Symantec Acquires Online Storage Company, Swapdrive
Symantec has made another move in the managed storage market, acquiring Swapdrive. The deal pushes Symantec deeper into online storage, where the company already offers the Symantec Protection Network (SPN).
While SPN is a software as a service (SaaS) option for VARs and MSPs, Swapdrive targets consumers.
Symantec-Swapdrive is the fifth deal added this month to our MSPmentor M&A Tracker, which charts MSP- and SaaS-oriented mergers, acquisitions and investments. Here’s a bit more about Swapdrive.
News of the Symantec-Swapdrive deal first appeared on TechCrunch. Now, Swapdrive’s corporate website (and its sister site, Backup.com) are updated to reflect Symantec’s ownership.
TechCrunch claims Symantec paid 10X profits and 5.6X revenues to acquire Swapdrive — a far higher premium than most traditional MSPs expect to fetch. The Swapdrive buyout, apparently, is a consumer play rather than a corporate or SMB-focused move, according to a Symantec statement to TechCrunch.
Either way, the online storage market continues to both grow (in size) and consolidate (through acquisitions).
Has Symantec said anything about SPN since launching the protection network??? I haven’t heard a thing and wonder how the service is performing.
While I tend not to believe they have $13 million in profit, the amount of revenue is already very impressive. This makes a lot of other small companies feel shy. In this business, most companies are money-losing: just think about some companies offering 2GB to 50GB free storage, or charging only $50/year for unlimited storage… while the storage price is going down, operating a backup service is not the same as using some raw cheap hard disks. We are not sure how the free / cheap service providers can survive without a buyout by some big old industry giant. From that point of view, SwapDrive has been doing really great in business.
DriveHQ.com is another independently-operated major Online Storage and Online Backup service provider.
Like SwapDrive, DriveHQ has Online Storage and Sharing service based on the DriveHQ.com website, FTP and DriveHQ FileManager client software; and we also have business-class Online Backup service using DriveHQ Online Backup enterprise edition.
Unlike many other companies, DriveHQ is not funded by VCs. We have spent many years developing top-notch products and technologies. We make money by offering top-quality products and services to our customers and creating value for them. We offer customized services to small and big companies. Our service has powered from big telecom service providers to small accounting firms, etc. While we look forward to having some good luck, our business focus has always been to create value for our customers and stay profitable. At end of the day, we believe if online storage and online backup is really important for customers, they will pay for it at a good price.
John
http://www.drivehq.com
John: Congrats on your self-funded success in the online storage and SaaS space. MSPmentor and its parent (Nine Lives Media Inc.) also are self-funded, and so far we’re enjoying the management and creative freedom we’ve earned. I suspect the same is true for you.
These must be interesting times for DriveHQ: You’re in a hot market, building something you love … so do you hold and hold and build and build … or sit down to negotiate if somebody comes to your door?
Regardless, stick with your belief that customers will pay for quality. The will.
Best, -jp
Thank you Joe. I think we are open on any possible opportunities, but our business focus has always been to create value for our customers and stay profitable.
John: Thousands of companies struggle to define a mission statement and clear goals. Congrats on stating your mission/goals so clearly, and staying true to them.
I was not shocked by this deal as Symantec have been trying got get a 1Gb to 1TB offering sorted for a while in the online backup space – but I am pleasantly surprised at the deal multiples.
We are also a completely self funded backup provider. It is always flattering when we are approached either by trade or financial buyers but we have steadfastly refused to even pick up the phone for an initial chat. We all love what we do and cant imagine life “post deal”
I believe deals like the Swapdrive/backup.com one further enhance the message we have been pushing for many years – it is possible to use a low end free or budget online backup service – but if you want Enterprise class managed backup then that comes at a price – and what you get in return if you choose your provider wisely is great service. We have always aimed to become the outsourced backup administrator with all the responsibilities that entails – not just a data storage pool.
I have been in online backup since 2001 over here in the UK, and have spent 7 years thinking it is a hot market – so I am glad you agree Joe !!
Simon
http://www.backup-technology.co.uk
Simon: Always good to have your perspectives on this site. I fully agree: You get what you pay for with online backup services. Free = risk. Enterprise-class backup is a completely different, and far more sophisticated ball game.
Couldn’t agree more with some of the comments here.
The online backup market has the mass market commodity services on one end and more serious business solutions, at the other. Typically, I’d assume anyone backing up their servers, databases, etc would be looking at a more ‘serious’ solution, anyway. I guess, the desktop/laptop end is where there’s the possibility of a user perceiving a commodity service as a viable business solution – and where an online backup service provider is more hard pressed to articulate the value edition he’s bringing.
We hear this every once in a while. Our software, Vembu StoreGrid, powers the online backup services of over 750 backup service providers – most of whom are regional players selling into their existing ‘managed services’ customer base – (most of) who appreciate the tangible value add they bring. In fact some of their rates are far far higher than the ones discussed here. Of course, they don’t manage to rope in the part of their customer base thats looking at a ‘free DIY service’ – to that extent, its a question of focusing, I guess.
After all, as someone said above, its not just about tossing in a few cheap disks into the ring, and you don’t want to focus your efforts on someone who believes thats all there is to an online backup service!
Lux
http://www.vembu.com
Lux: Good to hear from you. To clarify for our readers: MSPs deploy Vembu’s storage platform in their own data centers — rather than reselling a service Vembu hosts on its own, correct?
I just wanted to clarify that for our readers.
Best,
-jp
Absolutely, Joe.
We’re focused on the software; MSPs deploy our software (at the server end) in their own datacenter or co-lo and of course, on their client installations. So, yes, you’re right in saying that we do not ‘host’ on our own.
On the anvil, though, is Amazon EC2 amp; S3 support – starting off with replication to Amazon S3. In effect, a service provider can be up and running with his own online backup service – with no direct infrastructure investment. More on this soon…
Cheers
Lux