With the ink barely dry on the merger between Cohesity and Veritas’ enterprise data protection business, the industry is already buzzing with anticipation and questions. This $7 billion deal, which combines Cohesity’s, cloud-native approach with Veritas’ enterprise expertise, is poised to transform the landscape of backup, recovery, and data protection.
In our previous blog, we explored the potential impact of this merger. Now that the deal has closed, let’s take a deeper look at how this could reshape the market and what businesses, MSPs, and vendors should be watching for in the months ahead.
A Unified Data Protection Powerhouse
Cohesity and Veritas have set out to create a unified, AI-driven solution to tackle some of the most pressing challenges in data security and recovery today. By combining Veritas’ legacy enterprise solutions with Cohesity’s cloud-first products, they’re positioning themselves to offer a comprehensive, future-proof platform.
As Sanjay Poonen, Cohesity’s CEO, explained, the goal isn’t just to merge two companies but to consolidate an industry. With a shared vision of simplifying data management, reducing complexity, and streamlining recovery, this merger could bring faster innovation, greater product integration, and improved customer outcomes.
What This Means for the Vendor Landscape
The merger of Cohesity and Veritas has raised the stakes for other vendors in the backup and recovery space. For the major players like Rubrik, IBM, HPE, Veeam, and Dell, this deal presents a big challenge. Not just in terms of competition but also in terms of market share. The combined company now serves 12,000 customers, generating $1.5 billion in annual recurring revenue, making it a formidable presence.
Implications for Rubrik
With the combined force of Cohesity and Veritas looming large, how will their arch nemesis Rubrik respond?
Will they respond by acquiring another major vendor’s legacy backup business to strengthen its competitive position? This move could give Rubrik a broader enterprise presence, especially in areas with significant footprints of legacy solutions. However, like with the Cohesity and Veritas merger, integrating such legacy solutions would not come without challenges. There would be complexities in merging different architectures and customer bases, not to mention the difficulty of ensuring a seamless transition for customers.
Opportunities for MSPs
Managed Service Providers (MSPs) may find themselves in an interesting position following this merger. With a more comprehensive suite of products, the new entity offers MSPs the chance to deliver a more feature-rich, integrated data protection solution to their clients. The merger could also enable MSPs to offer more innovative services, including enhanced ransomware recovery and seamless cloud integration.
However, as Chris Wynn from IBM pointed out in his response to our previous blog, there’s also a potential risk. The expanded offerings may come with increased costs or require more complex implementation. For MSPs who choose to adopt the new tools early, there could be a valuable opportunity to negotiate better commercial terms as first movers. On the other hand, those who remain vendor-neutral might find the competition to offer diverse solutions even more compelling.
The Challenges Ahead
As with any major merger, there are challenges to overcome. The integration of two large companies is rarely seamless, and customers may experience short-term disruptions as products, roadmaps, and support teams are aligned. For businesses that rely on either Veritas or Cohesity, this could introduce some uncertainty.
Additionally, while the consolidation could drive down operational costs in the long term, the merger may result in higher pricing for enterprises, especially those heavily invested in either brand. As we’ve seen in other industries, fewer competitors can lead to less competitive pricing.
What Should Businesses Do Now?
For businesses relying on backup and recovery solutions, this merger presents both opportunities and risks. On the one hand, the combined company’s expanded capabilities could provide more streamlined solutions, enhanced features powered by AI, and improved recovery options for cyberattacks like ransomware. On the other hand, as the industry consolidates, staying diversified in your data protection strategy remains wise.
The key takeaway? Stay agile. The backup and recovery space is evolving rapidly, and companies must be prepared to adapt to new tools and solutions as they emerge. Keeping an eye on the competition and diversifying your strategy, whether by staying with multiple vendors or exploring the new offerings from this mega-merger, will be essential in maintaining resilience against an ever-evolving threat landscape.
In our opinion, this merger is likely to trigger more acquisitions and mergers of data protection, security, and cyber resilience businesses from both the big vendors and smaller niche providers. While the full impact won’t be felt overnight, the shake-up is already underway, and businesses must be ready to pivot as the industry evolves.