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Carbonite Closes Mozy Acquisition in Pursuit of DRaaS Market Dominance

Cloud Backup

**Editor’s Note: Please click here for a recap of the biggest channel-impacting merger and acquisition news from February.**

Carbonite Tuesday said it has closed its acquisition of cloud backup service provider and longtime rival Mozy, Inc. from Dell Technologies.

The deal, first announced last month, brings two of the first cloud backup providers under one umbrella, expands Carbonite’s endpoint base and gives it a solid foothold into the business and enterprise sectors Dell EMC plays in so well.

The total purchase price for Mozy was $145.8 million in cash, subject to potential adjustments for working capital, funded with cash on hand and funds available under a new revolving credit arrangement.

In an earnings call last month, Carbonite CEO and president Mohamad Ali told investors that Mozy was the first company he wanted to acquire upon becoming CEO three years ago.

Carbonite's Mohamad Ali

Carbonite’s Mohamad Ali

“We were patient and we waited,” Ali said on the call. “The asset came on the market and we were there, ready to do the deal.”

Mozy is just the latest in a string of acquisitions. Last year, Boston-based Carbonite bought Datacastle’s endpoint backup product portfolio, giving it an entry point into the lucrative SMB market, and Double-Take Software to improve its high-availability technology.

The company brought Seagate’s EVault cloud backup and disaster-recovery-as-a-service (DRaaS) unit – which operates primarily in the midmarket – into the fold in 2015. The EVault move is one that Ali says has paid big dividends for Carbonite and serves as a model for how the company will move forward with integrating Mozy into its platform.

“As we leverage the much, much more efficient Carbonite cloud infrastructure and effectively migrate the Mozy infrastructure onto our infrastructure, we expect to drive tremendous profitability and that’s something we’ve done before,” Ali told the investors on the call. “We did it very successfully with EVault, and we expect to do it very successfully here.”

Carbonite is in a race to build a robust, comprehensive business data-protection portfolio in a market that’s growing more crowded by the day. Like many of its competitors, including Datto and giants IBM and Microsoft, its acquisition strategy is designed to quickly expand its service offerings, customer base and indirect sales channel in order to maintain a competitive edge. Its recent acquisitions gave it product capabilities that protect the data chain from endpoints to servers, physical and virtual, with on-premises and cloud storage options. They also brought new markets and customer segments within Carbonite’s reach.

Last year, Carbonite revamped its partner program to bring the various channels from the providers it acquired under one umbrella, with a common partner portal, a new two-tier framework, revamped partner incentives and stronger sales, marketing and technical support.

“The program not only simplifies the engagement with partners across the product portfolio, but also makes it easier for partners to understand how to engage with and profit from their relationship with Carbonite,” Jon Whitlock, Carbonite’s vice president of channel sales and marketing, told us in August. “New incentives are included that focus on value and the level of investment partners make in the partnership, ones that helps our key partners differentiate themselves in the data-protection marketplace with Carbonite.”

Details on exactly how the company will integrate Mozy into its product portfolio and channel program are still forthcoming, and Carbonite says it will announce Mozy updates and showcase the Carbonite Data Protection Platform at Dell Technologies World 2018, April 30-May 3, in Las Vegas.


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