09 January 2020 14:34
Veeam is being acquired by private equity firm Insight Partners in a $5-billion bet that Veeam can grow its U.S. market business to become the dominate data management and data protection technology provider it is in Europe. New York-based Insight Partners on Thursday unveiled its planned acquisition of Veeam with an eye on bringing new resources to bear on building Veeam's U.S. business to take advantage of the need for cloud-based data management and data protection. As part of the acquisition, Baar, Switzerland-based Veeam's two co-founders, CEO Andrei Baronov and Ratmir Timashev, executive vice president of worldwide sales and market, will step down from their executive roles and from the company's board of directors after helping transition the company to its new owner. The acquisition, which represents a big bet on the part of Insight Partners, comes just two days after the private equity company made another huge acquisition, that of acquire IoT security startup Armis, at a $1.1-billion valuation. Veeam as an independent company has been doing very well, said Danny Allan, the company's new chief technology officer.
However, Allan told CRN, the acquisition is aimed at getting Veeam ready for growth in data management, particularly as the cloud becomes the driver for that technology. Veeam in May of 2019 crossed the billion-dollar annual sales line, and for 2019 has seen significant growth in both annual sales and revenue, Allan said. Timashev late last year told CRN that Veeam's growth path is focused heavily on data management in the fast-growing Office 365, Amazon Web Services backup, and Microsoft Azure backup markets. He said that Veeam is already helping clients with their backup and recovery requirements, and that the next step for the vendor and those clients is to take advantage of the data they are protecting to get value from that data. Making Veeam the heart of data management for those customers' Office 365, AWS, and Microsoft Azure environments are central to growth for Veeam, Timashev said.
Insight Partners already has a close-up look at the potential for growth with Veeam. Insight Partners brings to Veeam a strong focus on the software business, as well as experience in helping build the kind of software-as-a-service capabilities required to help Veeam grow, said Mike Triplett, a managing director of Insight Partners and new board member of Veeam. The private equity company has a three-stage Onsite program it uses to help the companies in which it invests grow, including the Startup stage of focused on companies looking for early growth in their markets, the ScaleUp stage for companies with strong businesses, and the Corporate stage for companies ready for IPOs or other exits, Triplett told CRN. Triplett said Insight Partners can bring the right resources to bear to move Veeam from the "ScaleUp" stage to the "Corporate" stage. "The team did a phenomenal job of building one of the largest software companies in the world with a focus on Europe," he said. Insight Partners' plan is to continue to grow substantially in the U.S., Triplett said. Insight Partners has already helped over 40 companies through the IPO stage. Triplett said his company has no IPO in mind yet for Veeam, but that could happen/ Solution providers hope that the move by Insight Partners to invest in growing Veeam's U.S. business will pay off for the channel given Veeam's reputation as a channel-friendly vendor. Manny Punzo, director of data protection and management at Technologent, an Irvine, Calif.-based solution provider which partners with Veeam, told CRN that Veeam has been a growing part of his business, and that he expects 2020 will see his company working closely with Veeam and its competitor Commvault to push his data protection business. Punzo also looks forward to Veeam doing more to build on the data management side of its business. Only a few companies so far have been doing a good job of bringing together data governance, ransomware protection, continuous data protection, automated disaster recovery, HIPAA compliance and a host of other management services to their data protection technologies, he said. Johnson said the acquisition of Veeam by Insight Partners could be the trigger for growth in the U.S., particularly in the enterprise market. "We've been trying to get Veeam into our enterprise customers, and this move may help," he said. Veeam's co-founders are planning to leave the company after helping transition the Baar, Switzerland-based data management and data protection software vendor to become part of the portfolio of New York-based private equity company Insight Partners. Insight Partners on Thursday said it will acquire Veeam in a deal valued at about $5 billion. This is already the second big acquisition for Insight Partners in only the first nine days of 2020 after Insight said it plans to acquire IoT security startup Armis at a $1.1-billion valuation. [Related: Veeam CEO Ratmir Timashev On Selling N2WS And Pushing AWS, Azure Backup Leadership] Andrei Baronov, co-founder and CEO, and Ratmir Timashev (pictured), executive vice president of worldwide sales and market, will both step down from their current executive roles and from the board of directors after helping transition Veeam to Insight Partners and its new leadership, Insight Partners said Thursday. Going forward, William Largent, who has served as Veeam's executive vice president of operations, will become the company's new CEO. Veeam and Insight Partners both told CRN that the acquisition will help drive Veeam's next stage of growth. The company has since become the leading data management and data protection vendor in Europe, but is only the fourth-largest vendor in the U.S. Timashev late last year told CRN that Veeam's growth path is focused on three big markets: Office 365, AWS backup, and Microsoft Azure backups. To get that kind of growth, however, requires a solid U.S. presence, said Danny Allan, Veeam's new chief technology officer. News of Baronov's and Timashev's plans to exit Veeam caught Veeam's channel partners by surprise. However, one partner said that while the executives have done well in growing Veeam, the new U.S. focus could boost the company's channel business. Steve Johnson, president and CEO of Corus360, an Atlanta-based solution provider and Veeam channel partner, told CRN that his company was an early adopter of Veeam and has built its managed services business around Veeam Cloud Connect. "That allows me to enable customers to use the Veeam platform to back up their data to my secure data center," Johnson said. Johnson said it will be sad to see Veeam's co-founders, especially Timashev, leave the company. Johnson said he sits on Veeam's partner council, and has found Timashev to be not only knowledgeable about the storage market but also deeply concerned about how channel partners are faring. Johnson said he plans to keep an eye on Timashev. "I'd love to see Ratmir start a new disruptive company and let me be his first partner in the southeast," he said. "He's one of those guys you tend to follow after they build great channel companies.