Dell EMC has sold off another asset after its mega-merger.
Dell EMC last week spun out Spanning Cloud Apps to Insight Venture Partners, less than three years after EMC acquired Spanning for its cloud-to-cloud backup software. Insight added Spanning to its collection of backup companies, which includes the majority stake in Unitrends and investments in Veeam Software and Acronis. Insight is also an investor in storage array vendor Tintri.
EMC acquired Spanning Cloud Apps in October 2014, two years before Dell bought EMC for more than $60 billion. Spanning Backup protects software as a service (SaaS) applications such as Microsoft Office 365 and Salesforce, backing up data created in the cloud that might not be stored on-premises.
Insight will operate Spanning as an independent company. Dell EMC will continue to sell Spanning Backup as its cloud-to-cloud backup product.
Dell Technologies has sold off pieces of its business, such as Dell’s Software Group and EMC’s Enterprise Content Division, to reduce debt from the EMC deal, but that was unlikely a motivation for the Spanning deal. Spanning Cloud Apps CEO Jeff Erramouspe said his company is a better fit with Insight than as part of Dell EMC. The companies did not disclose the purchase price.
Erramouspe said Insight initiated the deal by approaching Spanning.
“They had been following us for a while,” Erramouspe said. “When two giants come together, there is always a chance the smaller companies fall through the cracks. With all that is going on with Dell and EMC, it was a good idea to let Spanning find a home with a (company) that has a lot of expertise in our area.”
‘Points of friction’ inside Dell EMC
Erramouspe said Spanning initially helped EMC fill a hole in its portfolio for cloud-to-cloud backup. But he said there were “points of friction along the way” because the smaller company’s business model had focused on high-velocity, midmarket sales and it had to shift its focus to enterprise customers under EMC’s fold. Spanning lacked the resources to handle both the SMB and enterprise-level sales.
Erramouspe said there wasn’t a lot of integration between EMC and Spanning, so the unwinding of the two companies should be smooth.
“We didn’t share a lot of IP,” he said. “We were nicely self-contained, so it should make it easy for us to peel out.”
Erramouspe had taken on the title as vice president and general manager of the Spanning division of Dell EMC, but now will revert to CEO again. Mike Pav, previously Spanning’s VP of engineering, will become senior vice president of operations.
The Austin, Texas-based company currently has 60 employees with a one-third in engineering and about half in sales, marketing and product managers. Erramouspe said all current employees will remain with the company, but it will need to fill the administrative jobs that previously were supported at EMC.
Spanning Cloud Apps initially started protecting data in Google Apps and then moved on to support Salesforce.com and Microsoft Office 365. It focuses on Google’s G Suite, but it is seeing its Office 365 business grow faster. It has 7,000 customers worldwide and protects 800,000 seats via its cloud-to-cloud technology.
Erramouspe said he is discussing partnerships with the other data protection vendors that Insight Venture Partners invests in.
“We are having discussions, but I can’t go into details,” he said. “There is one that makes a lot of sense, but I’m not at liberty to say until we have something to announce.”