Cohesity World’s Largest Data Protection Software Provider
Following final confirmation of merge with Veritas’ Enterprise Data Protection Business
This is a Press Release edited by StorageNewsletter.com on December 12, 2024 at 2:02 pmSummary:
- Cohesity Becomes #1 in Data Protection Software Market Share, Serving more than 12,000 Enterprise Customers, With 100s EBs of the World’s Data Under Protection
- Cohesity Offers One of the Broadest and Deepest Sets of Data Protection Capabilities in the Industry, Including Zero-Trust Data Security Principles and AI-Powered Data Insights
- Cohesity Reiterates ‘No Customer Left Behind’ Commitment for both Veritas and Cohesity Customers While Expanding Cloud, Security, and AI Capabilities
- Cohesity Becomes the Fastest Company in the Data Protection Space to Cross $1.5B+ in Annual Revenue
Transaction Funded by Series H Financing Round Led by Haveli Investments and Term Loan B Facility Arranged by JP Morgan
Cohesity, Inc., a leader in AI-powered data security, announced the completion of its combination with Veritas’ enterprise data protection business, ushering in a new era in protecting the world’s data. Now the world’s largest data protection software provider by market share, Cohesity will serve over 12,000 customers – including over 85 of the Fortune 100 and nearly 70% of the Global 500 – and protect 100 EBs of the world’s data. With the completion of this combination, the company now offers the broadest workload support and 1 of the largest partner ecosystems in the data protection industry.
Cohesity has become the fastest data protection company to cross $1 billion in revenue in the data protection industry, reaching that milestone in 11 years. On a pro forma adjusted basis for the fiscal year ending July 2024, the combined entity had revenue of over $1.7 billion, annual recurring revenue (ARR) of $1.5 billion, and a 28% adjusted cash EBITDA margin.
“This is a major milestone in the 11-year history of Cohesity, whose mission is to protect, secure, and provide insights into the world’s data,” said Sanjay Poonen, president and CEO, Cohesity. “By combining Cohesity’s scale-out architecture and strong Generative AI and security capabilities – with Veritas’ broad workload support and extensive global footprint, our customers and partners stand to gain more value from their data than ever. As promised, we will honor our “no customer left behind” commitment, supporting existing products from both companies for years to come. As we begin this new chapter, we are committed to driving industry-leading cyber resilience innovations to ensure we are the world’s preeminent choice for data security with differentiated AI capabilities.”
“We want to congratulate Cohesity on completing their Veritas acquisition. NVIDIA is excited to partner with Cohesity as they build their GenAI products on top of the NVIDIA AI Enterprise,” said Jensen Huang, founder and CEO, NVIDIA Corp. “Cohesity is backing up and protecting the world’s data – a goldmine of business value that customers can unlock with GenAI.”
“Bringing together Cohesity and Veritas’ data protection business – the largest deal in the data protection space to date – addresses the growing need in the market to go beyond backing up and recovering data to handle issues around data security and insights for more robust cyber resilience,” said Daniel Newman, CEO, The Futurum Group. “Cohesity now has the largest workload support with world-class security and insight capabilities, a large presence, and a massive joint ecosystem of service providers, VARs, SI partners, and OEMs. Sitting in a unique position at the junction of multi-cloud, security, and AI, Cohesity is on an ambitious growth trajectory, with an experienced leader in Sanjay at the helm. We believe the company will be a key player as they expand beyond data protection, helping global CIOs exploit the potential for AI and turn organizational data into a competitive advantage.“
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New Era in Protecting the World’s Data: How the Combination Will Benefit Customers and Partners
The combination of Cohesity with Veritas’ data protection business provides:
- Industry-leading Innovation and Capabilities: The combined company will offer cloud-scale and AI-powered data security and management, Generative AI-driven insights, an easy-to-use management interface, and a comprehensive multicloud data protection portfolio. Cohesity now supports the broadest range of workloads within a highly scalable modern architecture.
- Peace of Mind for Current Customer Investments: For years to come, the company will continue to invest in and advance the roadmap and strategy for all products brought from both companies into the new combined portfolio. This includes all existing Cohesity products and services and all the Veritas solutions covered by the combination agreement, including Veritas NetBackup, Veritas NetBackup appliances, and Veritas Alta data protection offerings.
- Global Scale and Support: With an industry-leading Net Promoter Score and a global go-to-market footprint, Cohesity now supports a combined global, ‘follow-the-sun’ customer success organization. The company is committed to helping enterprises succeed by consistently providing positive outcomes for customers’ support experience and needs.
