The Curious Case Of Carbonite And The Democratization Of Disaster Recovery

By Matt Kimball - April 2, 2018

Every time I hear the name Carbonite, I flash back to the days of listening to sports radio on my daily commute and hearing the commercials promoting the protection of your personal data. It seemed like every five minutes there was another once-hopeless person who was saved by the magic of Carbonite’s data protection and recovery. Protect family photos, bank records, wills, handed down family recipes—you name it, and Carbonite protected it for you.

Fast forward and those commercials are a memory—as is that Carbonite. Over the past few years, a new Carbonite has emerged through IP development and acquisition. It has evolved from a consumer-focused backup and recovery tool to a leading disaster recovery-as-a-service (DRaaS) provider for small and mid-sized companies. The question is, does Carbonite have a portfolio and go-to-market (GTM) strategy that sets it up for success? Or is it simply prolonging an inevitable journey along the path to irrelevance? What is the “new” Carbonite and how did we get to this point? It’s a little inaccurate to call this the “new” Carbonite. While Carbonite’s roots are in the consumer backup market, the company started acquiring companies with a B2B focus back in 2012. From there, Carbonite seems to have become a player in DRaaS through IP development, IP acquisition, and integration of a lot of somewhat competing products and services into its product portfolio. For historical reference let’s look at some of Carbonite’s significant acquisitions: Carbonite's past strategic acquisitions. As you can see, Carbonite has been slowly acquiring and integrating IP that delivers end-to-end backup and recovery software. What is not included in the above charts are the acquisitions Carbonite made in the email archiving space, and patent purchases it made from Rebit.
What exactly is "Democratization of Disaster Recovery"? In the IT world, disaster recovery is the ability for an organization to return to operations in the event of, well, a disaster. In my IT experience, my concerns were focused on hurricanes and earthquakes (I was in IT for the States of Florida and Oregon). Today, you can add ransomware to that list. Acronyms like RTO (Recovery Time Objective) and RPO (Recovery Point Objective) measure how quickly an organization can return to operations with the right applications and data. Disaster recovery can be an expensive game. The faster an organization needs to recover its applications and data, the higher the cost. In today’s digitized economy, the longer a company is offline, the greater the impact. The smaller the company, the more challenging the recovery process. Unfortunately, those smaller companies can ill afford to invest in DR in the same way as an enterprise. Therein lies the problem statement: the organizations most at risk from an outage can least afford to invest in a DR solution. Disaster Recovery-as-a-Service (DRaaS) changes this equation. Cloud-based backup and recovery services from companies like Carbonite allow for the small companies to employ DR strategies on-par with enterprise organizations, at a fraction of the cost, and without the required in-house IT expertise. This is what is referred to as the democratization of disaster recovery, and Carbonite is a leader in this space.
How Carbonite succeeds
I titled this article “The Curious Case…” because Carbonite’s story is unique: a company that established strong brand awareness and equity in the B2C market attempting to transition to the B2B market. IT organizations are a conservative bunch that don’t like to gamble. While Carbonite has made some smart moves, there are still many of us that think of their dear old “Nana” using Carbonite to back up their PCs. Below are a few things I think Carbonite can do to ensure success:
  1. Develop tighter integration:As mentioned previously, Carbonite has shown discipline and smarts in its acquisition strategy. Now is the time to tighten the integration between products, and tie those together through a single, unified interface. The competition in this space is crowded with a lot of name brands including Amazon AWS, Microsoft Azure, Veeam , Datto, and many others. Building tight integration of solutions from the device to the server can offer a clear differentiation for Carbonite.  
  1. Expand the Carbonite footprint:I guess we could make some jokes about carbon footprints and credits, but that seems too easy. Carbonite has a real opportunity to cross-market and sell tangential products to existing customers. For example, the 35,000 commercial customers Carbonite acquired as part of Mozy each have employees with phones, tablets, and laptops. This is a perfect opportunity to cross-sell Carbonite endpoint protection.
  1. Rebuild the Carbonite brand:I believe rebranding and establishing brand equity could perhaps be Carbonite’s biggest challenge. Unfortunately, Carbonite’s previous brand-building campaigns were very successful—pivoting from B2C to B2B will take longer, cost more, and require messaging discipline. Watching the integration of acquired products and companies into the Carbonite portfolio gives me confidence.
Closing thoughts Backup/recovery and disaster recovery are mature and crowded spaces. DRaaS is quickly reaching a mature state with many established players, but I like what Carbonite has done, and is doing. It has a solid product portfolio, a strong channel presence, and a large (and growing) customer base. The transition from consumer to commercial is difficult. Even in this, though, Carbonite has been smart in attacking the SMB segment first. Now that it has established a foothold, the enterprise should be in reach. It will be interesting to see how well Carbonite executes in integrating its product portfolio and rebuilding its brand. These success factors could ultimately determine Carbonite’s fate.
Carbonite has shown discipline and patience in executing against its strategy. For example, EVault was purchased from Seagate for $14 million.  A few years prior to that, Seagate purchased EVault for $185 million. Carbonite purchased Double-Take for $65 million, and several years earlier, Double-Take was purchased for $242 million by Vision Solutions. While Mozy may have been a bigger acquisition (approximately $146 million), Carbonite is also purchasing 35,000 commercial customers along with it. An opportunity for Carbonite would be to provide a solution that allows for IT administrators to manage their entire backup environment from a single, integrated interface—users, devices, and servers. Providing this tight integration could allow for Carbonite to expand its footprint in existing customers.
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Matt Kimball is a Moor Insights & Strategy senior datacenter analyst covering servers and storage. Matt’s 25 plus years of real-world experience in high tech spans from hardware to software as a product manager, product marketer, engineer and enterprise IT practitioner.  This experience has led to a firm conviction that the success of an offering lies, of course, in a profitable, unique and targeted offering, but most importantly in the ability to position and communicate it effectively to the target audience.