Commvault Acquires Hedvig For $225M, What Should We Expect?

Yesterday Commvault, a data protection / data management company, publicly announced that they have acquired software-defined-storage startup Hedvig for $225M.

This is a great exit for Hedvig, its founder Avinash Lakshman (the man behind Cassandra, and co-inventor of DynamoDB), and the company investors. Hedvig was funded up to $52M in three funding rounds, to give some financial context with the acquisition price.

Commvault’s CEO Sanjay Mirchandani also announced the news on Commvault’s website:

Beyond the understandable excitement of both CEO’s, what is this acquisition about? What is Hedvig’s core business, and what does the acquisition means for Commvault?

Hedvig – A Software-Defined-Storage Startup

If you haven’t heard about Hedvig before, they have built a software-defined storage platform (“Universal Data Plane”) which provides block, file and object storage support across private and public clouds, and massively scales up to thousands of nodes.

The solution is hardware agnostic and supports bare metal deployments, containers and hypervisors. As it can be expected of these solutions, Hedvig has its own set of APIs.

Hedvig states their solution offers advanced data services to their customers such as thin provisioning, a proprietary encryption technology for encryption (in-use, in-flight and at-rest), client and server-side flash/SSD caching, zero-impact volume snapshots & clones, deduplication & compression as well as storage virtualization.

The solution was built with extensibility in mind and supports multi-site replication, public cloud integration, active-active stretched clusters, and has a set of interesting policies to handle failure domains.

It has been a while since TECHunplugged had a refresh about Hedvig’s product, but Max had written about them on a couple occasions, bearing in mind the content is from 2016 and has likely evolved [Link 1] [Link2].

What does it means for Commvault and Hedvig?

It is unclear yet what is Commvault’s strategy with the Hedvig acquisition, but we can speculate about the direction. We believe that the briefing was intentionally vague to build up momentum ahead of Commvault GO (taking place 14-16 Oct-19 in Denver), where Commvault and Sanjay will tell us more about the plans.

Technology Refresh

Undoubtedly, the first aspect is the acquisition of a solid technological platform for storage which should help Commvault expand beyond backup use cases.

Commvault already have a product called HyperScale, but Commvault’s CEO Sanjay Mirchandani clearly stated in a Bloomberg interview that they are looking at actively rebuilding their competitivity by adopting newer technology and baking it into their products.

The challenges that customers face is data being scattered across tiers, being managed across silos, and ultimately a lack of end-to-end visibility of the data, with all the inefficiencies this implies. Commvault wants to bring this to an end, but will have to count with its competitors.

Keeping Up With Data Management Heavyweights

With a 27% share value drop to date, Commvault needs to catch up with the competition, particularly with companies such as Cohesity and Rubrik that are establishing themselves as leaders in the data management market.

finviz dynamic chart for  CVLT

It’s clear that the acquisition is not intended for cosmetic reasons. It is deemed that the Hedvig purchase will help Commvault overcome the potential HyperScale storage platform limitations.

Hedvig has been around since 2013 and already has a technologically mature platform. Commvault is facing increasing market pressure and has limited time and resources to throw into developing or improving the HyperScale platform.

It is a much more effective strategy to purchase an SDS startup such as Hedvig, get all the people onboard, and start building all of the necessary integrations with Commvault’s data protection solutions & package this into an appliance, in the style of Cohesity & the likes.

Beyond Data Management?

Commvault has historically been known as a data protection company. I haven’t been following too closely Commvault’s data management story, but for sure once the boundaries move from a smaller data protection scope to a larger data management scope, storage capabilities become critical.

Hedvig have proven they have a technically valid & scalable solution that integrates with public clouds, supports multi-site replication topologies, and have a very decent amount of advanced data services including encryption & data reduction. These are all key technologies for a data management platform.

It remains to be seen what the direction is, since Hedvig is a storage company at heart. Does this means that Commvault may encroach the territory of some of its partners, by proposing a platform that encompasses primary and secondary data?

Will it be an unified platform with transparent data movements between the primary and secondary tiers? One could fantasize about what’s next. The critical point is understanding Commvault’s strategy and their ability to execute fast.

TECHunplugged’s Opinion

While it’s too early to make any sort of assumptions about the final outlook, it’s good to see Commvault’s will to fight back and make efforts into building a modern data management offering.

In a lucrative but increasingly crowded market, claiming to be a data management company isn’t enough. Jaded customers have seen backup companies transform into data protection companies, and now again into data management companies.

This acquisition gives Commvault a unique opportunity to reorient its strategy, to demonstrate it is committed to innovation and to back claims with actions. Everybody loves successful and innovative companies, and that’s what we wish to Commvault.

Commvault GO will be the time and place where the industry will know if it’s make or break for Commvault’s ambitions in the data management market.