On Wednesday, Cohesity, a U.S. data security software company, informed Reuters about its agreement to acquire Veritas’ data protection business. The deal, valuing the merged entity at $7 billion, involves a combination of cash and stock. Cohesity’s CEO, Sanjay Poonen, expressed in an interview that this acquisition, supported by Japan’s SoftBank Group (9984.T), is anticipated to contribute to positive growth margins and facilitate the expansion of Cohesity into international markets. Together, the two companies generate $1.6 billion in annual revenue.
Cohesity’s platform unifies multiple point data management products into a single, cost-effective solution that helps eliminate storage silos across on-premises and cloud locations. It also reduces attack surfaces and provides advanced backup capabilities, such as frequent backups and a single UI for simplified management at scale. The company offers a pay-as-you-grow model that lowers operating costs and helps businesses keep their data safe from cyber threats and recover it quickly if needed.
It is one of a handful of companies working on multicloud systems designed to protect all types of data, including primary and secondary storage and application data. Others include VMware, Rubrik and PureStorage. Cohesity’s platform is based on the principle of hyper-convergence, where multiple components such as storage, servers and networking are built into a single system, reducing hardware costs and enabling quick changes to the system.
In addition to its backup and recovery functions, Cohesity offers a range of services that assist businesses with recovering from data loss incidents, such as ransomware attacks. Its software can scan a company’s backups and find data that was lost or corrupted, for example by identifying files with suspicious extensions. It then can restore those files.
The company has seen rapid growth in its subscription business, with its annual recurring revenue growing to more than $300 million in the most recent quarter and surpassing that figure in the year-ago period. Its net expansion rate — or the rate at which it adds new customers minus the number of those that leave — also exceeded 130% as of July 31, 2021, a key measure for subscription-based businesses.
During the first half of the year, Cohesity signed a series of partnerships that broadened its platform’s offerings. These included deals with Google Cloud, a major investor in Cohesity, Microsoft and IBM for a generative-AI product that automatically summarizes emails by subject or keyword. It also expanded its backup capabilities to NoSQL workloads, such as MongoDB and Cassandra, and distributed databases like Hadoop.