- Advanced AI Capabilities: Patent-pending, first-to-market AI capabilities offer customers tremendous data management, protection, and resiliency benefits and help them gain more significant insights and create value for the whole company from their data.
- Strong Partner Ecosystem: The combined company brings together one of the industry’s largest partner ecosystems, covering cloud service providers, security players, VARs, system integrators, MSPs, technology ecosystem partners, distribution partners, and hardware OEMs.
Cohesity will target a total addressable market (TAM) of $40+ billion, which includes IDC’s data replication and protection software market. IDC’s’ Semiannual Software Tracker, 2024H1, estimates the data replication and protection software market to be $12.3 billion in projected vendor sales in 20242. The expanded go-to-market breadth, geographic footprint, and R&D resources will allow the combined company to accelerate new customer adoption and help drive the deployment of innovative solutions within the fast-growing data security and management segment. The transaction values the combined company at over $7 billion.
Transaction Details and Advisors
The combined company received support from current marquee investors, including Sequoia Capital, Softbank Vision Fund I, Wing Venture Capital, Premji Invest, and Madrona. The Carlyle Group is now one of the largest shareholders in the combined company as the Series G lead investor.
The transaction was funded by a Series H investment round led by Haveli Investments, which provided the majority of equity in the transaction and is now one of Cohesity’s largest shareholders. Coatue, Sapphire Ventures, and Dragon Fund were also key investors in the Series H investment round. This robust backing ensures the financial and operating resources essential for propelling the company’s growth, extending its global presence, and driving continued product innovation.
“We are thrilled to lead Cohesity’s latest investment round to fund this transformative transaction,” said Brian Sheth, CIO, Haveli Investments. “This combination creates a new data protection and cyber-resiliency powerhouse. We expect the resulting scale and combined resources to accelerate product innovation, extending Cohesity’s product leadership. I look forward to serving on Cohesity’s Board of Directors and working closely with Sanjay and the management team as we focus on taking Cohesity’s business to a new level of success.”
Complete listing of Cohesity’s leadership team, including the company’s Board of Directors
J.P. Morgan Securities LLC served as Cohesity’s exclusive M&A financial advisor, and JPMorgan Chase Bank, N.A., arranged and committed financing for the transaction. BofA Securities, Inc. also served as financial advisor to Cohesity. Simpson Thacher and Bartlett LLP and Gunderson Dettmer LLP served as primary legal advisors to Cohesity. Guggenheim Securities and Morgan Stanley & Co. LLC acted as financial advisors to Veritas. Alston & Bird LLP, Latham & Watkins LLP, and Wachtell, Lipton, Rosen & Katz served as Veritas’ primary legal advisors for the transaction.
1 Based on industry analyst and internal data
2 IDC’s Semiannual Software Tracker, 2024H1, Nov. 2024
Comments
The deal is done and it appears aligned with the original plan announced last February. We invite our readers to read the article we published at that time as we detailed many aspects of it and the impact on the market. This merge has shaken the industry and really redistributed the cards with an intense race and battle among the top 4 leaders.
Clearly the deal has to generate some balanced positions at the executive level, at least for the coming months. At the executive level, we see a few key positions occupied by ex-Veritas leaders like Deepak Mohan, EVP Engineering and Product, Brian Hamel, EVP Worldwide Veritas Field Operations, Lenny Alugas, Chief Customer Experience Officer, or Lissa Hollinger, Chief Marketing Officer. Also, we notice that Mohit Aron, the founder of Cohesity and former CEO, CTO..., and recognized industry visionary is (just) listed as founder emeritus without any official executive or operational title.
The image below, we just updated, illustrates the trajectory of Veritas (Software and Technologies) but above all it is a product journey.
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The Enterprise Backup and Recovery segment has evolved a lot for a few years, we saw what we called next generation players landing on the jungle a few years ago like Cohesity, Rubrik, HYCU or even Own Data (acquired recently by Salesforce) addressing new data protection challenges with cloud, containers and SaaS applications beyond bare metal or VMs and previous waves. It's even more active recently with the security dimension and the AI tsunami in all domains. We can probably (re)name this category the Modern Data Protection category.
Scheduled to be unveiled next week, here is the preview of the new Coldago Research Map 2024 for Modern Data Protection and obviously it integrates the merge of Cohesity and Veritas NetBackup business unit to establish a clear leader in the domain in various dimensions.
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2025 will be interesting to watch in this domain as AI is everywhere and data protection, in all its dimensions, is a must.
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