With its acquisition of Syncplicity from EMC, Skyview Capital is betting that the file sync-and-share group will...
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find more success as an independent unit than it did inside the EMC Federation.
Investment firm, Skyview, disclosed its intention to acquire the Syncplicity file sharing business Tuesday. The terms of the deal were not disclosed, but EMC will retain an unspecified ownership stake in Syncplicity. The acquisition is expected to close this month.
EMC acquired startup Syncplicity in 2012, as the online file sharing market was heating up. But Syncplicity was a poor fit with EMC's sales model, and its storage and IT infrastructure focus, industry experts say.
EMC's core focus is infrastructure that resides behind the firewall, while the sync-and-share sales model targets end users and the mobile market.
"We think Syncplicity is a tremendous business," Huberman said. "But the biggest challenge it faced is it was somewhat buried in EMC's go-to-market channel. We are excited to partner with EMC, but we also will be independent from EMC."
Huberman is a former CEO of SMB NAS vendor, Iomega. He also served as EMC's president of consumer and SMB products division from 2008 to 2012 after EMC acquired Iomega.
EMC will continue to sell Syncplicity file sharing as part of the EMC Select partner program.
Syncplicity, founded in 2008, competes in the enterprise file synchronization and sharing (EFSS) market that offers on-premises or cloud-based capabilities to share documents and videos across devices. Its competitors include Dropbox, Box, Watchdox, Egnyte, Citrix Systems, Accellion, Ctera, Microsoft OneDrive for Business and Google Drive.
Syncplicity works as a hybrid cloud, while most of its competitors' products are designed solely for the public cloud. Syncplicity allows IT departments to create rules based on the user, group or folder policy to determine whether files should be stored in the cloud or in an on-premises storage array.
EMC sales model out of sync with Syncplicity
Terri McClure, an analyst at Enterprise Strategy Group, said EMC's sales force hampered Syncplicity adoption because storage administrators never emerged as the primary buyer for EFSS products.
"It's not landing there [storage teams]," McClure said. "It lands in the line-of-business. EMC was not getting sufficient at-bats to build the volume that Syncplicity needed."
"The EFSS buying center is a bit all over the place right now and it becomes quite complex because the solution largely lives outside of the corporate firewall. Lots of teams could get into the mix when an enterprise license is involved -- security, legal, data governance, line-of-business managers and knowledge management," McClure said.
McClure said another sales challenge in EFSS market is its subscription revenue model.
"On day one, you can sell hundreds of seats, but it's just one month's worth of revenue," she said. "It's not profitable on day one. Box has said it takes three years to get profitable on that one deal."
EMC Syncplicity file sharing was cited as a leader along with Box, Citrix and Accellion in the EFSS market in Gartner's Magic Quadrant for 2014. Gartner's report said Syncplicity has a unique approach to synchronization that can be applied to any folder in the file system. However, it also pointed out sales execution problems.
"Despite EMC's ability to execute in the market, Syncplicity has a limited presence and installed base compared with the competition, particularly in North America," according to the Gartner report.
Syncplicity will continue to operate at its Santa Clara, Calif. location. Huberman would not disclose the number of EMC employees that work at Syncplicity, but he said most of them will join Syncplicity at Skyview. The services and support group will remain intact.
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