Report: HPE ponders acquisition of backup leader Veeam Software

Hewlett-Packard Enterprise Co. is mulling an acquisition of data center backup and recovery provider Veeam Software, according to reports.

The Register cites unnamed sources as saying HPE is looking at buying the company to bolster its own data center backup and recovery business, which trails Veeam by some distance according to analyst firm Gartner Inc. In its most recent Magic Quadrant for Data Center Backup and Recovery Software released in June, Gartner placed Veeam in the “Leaders” category, while HPE only just scraped into the “Challenger’s” box.

The Register goes further and lauds Switzerland-based Veeam is “the world’s leading independent backup software company,” listing a host of impressive achievements it has made over the last year to justify that claim. They include 50,000 new customers and a 57 percent rise in enterprise license bookings.

HPE has been fairly busy with acquisitions this year. Its already bought up hyperconverged infrastructure company SimpliVity Corp. for $650 million and network security vendor Niara Inc. for an undisclosed price. In addition, HPE is all set to complete the $1.2 billion acquisition of Nimble Storage.

Still, any deal to buy Veeam would likely be more expensive than those acquisitions. The Register says that Veeam’s revenues of $607.4 million in 2016 suggest a purchase price in the range of $1.5 billion to $2 billion, if the company decided to sell.

Of course, that figure certainly falls within the price range of a company of HPE’s size. Moreover, HPE is still seeking new avenues through which it can grow its core businesses, both organically and via acquisitions.

That means there could be some legs in this rumor, Holger Mueller, principal analyst and vice president of Constellation Research Inc., told SiliconANGLE. “Veeam is a potential target that could add an important piece for HPE to stay a key partner for CIOs in the 21st century,” he said.

He added that one big factor that might tempt HPE to make a move is that backup is a “super sticky” area that offers a reliable income stream. “Once up and running, enterprises seldom change their backup provider,” he said. “Instead they use them for a long time and keep paying for a long time.”

When asked about the rumors, HPE said it doesn’t comment on speculation of that nature. Veeam also declined to comment.

Image: HPE

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