Cohesity And Veritas Join Forces To Protect Critical Data

By Robert Kramer, Patrick Moorhead - February 22, 2024

Cohesity has agreed to acquire Veritas’ data protection operations, marking a major transformation in the data security industry. The combined entity, which Cohesity says will have a valuation of $7 billion, will take advantage of the significant growth in the data security field.

In a discussion I had yesterday with Cohesity’s CEO, Sanjay Poonen, I asked him to outline the practical benefits the deal will have for existing and future customers. Poonen, who will also lead the combined company as CEO and president, said, “By merging Cohesity and Veritas, the resulting entity will emphasize product innovation and a strong commitment to customer obsession, backed by an engineering team that is twice as large as that of any competitor. This expanded team will particularly focus on enhancing security and AI capabilities to set new standards in these critical areas.” The combination also leverages the knowledge of a broad user base across different global industries; this collective input from users can help shape more relevant and practical advancements for the combined company going forward.

Full disclosure: Cohesity is a client of Moor Insights & Strategy, as are its competitors Dell, HYCU, IBM, Rubrik and Veeam, but this article reflects my independent viewpoint as an analyst. Note also that this article contains contributions from Moor Insights & Strategy CEO and chief analyst Patrick Moorhead.


Once the transaction is complete, according to the companies, the new entity will have combined revenues of more than $1.6 billion, with an annual recurring revenue of $1.3 billion. It will serve 10,000 customers, including 96 of Fortune 100 and 80% of Fortune Global 500 companies.

The transaction is financially supported by SoftBank Group from Japan. Cohesity’s other investors include Haveli Investments, Premji Invest and Madrona. The deal is anticipated to be finalized by the end of 2024.

Veritas intends to use its residual assets outside of data protection to establish a new entity named DataCo focused on data compliance and backup. Lawrence Wong, presently serving as the senior vice president of strategy and products at Veritas, will spearhead that venture. Assuming the role of CEO at DataCo, Wong will oversee the incorporation of Veritas’ InfoScale, Data Compliance and Backup Exec products into the new company.

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Veritas Technologies has established itself as a major player in the data protection and backup market, offering a broad portfolio of solutions. Cohesity specializes in AI-powered data security and management, offering features such as immutable backup snapshots and AI-driven threat detection. Together, the companies will be able to offer multi-cloud data protection backed by special capabilities in generative AI and other technologies.

Veritas is owned by The Carlyle Group, which purchased the company in 2016 for $8 billion. Veritas has 80,000 customers, which includes 91% of the Fortune 100, and is based in Santa Clara, California. Meanwhile, Cohesity has an estimated annual revenue of $450 million, with 1,500 employees based in San Jose, California.

According to Cohesity, there will be continued investments in all of Cohesity’s products as well as Veritas’ NetBackup, NetBackup Appliance and Alta Data Protection offerings. This transaction also creates a large ecosystem for customers, including valuable partnerships with cloud service providers, value-added resellers, system integrators and hardware OEMs.

It is estimated that global expenditure on security and risk management technology as a whole will exceed $200 billion this year, a 14.3% increase from 2023—and data security is a particularly hot area within that sector. This rise is attributed to the ongoing reality of cyber threats, ransomware and data breaches. As cybercriminals exploit vulnerabilities in business networks and systems, companies of all types and sizes face risks to the confidentiality, integrity and availability of critical data.

Analyst Notes

This deal brings together two leading companies in the data protection industry, combining their technological strengths. The move is expected to make the resulting organization one of the major players in the data protection sector. We believe that the new firm will be able to leverage the combined expertise and strengths of both companies to address the industry’s challenges more effectively.

My colleague Moorhead assessed the deal like this: “I believe customers could benefit from the combination of Cohesity’s simple and secure high-performance platform and AI-enabled data insights, together with Veritas’ global footprint and cloud-native capabilities.” He added, “The combined company will benefit from scaled R&D efforts and industry-leading capabilities to help make customers more secure and offer them advanced capabilities in data management and insights.”

Considering the market positions of Cohesity and Veritas, this transaction is a historical milestone for the data protection and cyber resiliency field. Veritas, known as a traditional stalwart in the industry alongside others such as Commvault, Dell, IBM and Veeam, is joining a company that’s part of a group of rapidly growing firms; besides Cohesity, this group includes HYCU, Rubrik and Druva. (Links in the company names will take you to articles I’ve written in the past year on these different companies.)

We expected some pushback from competitors such as Commvault, which sees this merger as a challenge for the industry. “This deal between Cohesity and Veritas could create complete chaos for customers,” said Commvault’s chief customer officer, Sarv Saravanan, in a prepared statement from its PR agency. “Platform integration challenges and redundant product portfolios could take years to address. With cyberattacks increasing in severity and frequency, there’s no time for that.”

Cohesity and Veritas understand very well the work ahead of them regarding technological integrations, and Cohesity CEO Poonen shared with Moorhead that he’s quite confident this can be done with minimal disruption. This will be very important for the customers of the combined company.

Wrapping Up

Acquisitions always have upsides and downsides. This one is anticipated to bring technological improvements for customers through increased access to resources, research and development and innovation, potentially leading to better product and service quality. Business combinations typically target operational efficiencies, but these don’t always translate into reduced costs for customers. However, this deal can potentially broaden the combined entity’s global footprint to enhance overall customer support.

There are downsides to consider, such as decreased competition, which may lead to pricing variability. Privacy concerns could also emerge, particularly regarding how the two merging entities will synchronize their privacy and data security policies.

All things considered, this transaction represents a dynamic shift for the industry—one that we believe is likely to drive innovation and that immediately changes the pecking order among vendors. The hope is that it will also provide customers with the advanced technologies they need for the unending fight against cybercrime.

VP & Principal Analyst at Moor Insights & Strategy | + posts
Robert Kramer is vice president and principal analyst covering enterprise data, including data management, databases, data lakes, data observability, data analytics, and data protection. Robert has over 30 years of proven experience with startups, IT companies, global marketing, detailed strategies, business modeling, and planning, working with enterprise companies, GTM assets, management, and execution.
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Patrick founded the firm based on his real-world world technology experiences with the understanding of what he wasn’t getting from analysts and consultants. Ten years later, Patrick is ranked #1 among technology industry analysts in terms of “power” (ARInsights)  in “press citations” (Apollo Research). Moorhead is a contributor at Forbes and frequently appears on CNBC. He is a broad-based analyst covering a wide variety of topics including the cloud, enterprise SaaS, collaboration, client computing, and semiconductors. He has 30 years of experience including 15 years of executive experience at high tech companies (NCR, AT&T, Compaq, now HP, and AMD) leading strategy, product management, product marketing, and corporate marketing, including three industry board appointments.