Cohesity, Veritas and More on Changes in the CyberSecurity Market – Infrastructure Matters, Episode 30

Disclosure: The Futurum Group is a research and advisory firm that engages or has engaged in research, analysis, and advisory services with many technology companies, including those mentioned in this webcast. The author does not hold any equity positions with any company mentioned in this webcast.

Analysis and opinions expressed herein are specific to the analyst individually and data and other information that might have been provided for validation, not those of The Futurum Group as a whole.

Transcript:

Camberley Bates: Well, good morning everyone, and welcome to Infrastructure Matters. It’s another Friday, and I have got my dear host in crime, Krista Macomber, here. Welcome.

Krista Macomber: Hi, Camberley. How are you today?

Camberley Bates: I’m good. And Steve is not joining us because he is down for the count again. So those people that are suffering from colds and all those buggy boos, we appreciate it. So it’s a hard one this year. Anyway.

Krista Macomber: Amazing. We’re all virtual and yet I feel like we’re still passing stuff around somehow. I don’t know how it worked, but…

Camberley Bates: It’s DARPA. It’s DARPA sending germs. I know, Krista. They figured out how to pass germs through all their listening stuff.

Krista Macomber: Sure.

Camberley Bates: Anyway, so today we’ve got several items to cover. I think we’re going to basically focus a lot in cybersecurity. And there was a big announcement yesterday, that went out yesterday morning. It seems like that was two days ago, but it was yesterday. And that is the Cohesity and Veritas asset acquisition, not a merger. This is a… Why don’t you explain what’s going on?

Krista Macomber: Yeah, it was definitely an interesting piece of news, I think, for the whole industry to wake up to yesterday, obviously both Cohesity and Veritas being two very prominent names in the data protection space. And I would say as well, when we start to think about the broader cyber resiliency space, I might be a little biased just because of the amount of time that I spend looking at that market. But needless to say, they are definitely two of the heavy hitters. And so what we saw is that Cohesity has entered into agreement to acquire the NetBackup software, the NetBackup appliance, those are the hardware-based appliance offerings, as well as the Alta cloud-native SaaS data protection set of services from Veritas. It’s going to be interesting to see, I would say, how these different pieces are layered together.

There are some details which we can link to available on Cohesity’s site, some early details regarding some of the product vision as well as really the implications for the market. And Camberley, I know you and I have a piece that we’re finishing up today that we’ll post that we’ll link to as well sharing some of our findings. But yeah, so it’s essentially going to create one larger company together from a data protection standpoint that I would say not only has some very broad, what we call workload coverage, those are the actual sources that are being protected, but also that combined has very impressive reach in scale within large enterprise. And so that’s I would say from an install-based perspective, it’s in terms of the selling resources that are going to be able to be devoted as well as when we think about the ecosystem of channel partners and technology partners. So it’s, again, definitely a very big move.

Camberley Bates: Yeah, there’s a couple big points and there’s an excellent video done by Sanjay Poonen who is the CEO there that I felt like was if you want to watch another video other than us lovely ladies, that would be the one to do. But a couple really big things here that I observe. Companies such like a Rubrik or a Cohesity or any of your newer-ish, anyway Cohesity’s been around for 10 years so that’s not exactly new, but the newer-ish guys take a long time to mature to the point that they can support everything in the enterprise. And that causes issues when they’re selling into those enterprises.

So for instance, if I am looking at what they call in sales sweep the floor where they take over everything on data protection, you got to be able to support some things that people may not support. They still have things like AS400s in there and IBM is still selling those boxes, so they still need to support those. And then there’s databases, some of these corner case databases. Not MongoDB, but some of the older databases that still exist, and they have to be supported. So for that reason, what we do see often is that maybe a Cohesity goes box goes in, but yet you still see some of the other technologies staying to support those areas that have to be protected. So that’s one big area for them.

Krista Macomber: Absolutely. And I would say in the data protection world, we don’t usually see sweep the floor.

