Arcserve CEO On Cohesity-Veritas, AI, ‘100 Percent Partner Model’

‘For partners, we have a 100 percent partner model now and plan to revamp some of the programs that have probably gotten a little bit dated. ... We’re really focusing on how we meet customers’ needs and interact with them through our partner channel. And so we’ll be making some changes later this year,’ says Arcserve CEO Chris Babel.

Arcserve was founded in 1983 as Cheyenne Software and for years was the primary alternative data protection technology developer to Veritas Software. Now, however, after Veritas was acquired by security software developer Symantec and then spun back out, Veritas’ enterprise business is on the way to being acquired by rival Cohesity.

Private equity-owned Arcserve, which in 2021 acquired rival StorageCraft, has changed with the times. While the company earlier this year canceled its own storage cloud to take advantage of the scale offered by larger cloud providers, it has continued to invest in technology to protect data whether on-premises, in the cloud and on the edge.

Chris Babel, who joined Eden Prairie, Minn.-based Arcserve as CEO in May 2024, recently told CRN in an exclusive meeting that the company remains focused on providing robust, efficient, cost-effective backup and recovery to companies globally.

The company has also made security a major part of its offering, including immutable backups and ransomware protection, Babel said.

“We’re helping customers solve a fundamental problem as data has become the most critical asset inside of a business: how you gather it, collect it, use it,” he said. “This is all critically important and the first thing that people think about. But equally important is how you make certain that you don’t lose it, and that it’s always there for business goals and to drive company success.”

Babel also discussed strategic priorities for Arcserve going forward and talked about how Cohesity’s planned acquisition of Veritas’ enterprise business will impact the industry as a whole and Arcserve in particular.

Here is more of what Babel had to say.

How do you define Arcserve?

Arcserve is focused on providing robust, efficient, cost-effective backup and recovery to companies globally. The focus of the last couple of years, as the world has evolved and ransomware has gone crazy, is to provide immutability as well as a robust set of ransomware offerings. We’re helping customers solve a fundamental problem as data has become the most critical asset inside of a business: how you gather it, collect it, use it. This is all critically important and the first thing that people think about. But equally important is how you make certain that you don’t lose it, and that it’s always there for business goals and to drive company success

Arcserve has been in the industry longer than just about anybody else, but the data protection space has become very competitive. How does Arcserve compete against newcomers and companies that are now much bigger than Arcserve?

The number of companies have exploded into this space, along with the explosion in market demand and threats. I think where we have found our focus is the midmarket, downward to the larger SMBs and upward a bit into the lower-end enterprise. And we provide them, in our belief, the best and most robust, easy-to-use solutions. You never want to say, ‘Set it and truly forget it’ because you need to test your backups, make certain they’re working, make certain you can restore, that type of thing. Our technology is easy to deploy, easy to get up and running, easy to configure, easy to make certain that you are protected. We are very much focused on flexibility. That’s the ability to do on-premises backups and cloud backups and make them immutable.

We also focus on pricing flexibility. We provide capacity-based licenses and perpetual licenses. We still do socket-based licensing. We can do volume-based licensing. And we can package it all up if needed in an appliance: simple, easy to use, lands in your door configured to go. So on-premises to cloud, which model suits you best, our focus has always been on providing flexibility.

The last piece of the puzzle is thinking through the total cost of ownership. Everyone wants to push to cloud, and we’re continuing to expand offerings to do that. But at certain sizes and scopes, that can get very, very expensive. And so we see people that have moved to the cloud who want to move back. We see people that have started on-premises and want to move more to the cloud. We see people using a 3-2-1-1 strategy [three copies of the data in two types of media, one off-site, and a copy for immutability] who want to make certain things are off-site. That flexibility is there. But what’s also there is a strong focus on the total cost to the customer, not just the up-front costs, but cloud storage costs over time and what sort of team and infrastructure you need in place to manage it all. It’s not just the starting price. It’s the full package of costs and expenses a company looks at to meet their needs.

You talked about the ability to work with a variety of different-size customers in the cloud and on-premises.

It’s not just one of these elements that I want to stress. We oftentimes see people pitch the idea of ‘take it, test it, try it.’ That’s where the ease-of-use piece might be important. Other times, when it comes to cost, a customer might think about the up-front price. And we may not always win on that. When we have a conversation, we’ll tell customers the overall costs over this type of lifetime with the key themes of flexibility, total cost of ownership, and ease of use to get it up running and manage on an ongoing basis. It’s a combination of those, depending on where the customer is in their maturity and what they’re looking to do, that causes the win.

One of the biggest industry changes today is Cohesity’s pending acquisition of Veritas’ enterprise business. How will it change the data protection industry, and how will it impact Arcserve?

Any time you see a market growing in size, complexity and needs, you’re going to see acquisitions, particularly when, candidly, PE firms are involved in a number of the different companies in the space. Private equity firms have time horizons for their [portfolios]. This certainly isn’t the first PE-backed acquisition, and it won’t be the last. I was at VeriSign and competing with Symantec when Symantec originally acquired Veritas and brought it in-house. So I think you’re going to see things like this continue.

