Datto Acquires Backupify, Adds SaaS-Focused Data Protection

Hybrid cloud backup and disaster recovery provider Datto Thursday said it has acquired Backupify, a developer of cloud-to-cloud data protection solutions for Software-as-a-Service applications.

With the acquisition, Datto will become a complete provider of data protection with technology combining Datto's traditional hybrid cloud-based backup and disaster recovery technologies with Backupify's SaaS application-based data protection, said Austin McChord, Datto founder and CEO.

Terms of the deal were not disclosed.

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The acquisition is the second this year of a SaaS application data protection vendor after EMC acquired cloud data protection developer Spanning.

Backupify brings Datto two key capabilities, McChord told CRN.

The first is product expertise in the SaaS market. "They are the leader here," he said. "Datto didn't really play in this space before. Now we can build a total data protection portfolio. It doesn't matter what the platform is, we can protect it."

The second is an entirely new base of customers and partners, McChord said. There is no overlap in terms of channel partners between the two, he said. "Backupify has been moving into upmarket opportunities that Datto didn't do before, and has services we don't currently have," he said.

Backupify focuses on protection data and applications from such SaaS providers as Google Apps and Salesforce, said Rob May, Backupify CEO. The company plans to add similar capabilities for Office 365 in the near future, May told CRN.

"While the cloud providers and SaaS providers do a good job of protecting their apps, they haven't focused on customers' infrastructure," May said.

About 30 percent of Backupify's business comes from indirect channels, which is up considerable over the 9 percent that came from the channel last year, May said.

"We had focused on direct because, when you are a startup in a new market, the selling process is more evangelical," he said. "You need to spend more time educating customers.

Furthermore, May said, when Backupify launched in 2010, there was not a good SaaS channel, and few channel partners were selling Google Apps or Office 365. "But channel partners are starting to push their customers toward the cloud, and are looking for solutions to round out the needs of their customers," he said. "So for us, it's a good move to be acquired by Datto."

NEXT: Datto, Backupify And The Channel

The acquisition is a chance for a former Backupify channel partner to re-evaluate its decision to stop working with the vendor.

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"Backupify's pricing was higher than competitive offerings, but its technology and service was very good," Gadell told CRN. "There's a lot of competition in this market. Backupify has a cool interface, but so do others like Spanning and Gaggle. All these new applications are slick, and designed for the Web."

The acquisition of Backupify by Datto means that GadellNet will be giving Backupify a second look, Gadell said.

"We've only been working with Datto for a few months with its BDR [backup and disaster recovery] device and replicating data to the cloud," he said. "If the Backupify pricing model becomes more attractive, I don't see any reason not to use the technology. Pricing was the only factor in our decision to leave the vendor. Backupify was easy to work with and was growing quickly."

May declined to discuss how the acquisition of Backupify by Datto might impact prices for his company's services. However, he did say that, by leveraging Datto's infrastructure, there were opportunities to better control costs and possibly pass some savings on to customers.

McChord said that Backupify was neither profitable nor cash-flow-positive due to a focus on growth. However, he said. Datto is a profitable company and projects continued profitability in 2015 after the acquisition of Backupify. "Datto will invest in Backupify to help it grow quickly going forward," he said.

PUBLISHED DEC. 11, 2014