HPE is acquiring IT resilience specialist Zerto for $374 million in cash, and so gaining in-house disaster recovery and general backup products, including cloud-native app protection.
Update: 4 July 2021. HPE will offer employment to all Zerto employees.
Zerto was founded in 2009, by CEO Ziv Kedem and CTO Oded Kedem. It has recorded total funding of $162 million VC financing across five rounds, plus a $20M debt finance facility. It claims more than 9000 customers, including more than 350 Managed Service Providers.
HPE President and CEO Antonio Neri said in a prepared quote: “Zerto’s market-leading cloud data management and protection software expands HPE GreenLake cloud data services, allowing customers to protect their data and rapidly act on insights, from edge to cloud.“
Ziv Kedem wrote in a blog: “We see this as a strategic development for the storage industry — and true recognition of the importance of our cloud data management and protection technology … This acquisition expands HPE GreenLake and accelerates HPE Storage’s transformation to a cloud-native software-defined data services business.”
That bears repeating: it accelerates HPE Storage’s transformation to a cloud-native software-defined data services business and, logically, away from a traditional external storage array hardware/software business.
Zerto had focused on disaster recovery, with its continuous data protection and journalling technology. It subsequently moved into general backup and protecting Kubernetes-orchestrated containerised applications, along with migrating them between clouds and on-premises.
Its software replicates and migrates data between vSphere and Hyper-V environments, and natively to Amazon Web Services and Azure. Its hybrid and multi-cloud mobility has support for VMware on public cloud with support for Azure VMware Solution (AVS), Google Cloud VMware Engine, and Oracle Cloud VMware Solution.
According to HPE, the data protection as-a-service market will grow from $7.7B in 2020 to $15.3B in 2024, representing a 19 per cent annual growth rate.
Zerto’s management team is joining HPE following the close of the transaction, expected in the fourth quarter of HPE’s fiscal year 2021. Altogether there are 500 Zerto employees, spread across the USA and Israel. Zerto will be organised under HPE Storage, reporting to HPE SVP and GM Tom Black. An HPE spokesperson said: “Currently we expect to make an employment offer to all Zerto employees. As part of the integration process, the HPE team will work with Zerto on the go-forward plan and structure.”
HPE said Zerto is expected to contribute more than $130 million of run-rate revenue at software gross margins, with approximately one-third of revenues incremental to HPE’s as-a-service annual recurring revenue. Zerto’s software helps customers recover in minutes from ransomware attacks and will soon be available as a service through HPE GreenLake, via the Data Services Cloud Console.
Zerto’s software should benefit from wider exposure to potential customers.
A blog by Black claims that, with Zerto, “we will be able to deliver the most robust disaster recovery as-a-service solution in the industry — for any storage device, any app, any cloud, and any recovery SLA. Zerto brings to HPE the fastest recovery objectives for always-on applications, ransomware protection from increasing cyber threats, and seamless hybrid cloud application and data mobility.”