup customer base, which has just received an indirect valuation. Rubrilk may look to an acquisition to bolster its customer count and data under management. Veeam too may look to an acquisition to enlarge its business and regain a clear separation between itself and the other players. The backup business is a-changin.
