Kubernetes backup and recovery startup Kasten has announced a strategic partnership with Veeam.
Founded in 2017, Kasten focuses on backup and recovery for cloud-native applications, particularly on Kubernetes. What was a bit of a small niche three years ago has grown substantially as the popularity of micro-services generally, and Kubernetes specifically, has exploded.
“We’ve actually been benefiting from Kubernetes and cloud-native picking up steam,” said Gaurav Rishi, Head of Product at Kasten. “As these applications that have been built on these constructs go into production—for regulatory reasons, or just for good hygiene, or it’s an RFP requirement on applications to make sure they’re protected—we ended up needing these data services. And that’s where Kasten comes in.”
Strategic partnership announcements can be fairly ho-hum, but I find this news interesting for several reasons.
Firstly, Veeam’s continued push into the enterprise requires an expansion in the scope of what its products can do. Enterprises are complex and varied beasts that frequently have a bit of everything going on somewhere inside what can appear as a unified whole to external observers. Kubernetes is absolutely something that enterprises are working on, even if the total number of ‘production’ workloads is still small.
Research and development is, oddly, often not seen as a production activity, even though it’s a vital part of the supply chain for new products. Production applications don’t suddenly appear fully-formed from some parallel dimension; they have to be invented and built. While this is happening, they need to be backed up, in case someone fat-fingers the server and loses six months of hard work. This is as true of applications running on Kubernetes as any other platform.
Secondly, Veeam’s approach to product development is shifting as part of its change in ownership. It is starting to lean a little more towards buy versus build.
“As we move from our founder led business, which has worked great for a long time, maybe we’ll buy more, or buy some, versus making it all,” said Veeam CEO, Bill Largent. “That’s the movement that we’ll have as a result of that change in ownership.”
Finally, note that the lead investor for Kasten’s A round funding ($14 million in August 2019) was Insight Partners, the same firm that acquired Veeam earlier this year.
My view is that this strategic partnership is the initial maneuvering for an acquisition. It allows Veeam to determine how well it thinks it will be able to integrate Kasten into its portfolio, and to figure out how much it will be willing to pay. Kasten, meanwhile, gains access to a broader customer base and a chance to demonstrate how much easier Veeam will find it to simply buy a working solution rather than try to build one internally itself. I would not be at all surprised if Kasten were to be acquired by Veeam in the near future.
Which makes me curious about what other gaps in Veeam’s portfolio it will be looking to fill by acquisition. I imagine reviewing Insight Partners’ investment portfolio might be a good place to start.