How Seagate lost $171m before flogging off EVault
Covering itself with glory – or constantly meddling?
So Seagate has offloaded its EVault cloud backup service for a mere $14m, virtually giving away what it originally bought for $185m. How did this train wreck happen?
Cloud backup outfit Carbonite says it is buying “a leading provider of business continuity and disaster recovery solutions” designed for SMBs and small enterprises. It's an all-cash deal and it's getting:
- EVault Cloud Backup and Recovery — software-only solution for server backup
- EVault Backup and Recovery Appliance — all the benefits of EVault Cloud Backup and Recovery with an appliance form factor for local backup and restore
- EVault Cloud Resiliency Services — DRaaS services providing failover in the cloud
Seagate didn't even bother announcing the EVault unit sale, it was that unimportant financially. However it has lost $171m on the deal as, back in 2006, it bought EVault for $185m.
Here's the timeline of events:
- 1997 - EVault founded
- December 2006 – Seagate, under CEO Bill Watkins, buys EVault for $185m, getting 250 staff servicing 8,500 customers, and saying it wants to expand beyond disk drives into the broader storage solutions market
- September 2008 – EVault services are branded i365 (Information, 365 days a year) in 2008, with paperwork search biz MetaLincs and Seagate Recovery Services included in the brand’s offerings, as Seagate sets up i365 wholly-owned subsidiary
- December 2011 – the i365 brand changes back to EVault
- November 2012 – EVault will use Microsoft’s Azure cloud as a back-end data vault
- Late 2013 – EVault develops LTS2 Amazon Glacier-like cold storage offering that uses Seagate’s object access protocol Ethernet-connected Kinetic drives
- July 2014 – Seagate, under CEO Steve Luczo, brings EVault back in-house
- September 2014 – Seagate sets up Cloud Systems and Solutions group to combine EVault and Xyratex units
- December 2014 – Iron Mountain-housed EVault kit used to offer cloud-based backup, recovery and disaster recovery (DR) service
- May 2015 – Seagate combines Cloud Systems and Solutions group and Electronic Solutions (CSES) group under Phil Brace, Electronic Solutions group head
- May 2015 – EVault head Terry Cunningham leaves and subsequently joins Springpath as its CEO
- July 2015 – Seagate increases EVault hybrid backup speed
- August 2015 – Jamie Lerner, ex-head Cloud Systems and Solutions Group, leaves Seagate after CSES setup complete
- November 2015 – South Africa made a deal with Sithabile for local cloud storage service provision using EVault and, we understand, Scality software, opening in 2016
- December 2015 – EVault sold to Carbonite for $14m
We expect Seagate to rename CSES to CES now and sigh with comfort as it gets back to selling bits of hardware and some software, but not cloud services. It was obviously a mistake to buy EVault in the first place and Seagate clearly is not selling a healthy business with great prospects inside its empiren $14m being a derisory amount.
The whole EVault Seagate story is a saga of meddling and tinkering, with brand name and business status changes. It seems that Seagate has been in two minds about EVault for some time, at least from July 2014 when it bought it back in house.
One view, we think, said invest to grow and the other viewed EVault as a loss-making proposition it was best to offload or close down. Right up until Late November the invest-and-grow people were still working, apparently unaware that the counter-group was involved in selling the business to Carbonite.
Did CSES president Phil Brace know that EVault selling efforts were ongoing while members of his EVault staff were working in the Sithabile and Iron Mountain deals?
Looked at from outside the whole EVault experience for Seagate has been a fiasco, from its mis-judged acquisition, its silly brand name changes, its function as a Kinetic and SMR drive channel, right up to parallel efforts to sell the business while also developing an object-based cloud storage service.
Somebody has been an EDolt, you might well think. ®