Commvault acquisition of Clumio for S3 speaks volumes
Commvault's acquisition of Clumio doesn't wade into billion-dollar territory, but it does illustrate some trends happening in the cloud data protection and backup markets.
Commvault Systems acquired Clumio this week for $47 million, a move that indicates the vendor's push to add depth to its Commvault Cloud platform while providing more evidence of momentum in the data protection and recovery markets.
Clumio provides cloud backup and recovery services with an emphasis on Amazon S3 object storage workloads. It's an underdeveloped area for Commvault, which has historically worked closer with Microsoft Azure, according to Krista Case, an analyst at the Futurum Group.
"It's a move to more quickly tuck these capabilities in than invest in building in-house," she said of the acquisition.
Jerome Wendt, an analyst at Data Center Intelligence Group, echoed Case by saying the acquisition gives Commvault an opportunity to "start selling Clumio tomorrow" to protect large S3 data stores, which are experiencing growth in the enterprise.
"A lot of that is being driven by AI," he said. "Any company using AI or having to use large language models or they're storing a lot of unstructured data … that would be what's driving these workloads."
Not only does the acquisition add specificity for AWS, it also gives Commvault greater access to a faster-growing market segment, according to Phil Goodwin, an analyst at IDC. The analyst firm estimates the backup-as-a-service market will grow at about a 19% compound annual growth rate for the next five years.
"Commvault is currently No. 5 in data replication protection in the marketspace, according to our numbers, so it gives them access to a huge installed base as well as complementary technologies for other workload coverage," he said. "And it's really bidirectional in terms of expanding market opportunity."
Clumio will remain a standalone offering for now and will be integrated into Commvault Cloud "in the coming quarters," according to Param Kumarasamy, vice president of product management at Commvault. Commvault noted the deal will be funded with cash on hand, is not material to its financials and is expected to close in early October.
Second acquisition in six months
Clumio is Commvault's second tuck-in acquisition this year after Appranix, a full-stack cloud application recovery provider that it acquired in April for an undisclosed sum. Experts see a clear relationship between the two purchases.
Clumio doesn't add a lot of coverage for them, but it adds depth for protection within AWS.
Brent EllisAnalyst, Forrester Research
"Clumio doesn't add a lot of coverage for them, but it adds depth for protection within AWS," said Brent Ellis, an analyst at Forrester Research. "I think what the bigger story here is connecting this to the Appranix acquisition -- and seeing [the two] as Commvault building greater capabilities for managing cloud data workloads."
Futurum Group's Case said the two acquisitions are evidence that Commvault is moving to add broader and deeper capabilities to its platform, but it also suggests that workloads are becoming more complex and enterprise needs are changing. In the past, data backup and recovery strategies might have focused on investing in point solutions as infrastructure moved from on-premises to virtual environments to the cloud.
"Now, they want a more unified holistic approach, [which] simplifies the day-to-day operations for admins, reduces protection gaps and [enables them to] do things like speed time to recovery," she said.
To that point, the acquisition of Appranix in the spring could help provide backup scanning for malware, Wendt said, which he described as becoming table stakes for backup providers.
"I think [Commvault realizes] enterprise customers want this," he said. "And they have to figure out how to deliver this without charging a bunch extra and deliver it in such a way that they can cost effectively deploy it."
The two acquisitions also add to the investment momentum in the data backup and recovery markets. Earlier this year, Rubrik became a publicly traded company, Acronis was acquired by a private equity firm, and a merger between Veritas and Cohesity is expected to close by the end of the year.
"There's a huge flood of cash into this market that's looking for a place to spend, as well as a place to get some returns," Goodwin said.
While traditional data protection and recovery is an $11.4 billion market, IDC believes the cloud data backup markets are poised to see a significant growth, especially the cyber recovery-as-a-service market, which it predicts will grow at about 114% year over year, according to Goodwin.
"There's a lot of opportunity in those very high-growth areas … for organizations and vendors to make strategic investments and take advantage of those rapidly growing market segments," he said.
Nicole Laskowski is a senior news director for TechTarget Editorial. She drives coverage for news and trends around enterprise applications, application development and storage.
