A big acquisition in data protection is reverberating across the tech ecosystems of storage and backup—including in Boston.
Dell (NASDAQ: [[ticker:DELL]]) said on Friday that it has acquired AppAssure Software, a data and application protection company based in Reston, VA, for an undisclosed sum. AppAssure opened a Boston-area office late last year and is backed by local VC firm Bain Capital Ventures.
This is a big deal for “big data”—the buzzword that encapsulates the increasing amounts of digital information being stored by businesses and analyzed for profit. For Dell, the move is an effort to provide data backup and recovery for businesses. The deal is the computer giant’s first software acquisition since it announced its new software group earlier this month.
AppAssure started in 2006 and has grown to 230-plus employees, led by founder and CEO Najaf Husain. The company’s software helps businesses back up their applications together with their data, testing for problems like corrupted data and incompatible IT systems to better ensure recovery. The technology is complementary to that of Boston-area companies like Carbonite, Backupify, and Actifio, and competes more with offerings from big companies like EMC (including Data Domain) and Symantec.
From an investor perspective, the acquisition yielded better than an 11-fold return for Bain Capital Ventures, according to managing director Ben Nye, who led the firm’s investment. BCV put in $6 million back in 2008. Interestingly, two other companies backed by Nye were previously acquired by EMC—Archer Technologies and Network Intelligence (both deals in the ballpark of $200 million)—and he also backed DynaTrace, which was bought by Compuware for $256 million last summer.
AppAssure has about a half-dozen staff in Boston, mostly in sales and marketing (including chief marketing officer Zorian Rotenberg). It sounds like Dell plans to keep everyone in place for now.
As for the deal’s impact on the storage industry and local data companies’ strategy, Nye says historically the field of data backup has been about “taking data and locking it away forever.” But a sizable fraction of attempted recoveries fail because of technical problems—problems that data storage companies are now trying like mad to solve.
“You can’t own storage if you don’t own backup,” Nye says. “The amount of data that we’re all storing has just proliferated. The importance of being able to back that data up, to move that data, to store that data, will grow. We are in the early innings of the big data information age. For companies, your data is your business.”
