We had the pleasure to watch Zerto present at Cloud Field Day 11, a presentation that might well be their last one as an independent company, as HPE announced a few days later their intent to acquire Zerto (more on this later).
Zerto’s Value Proposition
Founded in 2009, Zerto has been active for several years in the field of data protection. Although they never exactly achieved mainstream status, they have rightfully earned a reputation of reliability and a position of specialized data protection solutions provider.
So what puts Zerto aside? The biggest strength of their solution lies in their excellent continuous data protection architecture which is based on journaling, i.e. a logbook or “journal” that keeps track of every I/O operation and replicates delta changes to the target location continuously. These replication capabilities are the foundation not only to backups, but most importantly to excellent disaster recovery capabilities which enable organizations to meet stringent RPO and RTO requirements in a cost-effective manner.
The solution includes DR orchestration functions, automated failover / failback and non-disruptive DR plan testing, with the ability to generate reports. Zerto supports cloud-based long term retention as well as S3-compatible immutable snapshots to mitigate ransomware attacks. And of course it can be used as an enabler for data mobility use cases.
At Cloud Field Day 11, Zerto also showcased Zerto In-Cloud, a solution that supports AWS EC2 workloads and makes cross-AZ / cross-region data protection possible. We recommend you watch the dedicated CFD11 session about ZIC below.
Finally, Zerto also deliver SaaS data protection capabilities through a partnership with Keepit. This expands Zerto’s data protection portfolio to support SaaS applications such as Salesforce, Microsoft 365, Microsoft Dynamics 365 and Google Workspace.
The HPE Acquisition
After this brief review, we have to say we were genuinely surprised by the HPE announcement which came approximately a week after Cloud Field Day 11, although there are no doubts that the acquisition makes sense at least for HPE.
Getting back on the acquisition itself, the transaction is valued at $374 million USD, an acceptable but quite modest valuation if you compare it with the “unicorns” startups in the data protection market such as Cohesity or Rubrik. Still, the purchase is a net positive for Zerto investors and relatively comfortable exit, as the company had raised around $183 million USD according to Crunchbase.
From HPE, the intent is very clear, as the company lacked any serious data protection / data management capabilities in their portfolio (reminder: data management is a convenient way across the industry to talk about data protection and emerging / future capabilities, upselling a product/solution on potential future value. Some are there, many are not).
The HPE press release clearly talks about making Zerto available as-a-service through HPE GreenLake and Data Services Cloud Console, but the announcement doesn’t makes any reference to existing customers, although it is probable that there will be no change in the near future to the current deployment and sales models.
Zerto is an excellent data protection solution and one we’ve had the pleasure to cover in the GigaOm Radar for Hybrid Cloud Data Protection for Small and Medium-Sized Business as well as the Enterprise counterpart Radar, two reports to which TECHunplugged contributed.
At the announcement time, the core solution capabilities were very solid and Zerto had a compelling set of features as well as a promising roadmap ahead. The HPE acquisition may hopefully accelerate the execution on the roadmap, however the planned integration in the HPE solutions portfolio and delivery through GreenLake raises legitimate concerns about Zerto’s partner ecosystem future.
HPE is aggressively positioning GreenLake as their one-stop-shop for infrastructure needs, and it remains unclear whether current / potential customers will have a chance to deploy Zerto as an independent data protection offering without being locked into the HPE ecosystem in the future.
Nevertheless, Zerto has proved to be a trustworthy data protection partner for many organizations, with a clear differentiation and great execution capabilities. We hope them the very best outcomes under their new green colors. And to see them very soon at a Field Day event to update us on their progress.