Legacy backup solutions won’t deliver cyber resilience:
Backup & Recovery are table stakes, and Cyber Resilience is now a boardroom topic
Legacy B&R won't protect you from ransomware and keep your business running
Entangled with 30-year-old Veritas, Cohesity is now legacy
Veritas and Cohesity customers, we'd like to share an alternate point of view to what you're hearing
For over a decade, I've enjoyed a front-row seat in what was once called the "backup and recovery" market. With recent consolidation events in the industry, my inbox has been flooded with questions about the current state of affairs.
Market consolidation is an age-old response to market transitions - a pattern we've observed throughout history. Recall the advent of the smartphone era with the introduction of the iPhone. Apple didn't just launch a product; they revolutionized the fundamental purpose of mobile phones. This disrupted the status quo and left many incumbents scrambling, with only those designed with internet capabilities at their core surviving.
Ten years on, we're witnessing an analogous upheaval in backup and recovery. When we started Rubrik, we made some hard architectural decisions that made us different. We didn't just build another data storage solution. We anticipated the convergence of data protection and cybersecurity into a unified data security platform purpose-built for cyber resilience.
Our vision for cyber resilience proved prescient in 2017 with the onset of the ransomware era. With foundational decisions made ten years ago, Rubrik transformed the backup and recovery market into data security to deliver cyber resilience.
Cyber Resilience: New Use Case for a New World
Cyber resilience is a boardroom topic. Why? Because despite the cybersecurity industry earning $200 billion by selling a myriad of prevention tools, the breaches continue. No defense is impenetrable, so the focus has transitioned from pure prevention to a holistic stance on cyber resilience.
It's an approach that assumes breaches will occur and focuses on maintaining uninterrupted operations in the face of cyber threats. True resilience is anchored in data security, the cornerstone of our platform. You can't simply retrofit dated architecture to achieve a secure cyber resilience platform. It must be designed natively from the ground up.
Cohesity is Now Legacy
The Veritas and Cohesity consolidation is a survival tactic. One wonders why this merger happened. Do we have any examples of a successful outcome of a growth company merging with a competitive legacy solution? After all, the iPhone didn't merge with Nokia.
Veritas was the leading enterprise backup and recovery solution in the 1990s and early 2000s. Cohesity built a storage-first next-generation backup solution that couldn't make the cyber resilience transition. This consolidation is the result of the two companies' struggles to adapt to the new market demands imposed by cyber threats and the transition to cloud computing.
Their momentum slowed, their growth suffered, and they had to combine to survive. Cohesity's valuation in 2021 was 3.7B. It would have increased considerably in the past three years if they had been growing. Veritas was acquired by Carlyle (a Private Equity firm) for $7.4B in 2016. If they have been growing, logic would dictate they would be worth significantly more today. Starkly, the combined valuation isn't even 11.1B, it's not even 10B, it's marketed as $7B, with $2B in new debt (which means it's worth only $5B).
Moreover, integrating their technologies and product lines presents a monumental challenge, reminiscent of the arduous consolidations I witnessed at EMC with Legato, Avamar, and Data Domain. The Cohesity-Veritas merger will have significant negative impacts on their customers.
What it Means for Cohesity-Veritas Customers
For customers of Cohesity and Veritas, the merger introduces a period of uncertainty. The promise of maintaining both product lines is, historically, unrealistic. Cohesity's CEO says both product lines will live on. That seems impossible, given the complete portfolio overlap and the financial pressure to generate cash to service the $2B debt.
Operational complexities will require them to focus on integrating the companies and maintaining legacy systems rather than innovating for customers. History has shown us customers of each company can expect:
Uncertainty while product roadmaps, overlap, migration paths, and cost pressures are rationalized
Very little innovation as the remaining employees that were not made redundant focus on the above rationalization
To ultimately remain with legacy backup and recovery while the necessity for cyber resilience only becomes more acute
This uncertainty will be the primary state for the next 12-18 months as the deal itself is slated to close by the end of the year.
Customers cannot afford to stop and wait around. The stakes are too high to trust your future to legacy backup solutions. If you are a Veritas or Cohesity customer pondering this limbo state, wondering what other options are out there, we have a point of view we would love to share with you and an offer that may be too compelling to ignore.
Hello. We are Rubrik.
Our mission is to secure the world's data. We were founded at the same time as Cohesity but have grown in size and value steadily over the past ten years. We have over 6,000 customers, $800M in ARR, and are growing at 40%. We are a leader in the Magic Quadrant and the most innovative of all vendors. Our business is built on the concept of Cyber Resilience.
We provide core backup and recovery services that compete with and displace both Veritas and Cohesity, as well as cyber recovery and cyber posture solutions, which together we define as "complete cyber resilience." As a result, we have a $10M Ransomware Recovery Warranty, not because we are in the business of paying ransoms, but because we have never had to pay one. We have a Gartner Peer Insights score of 4.7/5, and an NPS score >80. We support leading enterprises, healthcare systems, and government entities that believe data is a critical asset worthy of the best protection.
We'd love to connect with you and show you what a partnership with us could look like.
Until then, I encourage you to discover the future of data security and rise above the next cyber disaster at our upcoming Cyber Resilience Summit.