Carbonite Acquires Double-Take In Bold Move To Add High Availability, Data Migration To Its Data Protection Line

Cloud-based data protection technology developer Carbonite said on Tuesday that it had acquired the Double-Take Software assets of Vision Solutions in a move to bring its channel partners new offerings related to high-availability and data migration.

This represents the second major acquisition for Boston-based Carbonite which originally started out as a provider of cloud-based backup technology to consumers but which is now focused on MSPs and solution providers looking to protect and manage the data of small and mid-sized businesses.

It comes after Carbonite's December 2015 acquisition of EVault, which brought the company into the disaster recovery and business continuity business.

[Related: Carbonite Completes Sales Reorg Following EVault Acquisition: Mellinger Stays, Doggett Leaves]

Carbonite is paying just over $65 million for Double-Take Software. Double-Take was acquired by Vision Solutions in 2010 for about $242 million.

The acquisition is an excellent move for Carbonite, said Ed Tatsch, president of ETS Networks, an Arden, N.C.-based solution provider, and Carbonite channel partner.

"It's beautiful," Tatsch told CRN. "It fills out the disaster recovery needs of Carbonite. Carbonite a few ears ago tried to bring a disaster recovery appliance to market. We were one of the guinea pigs. It stank."

Tatsch said Carbonite also seems to have made a good deal for Double-Take. "Seventy-five percent off," he said.

Double-Take was for a long time the industry standard for warm servers, which were servers that were kept running in a low power state which did not need software licenses but could quickly take over in case of a disaster, Tatsch said.

The company since then has matured its technology. "If Carbonite can wrap its arms around Double-Take, it will be a great opportunity," Tatsch said.

Most of ETS Networks' clients are smaller businesses, but they include several architectural and medical firms and, for those companies, enterprise-class protection is a must, Tatsch said.

"These firms often say they are fine with normal backups, and they are OK until they have a problem," Tatsch said. "Then they say they wish they had fast image-based restores. SMBs increasingly need enterprise capabilities and Double-Take brings that to Carbonite."

Mohamad Ali, Carbonite president and CEO, said during a late Tuesday analyst conference call that the acquisition of Double-Take not only expands Carbonite's business from cloud storage to disaster recovery and business continuity to high availability and data migration, but also brings partners from both organizations huge cross-sell and up-sell opportunities.

"It's really the best of both worlds ... We've also steadily moved up-market, evolving from focusing on consumers and small businesses to protecting the enterprise," Ali said.

Double-Take also brings Carbonite a business with 90 percent of sales coming through a channel base of over 500 channel partners, Ali said. "This provides a great opportunity to cross-sell more solutions to protect customers' mission-critical assets," he said.

Anthony Folger, Carbonite's chief financial officer and treasurer, said during the conference call that over 80 percent of Double-Takes business came from its high availability technology, and about 15 percent from its data migration technology. Both solutions were profitable, with gross margins of over 80 percent, Folger said.

Double-Take also brings Carbonite a customer base of about 6,000 businesses, Folger said. "We believe a high percentage of them represent a significant cross-sell opportunity for EVault," he said. "And we believe we have a significant cross-sell opportunity for our EVault customers."

Responding to an analyst question, Ali said that Double-Take brings Carbonite a unique technology that moves data from anywhere to anywhere. "That means, any physical to any virtual to any cloud ... You can failover into AWS, you can failover to Azure," he said. "If you are on Azure, you can failover to AWS. It's a compelling solution."

Double-Take has a relatively small cloud business, but that will be the springboard for Carbonite to increase its cloud capabilities, Ali said.

"Our intent is to grow that business as fast as we can," he said. "Over time, you'll see the subscription business grow much faster than the rest of the business."

Norman Guadagno, Carbonite's senior vice president of marketing, told CRN that his company has started looking at how to integrate Double-Take's solutions with existing Carbonite and EVault solutions, but was unable to provide details yet.

"We acquired EVault in December of 2015, and had a year to integrate the business," Guadagno said. "We are continuing to upgrade and enhance the offering. Now, with Double-Take, we see a clear path to do the same as we did with EVault, but at a faster pace. Remember, we just closed the acquisition a couple of hours ago."

Carbonite customers can easily take advantage of Double-Take's high availability and data migration solutions, which means cross-sell and up-sell opportunities for Carbonite, EVault, and Double-Take partners, Guadagno said.

"That is the easiest and fastest path to introduce customers and partners to our solutions," he said. "We'll look at overall pricing and packaging and make sure Double-Take will be in line with EVault. But beyond that, we will need time to look at how to do it."

Vision Solutions was acquired by investment firm Thoma Bravo in 2006. Thoma Bravo in 2016 sold Vision Solutions to another equity firm, Clearlake Capital Group. Clearlake retains an equity stake in Carbonite as a result of the Double-Take deal, although Guadagno was unable to state how much that stake was worth.