Data Protection Consolidation: Carbonite Acquires Rebit's Tech, Rebit To Wind Down

Carbonite's move last week to purchase intellectual property and hire engineers from Rebit gives Carbonite access to patents it uses in its cloud storage offerings. But the acquisition also means data backup and recovery software developer Rebit is in the process of winding down operations, executives of both companies said.

Cloud-based data protection services provider Carbonite said last week that it acquired core technology along with six patents from Longmont, Colo.-based Rebit. Carbonite also hired six Rebit employees, five of whom are engineers, and has taken over that Longmont office, said Nina McIntyre, chief marketing officer of Boston-based Carbonite.

Four of the patents are related specifically to the technology that Carbonite has been OEMing from Rebit for about four years for its mirror image service, McIntyre told CRN. With the acquisition, Carbonite's patent count jumps to 15, with an additional 17 patents pending, she said.

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"Our goal is to take advantage of an opportunity to own the core mirrored imaging technology," she said. "We think highly of the technology. Our objective is to be able to differentiate our products with this technology."

Rebit's -- now Carbonite's -- mirrored imaging technology is a very robust and hardened technology, McIntyre said. "It's not only proven in our solutions, but also in Rebit's customer base and in other OEMs."

McIntyre denied that Carbonite purchased the Rebit technology as a defensive response to the possibility that Rebit might close. "Our maturing as a company is not defensive," she said. "You don’t buy a technology and bring in related people as a defensive move. We saw an opportunity to bring in this technology. This is an opportunistic move for us."

With the sale of its intellectual property and the transfer of six personnel to Carbonite, Rebit is essentially closing, said Rebit CEO Paul Guerin.

Rebit still exists as a shell company to offer its customers and partners a transition path to other data protection technology suppliers, including Carbonite, Guerin told CRN.

"We're not doing a hard hold on this," he said. "But over the next couple months, we'll be giving partners a chance to phase out of our offering. We're not telling customers, 'Here's the data. Good buy and good selling.' We're trying for a graceful wind-down."

Rebit found it difficult to continue operations in the face of an increasingly competitive environment, Guerin said.

"We built great technology," he said. "But this is a very competitive industry, especially in the SMB data protection market."

Rebit may have also hurt itself with a move to expand its business into the white-label on-premises file sync and share business, Guerin said.

"That wasn't the right move," he said. "But the main problem is the tough consumer backup business. We're seeing a lot of consumers share a lot of photos using Facebook, Instagram and other services. And while I don't view Dropbox as a real backup application, a lot of customers don't see the distinction. Furthermore, there are lots of really credible and high-quality backup offerings out there with Google and Microsoft. These have made it difficult to even charge customers for a backup service."

Guerin said he has no new ventures in mind for the time being, as he remains busy working with Carbonite to transition customers and partners. "It's important to them and to us to do a good transition," he said.

Carbonite has been a good channel-friendly partner, with the ability to offer flawless recovery of any customer data, including from SQL databases, one of the hardest types of data to work with, said Ed Tatsch, president of ETS Networks, an Arden, N.C.-based solution provider and Carbonite channel partner.

Carbonite also has a proven record when it comes to expanding its technology, Tatsch told CRN.

"It makes sense for Carbonite to buy the Rebit technology," he said. "It has to be at least a partly defensive move. It has to be. If Rebit is closing, Carbonite would have to buy the patents. If you rely on someone else's patents for a part of your business, it's good to buy those patents when needed."

David Levenson, owner of Creative Computer Consulting, a Framingham, Mass.-based solution provider and Carbonite channel partner, told CRN he was sorry he never signed with Rebit.

"I liked the Rebit channel program," Levenson said. "Some of my clients are small companies with maybe up to five users, and would have been perfect with Rebit."

Carbonite, however, has been a good partner, Levenson said. The company offers a lot of training and support, and only lacks in one area.

"I'm trying to do more HIPAA-compliant offerings for clients," he said. "Carbonite doesn't have that yet, but is working on it. So in these cases, we use StorageCraft's ShadowProtect solution via eFolder."

Neither Carbonite nor Rebit would discuss the price paid for the Rebit intellectual property. They also declined to discuss other storage vendors who may have OEMed the Rebit technology.