I think both Cohesity and Veritas, for the most part, aim a bit higher in the enterprise than we typically do. We obviously pay attention to it. But I think what you’ll see with continued consolidation is people trying to get bigger footprints to attack the market top to bottom, from the smallest of the small to the biggest of the big, to tie in more tightly over time with security. Data protection and security are becoming more and more intertwined. I look back on Symantec’s Veritas acquisition. At the time, I think everyone scratched their heads, but I see more of that is likely to happen in the future. The time is better. The buyer universe is thinking more comprehensively about how these might hold together. It will certainly cause some changes in the space. But we’ve seen enough of these acquisitions, and I don’t see it’s going to cause a wild change in the market.

How about the potential impact on Arcserve? You have customers or potential customers served by both vendors as well as a combination of the two. Would that make it a more competitive threat to Arcserve?

Everyone competitively in this space can look at acquisitions like this and be fearful of what’s to come. Others take an opportunistic view because, candidly, no matter how well the integration goes, it’s a ton of time, effort, energy, distraction, potential customer upset, those types of things. And it’s always unclear what the real outcome is a few years later. So we continue to watch that. We continue to watch others to see how they’ve managed their integrations, how they’ve really merged products together or not. But really our focus is on how can we best meet the needs of our customers in the market we’re focused on.

What are your strategic priorities for the rest of this year and going into 2025?

One of our most exciting efforts that was underway when I started was the October launch of UDP 10. That has been a large undertaking. We’re excited to get it out to market. It’s got a couple of key features I think are going to be really impactful for customers, along the lines of kind of enhancing malware protection, getting closer to helping companies solve the security problem in their backups, making certain that backups are protected and recoverable quickly, that when they do have an issue, which inevitably companies do, we provide more flexible disaster recovery and improved data resilience. And we’ll continue our ongoing move to expand our cloud support to make certain that we meet customers’ needs. …

Additionally, you’re going to see us introduce substantive revamps and improvements to our current ransomware offerings. We’re excited to get those to market. We eventually will also expand our cloud offerings to meet customers where they’re asking us for help.

For partners, we have a 100 percent partner model now, and plan to revamp some of the programs that have probably gotten a little bit dated. But we’ve brought in a new head of sales, a new head of product, and a new CFO since I joined. We’re really focusing on how we meet customers’ needs and interact with them through our partner channel. And so we’ll be making some changes later this year.

What’s the key difference between UDP 10 and previous models?

First, we continue to see security worries become more and more prevalent. To address the ransomware and immutability angle, one thing we built into UDP 10 is an assured security scan so that everything we’re pumping into backups is automatically scanned. In the past, we had partnerships to do that. It was sold as an add-on, and sometimes customers said, ‘Well, I’m already running antivirus.’ What we’ve done here is bundled antivirus scans and included it in the price. We think it is critically important customers scan these things in real time as data goes into backups. [Maybe] you can identify problems in your backups much later than they were originally stored there. This will help customers better solve the increasing threat of malware. If you’re using different antivirus technology, having a second one sometimes can catch different things. …

Also, the cost and timelines of a disaster recovery has been a struggle. No matter how much you practice, how much you prepare, you may never know what the issue was. Whether it was a hack, something that you caused yourself, or a hardware failure, how do you get back up and running as quickly as possible? So we’ve built in some on-demand ad hoc virtual standby features that allow you to get online much more quickly. It lets you spool up VMs [virtual machines] whether it’s on-premises or in the cloud, to get back up and running much more quickly without reserved instances. You can just turn it on and spool things up and get back very quickly. …

We’ve made certain that we now cover all the big platforms: Google Cloud, AWS, Azure. We have not had Azure in the past; we have now picked that up depending on customer needs.

That antivirus capability you mentioned, did you partner with a security company on that or develop it in-house?

We’re running Microsoft Defender. It’s a cost-effective solution. In the security world, antivirus vendors have all improved considerably since I was in that business over a decade ago. That being said, having a second tool never hurts. For us, that’s Microsoft Defender.

Can we also expect more development from Arcserve on its stand-alone software?

We recently did a release of our ShadowProtect software, which is a bit more focused on our MSP partner base. In that offering, we built out a bunch of additional connectors so users could pull from an updated data set in different locations. That was a more minor release than UDP 10, but something that again came from listening to customers, listening to partners, and meeting them where they are. We also plan to continue enhancing that product to help users recover to a more robust set of cloud vendors. We also plan a big set of enhancements to the ransomware product that I already had mentioned.

How is Arcserve using AI?

We have a couple things we’ve been putting into our labs and thinking about and testing and trying to determine how best to roll it out in future versions of our products. They’re really focused on a couple of key areas. One is, at the time of backup, can we start to do some behavior-focused detection such that we can recognize odd patterns to determine whether they are security-related or just general backup patterns. We’ve done some testing on things like that, but it’s not ready for prime time. I don’t want to mislead people. But some good work in the labs to figure out how that could become a part of the product suite.

A second area we’re very much focused on, beyond flexibility and ease use and total cost of ownership, is how can we use AI to help automate workflows around backup, recovery, testing, storage forecasting, provisioning and things like that. Some good things are happening in the labs. We’ll be excited as we get into 2025 to talk about them as they migrate from lab testing into product development. We think that will be next year. I think we’re starting to see things that can really provide customer value, but more work needs to be done.