CA's Arcserve Spinout: A New Channel-Focused Data Protection Vendor

CA Technologies is selling its Arcserve data protection software business to a private equity company in a move channel partners said could make Arcserve a more nimble and important part of the storage market.

CA's decision to sell Arcserve to Marlin Equity Partners will make Arcserve a standalone, private company for the first time since its predecessor, Cheyenne Software, was acquired in 1996 by what was then known as Computer Associates International.

CA declined to disclose terms of the deal, which is scheduled to close in late July or early August.

[Related: EMC Beefs Up Its Data Protection Portfolio For Software-Defined Storage Environments]

Mike Crest, senior vice president and general manager of CA's data management business and the CEO-in-waiting of Arcserve when the divestiture closes, said Arcserve under CA has flourished in the last 21 months, and in May unveiled the company's Unified Data Protection strategy, which combined backup, replication, high availability and global deduplication in a single console.

"UDP became the perfect storm opportunity to unlock the value of Arcserve while letting CA sharpen its own focus," Crest told CRN.

The separation of Arcserve from CA makes sense because, unlike CA, Arcserve is 100 percent channel focused with a business that includes a huge number of SMBs in its list of 43,000 accounts worldwide, Crest said. CA, on the other hand, is more focused on its mainframe and its large enterprise management business, he said.

"Marlin sees a tremendous opportunity to build on our business and to expand it through organic and inorganic growth in the future," he said.

Channel partners also see the value of making Arcserve an independent organization.

The split is great news, said Todd O’Bert, president and CEO of Productive, a Minneapolis-based solution provider and longtime Arcserve channel partner.

"I think that Arcserve as a company can now have more freedom to execute against what it wants to do than it could under CA," O'Bert told CRN. "It's been acting as an independent company for some time. CA and Arcserve are not really core to each others' businesses."

Arcserve appears to be moving on the same business plan CA presented about Arcserve at last November's CA World, O'Bert said.

"Arcserve is building out its portfolio of technology for data protection, only it will be more nimble and execute more quickly as a standalone company," he said. "Mike Crest has a great vision of where he wants to take Arcserve and has a great team. It's all systems go."

NEXT: Hoping CA's Arcserve Divestiture Succeeds Better Than Its eTrust Divestiture

Bryan Handing, principal at LightHouse Business Information Solutions, an Albuquerque, N.M.-based solution provider which has worked with Arcserve since it was known as Cheyenne Software, wrote in an emailed response to CRN that it is still unclear how good an idea it was for CA to divest itself of Arcserve based on past experience.

Handing cited the case of CA's eTrust anti-virus technology, which was spun off in 2011 as a separate company called Total Defense and eventually renamed iSheriff. "After it spun off from CA, it has dwindled to just a mediocre home product," Handing wrote.

That should not be the case with Arcserve, Handing wrote. "I believe that CA Arcserve has a much stronger product line and corporate structure (and) that they should be able to survive this change as long as they received the necessary support financially from the equity firm."

As a standalone company, Arcserve will start off with a very profitable operation, Crest said. However, he declined to discuss the organization's financial situation, citing a CA "blackout period."

"We think this is one of the coolest startups in storage today," he said. "Not many people can start with 43,000-plus customers and 7,250 active partners."

Once the deal is complete, CA will have no equity in Arcserve, Crest said.

Arcserve will be headquartered in the Minneapolis suburb of Eden Prairie.

"There's a lot of storage companies starting there," Crest said. "CA had a lot of shared services, finances, HR and IT there. And that's where my office is."

PUBLISHED JULY 9, 2014