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HPE CEO Neri: HPE’s $374M Zerto Buy Key To Cloud-native, Software-defined Future

‘This acquisition accelerates HPE storage transformation to a cloud-native software-defined data services business. Zerto’s industry-leading disaster recovery software is proven with over 9,000 customers globally and over 350 managed service providers who power their data protection-as-a-service offering with Zerto’s software,’ says HPE CEO Antonio Neri.

Hewlett Packard Enterprises’ planned $374 million acquisition of cloud data management and data protection software vendor Zerto is part of a longer-term vision to help HPE transform to more of a cloud-native, software-defined powerhouse with a focus on the company’s HPE GreenLake edge-to-cloud platform, according to HPE CEO Antonio Neri.

Neri, speaking Thursday on a company investor call, called Zerto an industry leader in cloud data management and protection services.

“This acquisition accelerates HPE storage transformation to a cloud-native software-defined data services business,” he said. ”Zerto’s industry-leading disaster recovery software is proven with over 9,000 customers globally and over 350 managed service providers who power their data protection-as-a-service offering with Zerto’s software.”

[Related: The Heartbeat Of Business: The 2020 CRN Storage 100]

That Zerto software, built on journal-based continuous data protection, helps customers protect virtualized, cloud-native, and Kubernetes workloads, and provides rapid recovery in case of ransomware or cybersecurity attacks, Neri said. It also makes application data mobile across hybrid cloud and multi-cloud environments, he said.

The need to both protect data and turn data into insights has never been more important, Neri said.

As data continues to grow exponentially from edge to cloud, businesses need new ways to use data to unlock enterprise agility, empower innovators, and unleash the full potential of data, he said. HPE recently addresses these critical issues with its Unified Data Operations, or DataOps, to eliminate data silos and the complexity of managing data while streamlining the movement of data across hybrid clouds, he said.

HPE also recently introduced HPE Data Services Cloud Console powered by HPE GreenLake to provide an expansive suite of cloud data services to automate and orchestrate data and infrastructure with a cloud experience, he said.

Together, they have helped transform HPE storage to cloud-native, software-defined data services, with storage and data management delivered as a service, Neri said. This includes May‘s introduction of HPE Alletra cloud-native data management.

“We are now taking another big step forward in achieving our vision with today‘s announcement,” he said.

Zerto is a market leader in continuous data protection, which means that every server in a customer site is able to do small, maybe five-second, checkpoints on what data applications are writing to any data store, said Tom Black, senior vice president and general manager of HPE’s storage business, during his prepared remarks on the investor call. Those data points are bundled and moved to a secondary site, which could be in a cloud or a data center, Black said.

“The most important thing is, if you look at when a disaster hits, you can rewind data to within seconds of when the last known information was, and then restore all of your VMs (virtual machines), your containers, and your applications in that secondary site,” he said. ”So what this really gives customers is the fastest recovery point objective for always-on applications.”

This is an especially important capability in the wake of several recent significant ransomware attacks, Black said.

“[Zerto provides] a market-leading solution on a technical level, and is proven through a large customer base to protect against ransomware, because you can rewind to within seconds before attackers took your data, encrypted it, and attempted to hold a customer hostage,” he said.

Zerto, founded in 2009, brings to HPE about 500 employees and over 9,000 customers, Black said. The company underpins the data management capabilities of many large MSPs as well as enterprise customers, he said.

As HPE integrates Zerto into its cloud data services, it gets market-leading acceleration around the two core services of disaster recovery and data migration, Black said.

Going forward, Boston-based Zerto will become the Israeli Center of Excellence for HPE storage, Black said.

Zerto complements HPE storage in many ways, including how it works with other storage vendors in the data protection space including Veeam, Cohesity, and Commvault, said Omer Asad, HPE’s vice president of primary storage, hyper-converged infrastructure, and data protection.

Zerto, like Veeam, Cohesity, and Commvault, are all part of the HPE Complete third-party partner program, and provide different ways to protect data depending on customer needs, Asad told CRN.

“For instance, a high-end customer often deploys Veeam and Zerto together with HPE’s Nimble or Primera storage systems,” he said. “A lot of our vendors start out on the data protection side and inch their ways towards disaster recovery. Zerto started in disaster recovery and inched its way into backups. When it comes to disaster recovery with orchestration, hands-down Zerto is the leader.”

Working with multiple storage vendors despite its own storage technologies is important to HPE’s success, said Sandeep Singh, vice president of storage marketing for HPE.

“HPE believes in customer choice,” Singh told CRN. “We recognize that no one solution fits all. We are able to offer the right solutions to meet customer needs.”

Zerto also has technology relationships with other storage vendors including HPE competitors, and those relationships will continue, Asad said. In addition, Zerto’s disaster recovery technology underpins disaster recovery-as-a-service for 95 percent of managed service providers, he said.

On the financial side, Zerto has annual revenue of over $130 million, of which about one-third is additive to HPE‘s as-a-service annual recurring revenue. The remainder includes licensing revenue.

The deal is slated to close during HPE’s fourth fiscal quarter 2021.

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