Camberley Bates: No.

Krista Macomber: It’s primarily for this reason that we do see multiple solutions are coexisting together. And NetBackup certainly has again that really solid, not only traction, but that really solid reputation. And I think what Veritas has done with the product I referenced, the Alta offering, this is completely cloud-native, it’s delivered as a service. So for a company that is considered more legacy to have seen how Veritas has adapted and evolved, that has been really impressive.

And so I think being folded in under the Cohesity umbrella, I do think together the companies are going to be positioned really strongly. And we did see that some of the other Cohesity services, including Turing which is their AI offering, DataHawk which is a lot of their security capabilities bundled together, those Cohesity set are all going to work on top of the joint offering. So even beyond data protection, I think there’s going to be a lot of added value for what will be this new joint customer base there.

Camberley Bates: Yep. And then the second big item that I saw was the global reach. We’ve been in the industry for a very long time. They have a very strong global reach. They’ve got a very strong channel partnership that covers the world, and that footprint then enables them to open the door into those markets. They’ve gone into them but they’re probably not as present definitely as maybe a Veritas has been in those spaces. So that’s a huge kick up for them.

Krista Macomber: Absolutely. And just building on that a little bit, I referenced the Alta SaaS solution from Veritas, and we’re certainly seeing there continues to be growing demand for that kind of either managed or SaaS delivery for technology in general, but we’re also seeing that in data protection. And so that’s where I think that channel play can become even more important, because that’s another way for the combined company to get at some of that delivery without…

If there are customers that don’t necessarily want that first party offering, but they would still want to work with that channel partner. And I think the technology partner ecosystem as well, especially as we do see that need for cyber resiliency, technology partners coming in and providing adjacent capabilities that are really going to run out that stack together. It’ll be something that I know I’ll be watching for as well.

Camberley Bates: Let’s talk about what stayed, because this was not a merger, this is not a stock merger here. They’re both private companies. One’s VC-supported, Cohesity, and the other one is a private equity by Carlyle. So what’s staying is one of my old favorite. Okay, so it’s clear to say, I used to work for Veritas a long, long time ago, but Backup Exec was my favorite at the time.”

Krista Macomber: Yeah.

Camberley Bates: Actually staying, it just keeps on having a life of its own. And the other ones that are staying over there are having to do-

Krista Macomber: InfoSight. Yes, I know. InfoSight is staying as well. And basically, it’s really it’s the rest of the Veritas portfolio. So again, InfoScale and some of the data insight end of things for Veritas. So I think the new company is going to be called DataCorp. I saw that. And so it’s just going to be, I think as you mentioned, Camberley, the Backup Exec is going to stay. So that’s data protection, but it’s more I would say for maybe the mid-market versus that larger enterprise play.

Camberley Bates: Just play the really SMB market.

Krista Macomber: Yeah, that’s fair. That is fair.

Camberley Bates: Although there are very large companies have used Backup Exec because they didn’t want to pay the price of the NetBackup. I’m not sure if that’s still true, but I know way, way back when Bank of America was one of the largest customers we had on Backup Exec. There you go.

Krista Macomber: No, and that’s great color. And I know we’re still early in 2024, but I know last year, Camberley, we had maybe a call or two with the Backup Exec team. And I think that still resonates to be true. As you mentioned, Veritas, those assets are still going to remain. So it’ll be interesting to see where the new organization, if you will, takes that. But I think the more that the company can be focused on some of these particular areas, I think could potentially have some benefit in terms of continuing to invest in that innovation and also sharpening that sales focus as well.

Camberley Bates: And so the other items are saying the compliance items, those emails, email archiving capabilities that they have. So it’ll be interesting to see how Veritas comes out with their new strategy and messaging with this change and where they’re going versus where the other folks are going. So more to see, more to come, and it’s always a dynamic. And some of our friends that actually had worked for Cohesity had moved over to Veritas and now they’re, “Whoops. What?” Hey, Chris. Chris Byborg, got your new job back, got the same email probably. There you go.

