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There was an interesting comment by Unitrends CEO Mike Coney following the announcement of his company's acquisition of Philadelphia-based PHD Virtual yesterday, as quoted by TechTarget.com:
"Unitrends CEO Mike Coney said the addition of PHD gives the vendor a better chance of competing with virtual backup pioneer Veeam Software and makes it stronger in cloud backup."
The irony, perhaps, is that all three firms (Unitrends, PHD Virtual, and Veeam) have had the same VC firm, Insight Venture Partners, as their primary investor.
Unitrends, based in Columbia, SC, announced a major growth equity investment by Insight at the end of October.
Veeam, which is the largest of the three, received a secondary minority investment from
Insight this year. Veeam, which is based in Switzerland, has reported recent bookings growth of close to 100% and says it is shooting for $1 billion in annual revenue.
PHD Virtual, the smallest of the three, had received at least $8 million in venture capital from Insight and Citrix Systems by my count, plus $2 million venture debt financing from Wellington Financial this year.
PHD Virtual had its beginnings in New Jersey and still has many of its tech people in
Morris Plains. Insight got involved in 2010, put Thomas Charlton in as CEO and moved its
headquarters to Center City ( See my 2011 article on the company) . PHD Virtual grew to at least 80 employees (its LinkedIn page shows 82 currently). Charlton, who now heads his own Conshohocken-based firm, Goliath Technologies, was succeeded by James Legg last year. Coney says he expects PHD Virtual to remain in Philadelphia, and Legg to continue as CEO.
I had though that Insight might put PHD Virtual together with Veeam, but Insight is segmenting the market differently. The combined Unitrends/PHD Virtual will focus on the SMB market. Coney told TechTarget that PHD Virtual's biggest weakness was
the lack of a physical backup component, as PHD's offering was entirely virtual, and Unitrends' was the lack of a virtual solution.
"When we get into a competitive situation with Veeam -- especially if it's a 100 percent virtual account -- our win rates drop," Coney said. "The PHD team is successful against Veeam, but when they get into a situation where they need physical protection, their win rates drop. So there's a nice marriage of our go-to-market strategies."