Barracuda Networks, a longtime storage provider that used to be hardware first/software second, continues to evolve big time into the software-defined storage realm.
We know this because the Campbell, Calif.-based company bought U.K.-based information management specialist C2C a year ago and then revealed Sept. 29 that it is acquiring data backup and protection expert Intronis. As happened a year ago, Barracuda is keeping details of its latest transaction close to the vest by not divulging number of dollars paid.
The acquisition expands Barracuda's channel reach with the addition of Intronis's nearly 2,000 managed service providers and a purpose-built platform designed to streamline how MSPs service the data protection needs of their customers. The deal is expected to close by the end of the year, Barracuda said.
The addition of 12-year-old Intronis into the Barracuda camp is evidence of another storage and data management trend: specialized services for managed service providers, a huge sales channel that is growing both in number of users and in data center square footage, almost by the day.
Fast-Growing MSP Market
In the MSP world, the minute a new data center is completed, no matter where it is, floor space for IT colocations quickly sells out. Data centers cannot be built fast enough for the demand. Most of these services and data center spaces are going to small and medium-sized businesses, which make up 70 percent of the world's commerce.
Thus, obtaining Intronis is a key move for Barracuda because it is a recognized leader in providing data protection packages to MSPs, which turn around and manage them for their customers. This was a gap in Barracuda's overall products and services offering. Naturally, this also means a major change in Barracuda's market approach, which previously didn't rely much on the channel at all.
Chelmsford, Mass.-based Intronis' growth in the MSP market is driven by its well-known ECHO platform, which many of its MSP partners use as the foundation of their managed services business. Traditional value-added-resellers (VARs) have used it to accelerate their transitions into becoming managed service providers.
Closely integrated with the major Professional Services Automation (PSA) and Remote Monitoring and Management (RMM) providers, the Intronis ECHOplatform enables MSPs to deploy and manage data protection services for their own customers with comprehensive reporting, centralized account management, and consolidated billing, Barracuda Senior Director of Business and Corporate Development Andy Horwitz told eWEEK.
Businesses Want MSPs to Manage their IT
According to CompTIA's annual Managed Services Trends Survey, a growing number of users are looking to MSPs to procure, deploy, and manage their IT initiatives. Specifically, 72 percent of respondents to CompTIA's survey say they use an MSP for backup/disaster recovery initiatives while 68 percent rely on their MSP for their security initiatives. Those numbers are expected to continue to rise.
At the same time, a growing number of VAR partners are using the MSP model as a platform to better address the requirements of their customers. With the addition of Intronis, Barracuda will be better positioned to address these requirements with its simplified pricing, delivery and support platform that makes it easier for MSPs to manage their customers' network, security and data protection needs, Horwitz said.
At least for the time being, Intronis will retain its branded product line within Barracuda ownership, and its large white-label business will continue as is, Horwitz said.
Stock Hit Hard on Quarterly Report
Later in the day Sept. 29, Barracuda revealed its fiscal Q2 2015 financial results, which were weaker than Wall Street analysts had expected. The stock dropped a whopping 22.5 percent to $18.35 by 6:15 p.m. in after-hours trading after closing at $23.55.
Barracuda lost $2.2 million, or 4 cents a share, as opposed to a gain of 1 cent a share a year ago, based on a basic share count of 53.3 million. Revenue was up 14 percent from a year ago at $78.4 million. Net income was $5.6 million, or 10 cents per share.
Like EMC, Oracle and other U.S. IT companies, Barracuda cited the unfavorable currency environment and strong U.S dollar for its earnings miss.