Krista Macomber: Right. And easy transition back, hopefully. Right?

Camberley Bates: You got it.

Krista Macomber: Gosh.

Camberley Bates: Okay, so let’s go on the next one. You sat through a session on cybersecurity policy. And since we’re talking data protection and all that stuff, why don’t you run through that a bit?

Krista Macomber: Yeah. So this was through an organization called MarketScale. It was a live session. It was me and three other panelists yesterday afternoon for about an hour. We will make sure to link to that recording here as well for those who are interested. But it was interesting, I think for me because Camberley, as you know, we tend to work closely with vendors and also very closely with IT operations teams and things like that. But this conversation was a little bit higher level, almost a good opportunity to take a step back and think about things like our standards. So governing bodies, or not necessarily fully governing bodies but organizations like NISS that are trying to develop some of these standards that government organizations and some of these high profile large corporations are looking to follow.

So a lot of the conversation that we had was not only, okay, how is the threat landscape evolving for these organizations, but also where are we at in terms of really making sure that the key vulnerabilities are being shored up? What are some of the areas where we maybe are lacking in terms of standards? I know one thing that we talked about is that there really is no standard right now across industries. And so we talked a little bit about some of the challenges with that and also why that is. So it’s again, from that standpoint, it was just I think a really interesting conversation because we tend to get very focused on the technology developments and things like that.

And I think sometimes that’s maybe even a little step ahead of where customers are at and the market is at. And with cybersecurity in general, the policies just increasingly I would say are going to play a more and more important role because as attacks are becoming more prominent, it’s no longer sufficient to just do our best. It’s okay. We’re increasingly having to prove that we’re complying with some of these regulations. So it was a lot that we talked about, but that was the general gist of the conversation.

Camberley Bates: Well, and that is a super good segue because we announced yesterday Shira Rubinoff joined us. Now, you may not Shira, S-H-I-R-A, Rubinoff, R-U-B-I-N-O-F-F, and we’ll put her information there. So she has joined us. She is quite the luminary in the cybersecurity space and she does do quite a bit with CISOs, et cetera. And so we spent some time with her yesterday because we’re starting to figure out, okay, so us working together. But the real thing that her background, interesting enough, is more on the sociological and the psychological side of this cybersecurity stuff, which is exactly what you’re getting into. It’s so much of what we’re dealing with. And I think we know that the biggest threat that we have is the phishing, and it’s the clicking and the constant fighting of that stuff. And they’ve gotten so good. You have to look at these things really hard to say, “Is this real or not?” And even I have a buddy that’s in the cybersecurity industry, in the industry, and he called something that he should never have called, and it’s like…

Krista Macomber: It happens to the best of us.

Camberley Bates: It’s like you got succumbed into this. So anyway, so she’s joining us and I’m sure one of the days we are going to have her. She’s a lovely lady. And we’ll put another link. You’re going to have so many links we’re going to occupy you all day. You’ll have to prioritize what’s more important. So anyway, and her group underneath, you’re going to see it coming under the brand of Cybersphere because she’s doing quite a bit of podcasts and TV and that kind of thing and into the market. So we’ll have her join us on Infrastructure Matters one time, but she’s really mattering is what’s going on that other level, stuff that’s happening.

Krista Macomber: Absolutely, definitely looking forward to it. And I think there’s a big just psychological and people and process thing issue that’s going on in cybersecurity. And that was part of what we touched on a little bit in the conversation yesterday is there’s definitely I think a degree of whose responsibility are these things in how are IT operations and security teams working together and things of that nature. And it’s like you mentioned Camberley, we’re very excited to have Shira join us because I think there’s a lot we’ll all be able to do together to cover some of those joint issues there.

