Barracuda Expands Into MSP Space With Intronis Buy
Barracuda Networks, a $277-million cloud-connected security and storage company, is acquiring privately held Intronis, a provider of data-protection solutions to managed service providers (MSPs), for $65 million. The deal gives Barracuda access to nearly 2,000 MSPs to better serve its small and midsize customer base, as they move toward partnering with MSPs to provide their IT services. Barracuda reports there is less than 10 percent overlap with existing Barracuda partners.
The Intronis acquisition is a natural progression of Barracuda's channel strategy. Over the past year, the company introduced a new channel program, and expanded its North American distribution network with Arrow Electronics, Synnex and Tech Data.
Today, 98 percent to 99 percent of Barracuda's business goes through the channel. The company also works with approximately 5,000 reseller partners in any given year. However, the acquisition is a big step for Barracuda, extending its reach into a different type of partner, said Brian Babineau, Barracuda's vice president of product and channel marketing.
Babineau calls the MSP channel a natural evolution of IT. "We have roughly 150,000 customers and when you engage with that many customers, you start to see trends in that particular segment of the market. One of the trends we saw was those customers didn't necessarily want to buy and deploy IT on their own."
The acquisition expands Baracuda's channel into the MSP space; gives end customers a different way to consume its technology, particularly as more SMBs want to partner with MSPs to buy, deploy and manage their IT; and improves its ability to serve the MSP market with Intronis' purpose-built MSP platform that enables them to deploy and manage data-protection services for their end customers with reporting, centralized account management and consolidated billing.
"It expands us very quickly into the MSP provider market in North America," said Babineau. "We also are looking at how we take that into international markets. Intronis is primarily North American, and Barracuda has a healthy business internationally; so that is another area of immediate opportunity for both companies."
Intronis also helps Barracuda expand its leading position in back-up, said Babineau. "Intronis served a lot of use cases in the data-protection market where our clients and cloud approach couldn't necessarily reach. We are excited about what we can do by combining our integrated appliance approach and their cloud via MSPs."
"We think the main motive behind the transaction was for Barracuda to improve its position in the MSP space where it had fallen behind some of its primary rivals," said Dave Simpson, senior analyst, storage, at 451 Research, in an analysis of the deal.
Intronis' purpose-built platform also was a big part of the decision. "Intronis had a market-leading purpose-built MSP platform, and we believe MSPs have unique market requirements in order for them to run their businesses successfully and profitably," Babineau said.
Intronis also offers partner-enablement tools to ensure that MSPs are successful and are able to grow their businesses. One of those tools is Intronis Essentials, launched last year, which includes a partner toolkit, updated Knowledge base (i.e., marketing collateral, sales best practices, and technical information and other documentation), and on-boarding materials.
Intronis said many traditional VARs use the platform as the foundation of their managed service business as they transition or add managed service practices.
"A lot of resellers are converting to an MSP or starting an MSP practice," said Neal Bradbury, co-founder and vice president of channel development, Intronis. "We have tools custom-built for MSP providers with our integration for RMM [remote management and monitoring] and PSA [professional services automation] vendors. We can help the resellers become managed service providers, and on the other side, Barracuda gets a huge MSP channel that we created over the past 12 years. It's truly a win-win."
For Intronis, the deal also opens up big opportunities by enabling the company to sell Barracuda's security and data-protection products through the MSP channel and enabling the global expansion of Intronis' offerings.
Barracuda is at the planning stage of a product rollout through the MSP channel. Both companies see a "very good opportunity in the back-up space" with the combination of Barracuda's integrated appliance and Intronis' cloud offering.
What this means to the overall industry is yet to be seen, but the industry is taking notice. 451 Research, which had forecast consolidation in the cloud-based back-up and recovery market, expects further consolidation in the sector over the next six to 12 months, and maybe even sooner.
Gina Roos, a Channel Insider contributor, focuses on technology and the channel.