The data protection market is reforming: Hedvig is Commvault’s stake in the ground

The data protection market is reforming: Hedvig is Commvault’s stake in the ground 1

The world of data protection — once considered a static and back-office service — is changing considerably. There’s been a lot of momentum in this marketplace over the past few years, especially with new approaches and models that serve enterprise requirements. Multiple business imperatives have affected this industry, including business leaders who expect I&O pros to help firms recover from a ransomware attack and I&O pros who want to consolidate experiences that impact their purchase decisions. Vendors such as Cohesity and Rubrik have addressed that market with an integrated, well-functioning appliance-based offering. Commvault made a similar attempt with an appliance-based solution launched nearly two years ago. This offering garnered some traction, but it required some fundamental capabilities, such as having a scale-out storage foundation. 

The gap needed plugging. Yesterday, Commvault announced its plan to acquire Hedvig in a $225 million deal. Commvault’s stake in the ground in the appliances market is rooted in Hedvig’s native capability — software-defined scale-out storage. Forrester expects Commvault to integrate Hedvig’s business and offering by: 

  • Integrating the Hedvig SDS as the underlying platform for its appliance offering. Commvault’s solution will integrate with Hedvig’s to deliver underlying foundational scale-out software-defined storage capability. That brings Commvault one step closer to delivering a true appliance experience. 
  • Focusing on increasing topline. Commvault’s new-age competitors have a significant portion of bookings coming from their hardware. Hardware bookings and revenue can be three to seven times their software revenue. It can also drive repeat revenue from clients as the data volume continues to grow. That means Commvault has a lot of upside/potential to improve its topline. To be clear, though, since Commvault isn’t in the hardware business, much of the hardware revenue hitting its books will be a pass-through to its hardware suppliers, such as Cisco, Hewlett Packard Enterprise (HPE), and Supermicro. 
  • Attempting to shift the revenue balance toward net-new sales. In the software industry, it’s imperative for vendors to continue to innovate to keep net-new sales coming in. It’s easy to fall into the trap of living on support revenue — such companies see an immediate decline in revenues. It takes courage to bring companies out of that downward spiral. In the past few years, Commvault has seen the balance shifting toward support and services revenue. Its Hedvig acquisition will prove to be one such major positive step for Commvault. 
  • Leveraging the common partner ecosystem. A quick look at the key systems partners for both companies shows they have many partners in common. This eases the selling motion as well as partner relations and makes company integration less strenuous. It’s a positive sign for all vendors in the ecosystem. 

Enterprises will see an improved solution from Commvault. But note that scale-out storage isn’t a panacea in this fast-changing enterprise IT environment. Commvault needs to innovate on a few more areas within its solution to deliver a modern, robust solution and continue to serve new enterprise use cases as strongly as it has. 

This post was written by Senior Analyst Naveen Chhabra, and originally appeared here. 

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