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OpenText acquired cloud data protection vendor Carbonite Inc. for $1.42 billion Monday, in a move expected to expand the Toronto-based content management vendor's cloud business and security offerings.
OpenText's Carbonite acquisition is aimed at extending OpenText's cloud portfolio of enterprise information management (EIM) systems and building its footprint in the small and medium-sized business (SMB) and consumer markets, the vendor said. Carbonite's data protection and end-point security platforms will also strengthen OpenText's security products for loss prevention, digital forensics, and endpoint detection and response.
"Data protection and endpoint security are strategic industrial markets; they are relevant to all size customers, enterprise, SMB and prosumers (those who consume and produce a product), Mark Barrenechea, OpenText CEO and CTO, said in a conference call to investors.
"The total addressable market (TAM) for these end markets is over $15 billion and growing mid-to-high single digit. Cloud, security information protection and endpoint are all strategic EIM considerations we've included in these areas in our strategic TAM," he said.
OpenText Carbonite acquisition part of cloud push
Historically a vendor of mostly on-premises software, OpenText is amid a cloud transformation campaign.
The acquisition is "an expansion of OpenText's cloud portfolio," Gartner analyst Michael Woodbridge said. "It will be interesting to see how far they intend to integrate [Carbonite] into other services."
Existing Carbonite customers ought to be confident that OpenText will continue to support them because OpenText usually maintains support for acquired products in the long term, Woodbridge added.
The acquisition comes after the content management vendor last summer launched a major expansion of its partnership with Google to help OpenText customers move EIM systems projects to Google Cloud.
Also, last summer OpenText revealed that OpenText cloud editions of its on-premises applications, dubbed OpenText CE, would be available by April 2020 for the OpenText Cloud and the AWS and Microsoft Azure public clouds.
As one of the biggest independent content and enterprise information management vendors, OpenText also appears to have recognized with the acquisition that it needed to build up security features around data inside its systems.
That initiative started in 2017, when OpenText acquired Guidance Software.
"Connecting that other piece -- the backup and data protection -- might improve its reach or its appeal to its customers," Naveen Chhabra, a Forrester Research analyst, said of the Carbonite acquisition.
Mohamad Ali suddenly resigned as Carbonite CEO in July 2019, with chairman Steve Munford stepping in as interim CEO.
Founded in 2006, Boston-based Carbonite began as a vendor of online backup services for desktop PCs, and later evolved into a provider of SaaS data protection and data security services.
In March 2019, Carbonite moved aggressively into security with a $618.5 million acquisition of Webroot, a network and endpoint security vendor and provider of threat intelligence services and training.
Just over a year earlier, in February 2018, Carbonite bought cloud backup vendor Mozy, a former longtime competitor, for $145.8 million from Dell Technologies Inc.
Under the terms of the definitive acquisition agreement between the two publicly traded companies, OpenText agreed to buy all outstanding Carbonite shares for $23 per share in cash.
OpenText said it expected to close the transaction within 90 days.
OpenText's Carbonite acquisition appears to be focused on adding data classification, protection and recovery capabilities across OpenText's products, including guarding against ransomware, Woodbridge said.
News director Shaun Sutner and senior news writer Johnny Yu contributed to this story.