Camberley Bates: Right. We’ll then switch over a little bit to a couple of announcements that came down this week. Hitachi, Cisco had a big announcement on their relationship. Now, they’ve had a relationship for a long time. They’ve had converged systems that they have brought out to the market so this is not totally new, but it’s what they’re trying to do is bring more as a service and managed service models to the market. Hitachi’s had their EverFlex consumption model which is where you can pay for use for the systems, that classic elastic consumption that you have with folks like GreenLake and APEX, et cetera. So now this is going to and taking the systems that they have, their converged systems that is Cisco servers. It will be Cisco’s networking combined with Hitachi’s very strong play storage systems, integrating them together and bringing out Hitachi Infrastructure Orchestration as a Service. That is not easy to say. Put it out in front of me because otherwise I knew I was going to screw that one up. And those services that are coming out, it’s a managed service.

They’re also bringing out Intersight with this, which is the Cisco Intersight which is their observability model for some of the cloud management capability or cloud-like management capability. That’s seeing them start. I think we’re going to see this coming. They’re going to be on in a good cadence now onto the infrastructure since they’re doing, have done some reorganization, et cetera. And especially as we come to the end of their fiscal year, which ends at the end of this quarter, that’s usually when they have a lot of their big announcements that are coming out. So that is one of the big announcements. And the other area that I spent some time with today this week is a company called Infleqtion with a Q instead of a C. And this takes us into a totally different area which is quantum computing. And I am certainly not a quantum computing expert, but what they’re bringing out, they did a big update. They’ve done some updates. They announced some areas. But the thing that I found really interesting with them is asked the question of their CEO, “Where is the business value?” CEO is Scott Harris. “Where is this going? What real business problem are we addressing?” And they bring out some products that are doing more in precision time protocols.

That system is called Tiqker and also the SqyWire offering. And it’s like, “Okay, so to the average person that’s not really understandable, why is that going to benefit me as the average person?” Well, what it is is that are very, very reliant on these GPS satellites for time. And as big and as digital as this entire world is, as you can imagine, we’ve got cars, you’ve got all this IoT connected, et cetera, we need more and more refined time distribution on this earth and also in international space, which is they’re also in the International Space Station. So what this is doing is giving more frequent access to time, which starts boggling your mind. I’m trying to make this really super simple. And then also what they’re doing is within the broadband communication spectrum, being able to divide that up a bit more until it can be scaled and more robust and more cost-effective in the long haul. So this is what quantum is doing and what they’re doing with these devices. They’re literally coming out with a… Their clock Tiqker is a, I think it’s a 3U or something like that, size systems. And what they will bring out is something is about the size of pack of cigarettes.

Krista Macomber: Wow.

Camberley Bates: You’ve got more distribution of this all over the place. So it is an interesting place. This is my first time getting into them so there was an awful lot to consume with the discussion. I’m looking forward to hearing more from them because they’re really working on that long range, how do we make this stuff really applicable to address some really big everyday items. That frankly I can’t understand.

Krista Macomber: That’s just wild when you think about that level of precision. It’s absolutely mind-boggling.

Camberley Bates: And they’re not a small company. They’re involved with all the big, many, many very large supercomputer environments, quantum computing. I believe they’re in Oxford. They’re working with Japan on their moonshot pieces of it. So I’m looking forward to hearing more from them and seeing where they’re going. And that’s what I’ve got with that. Anything else we got here?

Krista Macomber: No, no. I think I’ve been digging out from being sick as well myself this week, but we’re all hopefully getting on the right trajectory. But yeah, I think those were the big things that I’ve been covering this week.

Camberley Bates: Okay, cool. Well, hopefully our buddy in crime, Steve, will be back next week and out of the sick lane. So we will see you there. And with that, we will wrap up. Thank you very much, guys, for joining us and don’t forget to follow us. Thanks.

Krista Macomber: Thank you

Other Insights from The Futurum Group:

Experts Talk: Can National Cybersecurity Shore Up its Defenses?

Cohesity Acquires Veritas Data Protection Assets – The Futurum Group

Early Access for Cohesity Turing Integration with Amazon Bedrock – The Futurum Group