Arcserve Makes Sudden Cloud Services Exit, Leaves MSPs Scrambling

‘This is typical MSP BS. We did everything an MSP is supposed to do. We couldn’t believe they would get out of the cloud and leave us no path forward. You can’t just get out of a business and say good luck or swim. Everything in this business is about migrations,’ says Erik Semmel, vice president of client services at Tab Computer Systems, a large Arcserve MSP.

Storage and data protection software developer Arcserve has suddenly terminated sales of its Arcserve Cloud Services and Arcserve OneXafe Solo offerings, and in the process is forcing its MSPs to quickly scramble to provide replacements.

Minneapolis-based Arcserve, one of the original pioneers of data protection technology, Friday sent a memo to MSPs telling them that Monday, Feb. 12, was the last sales day for the two technologies via the company’s Arcserve webstore. Sales of the technologies will be available via distribution until March 8, the memo said.

Support for those products is scheduled to end July 31.

A copy of that memo, entitled “Important Notice - Changes to Arcserve Cloud Services & Arcserve OneXafe Solo,” was obtained by CRN.

“The purpose of this notice is to inform you that Arcserve LLC, a Delaware limited liability company, on behalf of itself and its affiliate StorageCraft LLC, an Arcserve company (collectively referred to herein as “ Arcserve”), has begun the process of end-of-life (“ EOL”), for its Arcserve Cloud Services product and Arcserve OneXafe Solo product offerings,” Arcserve wrote.

The decision to end-of-life those technologies was a strategic decision that aligns with the company’s support policy and cloud services terms and conditions, and enables Arcserve to invest in innovative solutions to best serve its partners and customers, the company wrote.

“To continue providing the high-quality cloud services you expect from Arcserve, we have determined a price adjustment is necessary across all applicable service tiers for Arcserve Cloud Services products, effective as of March 8, 2024. The new pricing set forth supersedes all special pricing and discounts. Arcserve has made this decision after careful evaluation of market conditions, operational costs, and investments, ensuring that we can continue to offer a seamless experience and uphold our commitment to continued excellence,” Arcserve wrote.

Arcserve in 2021 acquired fellow data protection developer StorageCraft, a move that brought Arcserve solidly into the MSP business.

MSPs are going to be furious, said Erik Semmel, vice president of client services at Tab Computer Systems, an East Hartford, Conn.-based MSP which is Arcserve’s third largest partner in the U.S. and fifth largest in the world.

“This is typical MSP BS,” Semmel told CRN. “We did everything an MSP is supposed to do. We couldn’t believe they would get out of the cloud and leave us no path forward. You can’t just get out of a business and say good luck or swim. Everything in this business is about migrations.”

Vendor and MSP relationships have to be a two-way street, Semmel said.

“We help Arcserve,” he said. “We stuck with them through other issues like the 2022 StorageCraft backup data loss. But they tell us they sell SaaS backup with unlimited storage. Unlimited? Until when?”

Semmel said he likes Arcserve technology because it works, but this situation is difficult for MSPs.

“On top of it all, they tell us they will crank up our rates because of all the good service they provide,” he said. “Holy moly. This shouldn’t happen in a 21st century technology.”

Vitali Edrenkine, Arcserve’s executive vice president of worldwide sales and marketing, told CRN that his company knows this is a big deal to many of its MSP partners.

“We regret the impact that it's having,” Edrenkine said. “But this was not a decision that we made lightly. It is something that we carefully thought through. We spoke to many of them and listened to their feedback. We also took a really hard look at our own operations and the state of the market. And this decision became imperative to us.”

Arcserve sought to provide MSPs with a reasonable timeline taking into account its own constraints and decision making, Edrenkine said.

“That's effectively just under six months in this whole process,” he said. “We will provide them with some guidance and support as to how to migrate away from Arcserve Cloud Services during the process.”

Aftab Alam, executive vice president for Arcserve’s product management, told CRN that his company will definitely provide ongoing support to partners during this process.

“In terms of compensation, we certainly don't have any programmatic response there,” Alam said. “However, I'm sure you know that if a partner reaches out to us, we'll do our best to work with them as we do understand the pressures that they're under as well.”

The cost of providing cloud storage is a factor in the move to exit that part of the business, Edrenkine said.

“But it's also a factor of how do we prioritize our investments and where do we want to accelerate our work,” he said. “[There’s] a lot of excitement, at least on the sales and marketing side, about some of the prioritizations that are happening with our friends in product and engineering and how this will equip us on the sales side with a portfolio and a roadmap that are going to excite our partners going forward.”

Arcserve as of now does not have an official recommendation for other cloud providers MSPs can use, Edrenkine said.

“As I said, we're working on more specific guidance, like more specific recommendations for those partners on how to migrate away,” he said.

Alam said the gap in capabilities MSPs will be most concerned about is related virtual data restores to Arcserve’s cloud.

“We are working with other OEM cloud providers to provide a sort of soft landing for partners that just want cloud-based storage,” he said. “But that is a differentiated value proposition than what they get today where they can do a restore in our cloud.”

Those OEM cloud providers include companies with “white glove” services that cost more, and those who provide basic low-cost cloud storage, Alam said. He declined to publicly list potential cloud provider partners.

Edrenkine said he has two messages to MSPs who are now looking at the need to migrate their customers to another cloud and who may be asking whether they wish to work with Arcserve going forward.

“Message number one is that ShadowProtect SPX remains an important core component of our portfolio, and it's going to continue to be supported and evolved,” he said. “It is absolutely unaffected by these announcements. And number two is more broadly, we continue to be a channel-first company. Our partners are an integral part of our success. So we'll continue to operate as such as we move forward.”

CJ Fairfield contributed to this story.