J2 Global, Bullish on Veeam, Seeks to Acquire Veeam Partners

As its Veeam backup and recovery backup business continues to grow with customers, Veeam channel partner J2 Global has been on a mission to acquire other Veeam services partners to further expand the company’s revenue and data backup operations.

For J2 Global, that acquisition strategy has been going on since last fall as the company continues to be in active conversations with several potential acquisition targets, Dan Timko, the chief strategy officer at J2 Global for its related OffsiteDataSync backup as a service business, told Channel Futures.

J2 Global’s Dan Timko

“If you look at the Veeam ecosystem, it was ripe for some rollup acquisitions,” including J2 Global’s acquisition of OffsiteDataSync itself in the third quarter of 2019, said Timko. “This was our strategy and the reason OffsiteDataSync was purchased in the first place. Our DNA is that of being a buyer.”

J2 Global, which in addition to its cloud backup business also owns a wide range of internet services companies, has made more than 180 business acquisitions since its founding, according to the company.

“We’ve been very open about wanting to acquire more Veeam partners, whether it be at Veeam partner advisory meetings or at other Veeam events,” said Timko. “We’re an active buyer. There are MSPs out there who are doing great things. And there are some companies out there who are finding that it’s no longer enough to do backup on their own, but that it’s better to work with a channel partner that is offering it.”

Those are some of the acquisition targets for J2 Global today, he said. “Maybe they have a small business with a chunk of revenue. That doesn’t mean it’s too late to partner with us. And we don’t have to buy a whole MSP. We can just buy a backup business the MSP has. The MSP will still have the customers, but they won’t have to continue to run the back end.”

For smaller MSPs, that would allow them to spend their time working where they should be working — as trusted advisers for their clients, said Timko.

This road map has been in the works since Timko started working for J2 last September, he said. “It was clear to me when I was brought on that this was part of the strategy,” he said. “Part of the reason I was brought on was that I’ve been in this specific data backup ecosystem for 10 years.”

The strategy was not influenced in any way by Veeam’s $5 billion acquisition by Insight Partners in January, but had been in the works long before that deal, said Timko.

The range of acquisition targets is wide, including large data backup companies to smaller mom and pop MSPs. “We try to identify who would be a fit and look at full acquisitions or at just carving out pieces. All of those options are on the table.”

J2 Global, with $1.4 billion in annual revenue, is also known as a digital media and shopping company, with brands like Mashable, IGN, PC Mag…

…and Spiceworks. It’s Veeam-based backup business also includes its KeepItSafe division since 2010.

ESG’s Christophe Bertrand

Christophe Bertrand, an analyst with Enterprise Strategy Group, told Channel Futures that the J2 Global acquisition strategy comes at a time when backup-as-a-service (BaaS) and IT disaster recovery-as-a-service (DRaaS) have experienced significant industry traction and acceleration in the past four years and are expected to have even greater adoption.

“Veeam has been very successful with their solutions and their Cloud Service Provider program with recent improvements to build the right tools and incentives to support the provision and delivery of services,” said Bertrand. “It is a very good thing for channel partners who need to offer more BaaS and DRaaS options versus traditional deployments.”

Bertrand said that in such a hot market he’s not surprised that investors such as J2 Global would be eyeing such moves. “I actually expect more activity in this space in 2020,” he said. “However, the real prize is not just backup or DRaaS — it’s what I call Intelligent Data Management, which adds context, classification and analysis to the data in order to make it easier to reuse for additional business purposes.”

That will be an amazing opportunity in the future for the channel, he explained, as partners gain the ability to sell to more “personas” and develop new offerings. “In time I expect Veeam to expand their capabilities and offer these as a service, too, as part of the platform.”

Another analyst, Lisa Pierce of Gartner, said the acquisition plans follow recent trends. “As we have observed this is an example of continued consolidation of an increasingly commoditized market,” she said.