Partners: After Carbonite Buy, OpenText Should Focus On SMB Market

Solution providers and MSPs working with Carbonite and Webroot see those two as powerful partners in the small business and midrange business market, and are optimistic about the acquisition as long as OpenText keeps that SMB focus.

Carbonite solution providers see OpenText's planned acquisition of Carbonite and Webroot as an opportunity for OpenText to expand its business into the SMB market, but they hope the company doesn't take its eye off the importance of that market.

Several channel partners told CRN that the acquisition is a big step for Waterloo, Ontario-based OpenText into the SMB market as long as it doesn't reduce the ability of Carbonite and Webroot to reach their strong SMB base.

OpenText on Monday unveiled a definitive agreement to acquire Boston-based Carbonite in a cash deal worth $23 per share, for a total value of $1.42 billion, inclusive of Carbonite's cash and debt. That is about 2.8-times the trailing 12 months of Carbonite's and Webroot's GAAP revenue.

[Related: 10 Things You Need To Know About The Carbonite-Webroot Deal]

Cloud data protection technology developer Carbonite earlier this year acquired cloud-based cybersecurity vendor Webroot in a $618.5-million deal.

OpenText's acquisition of Carbonite is slated to close in about 90 days.

OpenText and Carbonite both declined CRN requests for more information.

OpenText is a developer of enterprise information management, or EIM, technology the company said helps businesses grow while reducing costs and risks from governance and security by improving business insight. Its EIM offerings manage the creation, capture, use and eventual lifecycle of structured and unstructured information.

The company does offer an enterprise information security offering, but currently does not have a major focus on the enterprise.

OpenText's enterprise focus makes it hard to determine what the company brings to the table for Carbonite's and Webroot SMB customer base, said Scott Wolff, president of LanServ, a Maryland Heights, Mo.-based MSP that partners with those two vendors.

While OpenText doesn't really seem to have an MSP focus, Carbonite and Webroot have had a strong focus on the MSP business, Wolff told CRN.

However, he is taking a wait-and-see approach to the planned acquisition given his experience with Carbonite's late-2015 acquisition of Evault, which was Carbonite's first move from a consumer and small business focus into the midrange business market. Wolff was an Evault partner at the time.

"I was originally concerned when Carbonite bought Evault," he said. "Carbonite was the mom-and-pop backup provider. It had different scenarios and setups and connectivity from those of Evault. But I was pleasantly surprised when Evault moved to Carbonite."

Wolff said he looks at business with an "if it ain't broke, don't fix it" view.

"I'm just really hoping OpenText doesn't come out with guns blazing, but instead tells us what they are going to do with Carbonite," he said. "Reassurance is always good."

LanServe has a lot invested in Carbonite and Webroot, and works with those two companies on R&D, Wolff said.

"We have redundancies and failover plans for our vendors, of course," he said. "But I'm optimistic. I'm hoping the transition is good. I don't want to see a change in the people we work with from the top down to the channel reps that go to bat for us."

Michael Goldstein, president of LAN Infotech, a Fort Lauderdale, Fla.-based solution provider and MSP, said the IT industry is living in an age of putting companies together, and that usually the bigger a company it, the better it can compete.

Goldstein, whose company works with both Carbonite and Webroot, told CRN that he has not had a chance to understand OpenText yet, but he hopes the acquisition will be as smooth as that of Webroot was by Carbonite.

"So far, the only change has been that Webroot now calls itself 'Webroot, a Carbonite company,'" he said. "That acquisition brought backup and security, two hot commodities, together. This is a competitive space... We'll see how OpenText changes things."

The acquisition makes sense for OpenText, said Ed Tatsch, president of ETS Networks, an Arden, N.C.-based solution provider and channel partner to both Carbonite and Webroot.

"Carbonite has the backup technology and Webroot has the security technology on the desktop side, and those are things OpenText doesn't have," Tatsch told CRN. "OpenText is geared to the enterprise. This will be an opportunity to bring OpenText to the desktop."

For now, it is unclear where OpenText is heading with the planned acquisition, Tatsch said.

"I'm guessing it's heading towards the SMB space," he said. "It's a huge step for OpenText. They are really focused on the enterprise market."