How an Antivirus Company became a Trailblazer for Cyber Security 2.0

“We believe that Acronis Cyber Protect is among the most comprehensive attempts to provide data protection and cyber security to date.“

-International Data Corporation

When we bought our last personal computer, we most likely got the option to choose between various cyber security packages to be pre-installed. Acronis was one of the options besides Norton, McAfee, Avast, Bitdefender, and many others. What we may not have known at that time: Beneath the surface, Acronis is way much more than the run-of-the-mill anti-virus/anti-malware software that prevents our parents from disclosing our passwords to shady figures hiding in under-policed geographies. In fact, Acronis is uniquely positioned to take advantage of the USD 50 billion plus cybersecurity space, thanks to an all-in-one cloud-based platform. The cloud-based cyber security market is one of the fastest-growing and most recession-proof IT verticals. Did the USD 50 billion-plus figure take you off guard, or do you wonder what the fuss is about some hacker trying to erase your hard drive? In that case, we invite you to read our article “Cybersecurity 2.0 – From combating viruses to protecting lives” and then return and learn more about Acronis and its unique business model below.

Cybersecurity – Amongst the most defensible verticals in an economic downturn

By now, you know how big and lucrative the overall cybersecurity market has become. It may be particularly robust, or even anti-fragile[i]: According to Morgan Stanley, cloud-based security software is amongst the most recession-proof verticals, with most CIOs surveyed reporting that it is least likely to be cut in 2022. One explanation is that ransomware and other malicious cyber-attacks have sharply increased. They appear to be the unwelcome side-effect of the significant digitalisation trend observed since the beginning of the COVID-19 pandemic.

Introducing Acronis

Founded in 2003 and headquartered in Switzerland, the U.S., and Singapore, Acronis today is a cybersecurity company that solves safety, accessibility, privacy, authenticity, and security challenges by offering efficient and secure backup, security, disaster recovery, enterprise file sync, and shared solutions built for hybrid cloud environments. Acronis has been named a visionary for several years in a row by Gartner, the renowned global technology-focused research and consulting firm that published the famed Magic Quadrant as part of its annual Gartner Report.

From boot loaders to backup and disaster recovery software

Serg Bell, Ilya Zubarev, and Stanislav Protassov established Acronis in Singapore in 2003, focusing on backup and disaster recovery software and infrastructure. Thanks to its early commercial success, the firm secured a first funding round in January 2004, led by Insights Venture Partners.

Going to the cloud

Acronis underwent a significant strategic shift in 2013 when it introduced an all-in-one/cloud platform that merged its core business with a new suite of cybersecurity products and services. This early adoption of a platform-based business model enabled the company to refocus its entire offering around the principles of interoperability and low ownership cost, while ensuring the easy integration of new products on the Acronis unified platform and cloud infrastructure.

Conquering an overlooked customer segment

The company primarily targets small to medium-sized business (SMB) customers. This segment has been historically overlooked by most of its competitors. Thanks to a very effective B2B2B go-to-market and business model, which required more time and effort to implement than a conventional approach, Acronis has been able to generate a strong customer network effect that results in a critical defensive moat.

Taking advantage of network effects to develop loyal and profitable customers

Over time, the vendor has also built an extensive network of managed service providers (MSPs) and resellers (approx. 15,000), taking advantage of strong network effects, outstanding customer retention and upselling strategies. In addition, the company has reportedly developed three to five times more Application Programming Interfaces (APIs) than comparable companies, allowing them to be highly flexible to clients’ needs and specificities. The resulting interoperability of all Acronis products is another driving force behind the company’s success. Today, Acronis serves customers in more than 150 countries.

Setting its sights on partners and larger businesses

While most of Acronis’ revenue today is generated by small and medium-sized customers, mitigating revenue-dependency risks with single large clients, Acronis has begun to use its brand recognition and extensive product offering to target establish an increasing number of technological partnerships with renowned brands such as Williams Racing, Liverpool FC and Manchester City FC, Atletico De Madrid, Detroit Pistons, or the Boston Red Sox. To date, Acronis has secured ABB, Airbus, Adidas and Nestle as clients, only to name a few.

Operating a powerful backbone of global data-centers

Thanks to Acronis’ proprietary global data-centers network, Acronis is well positioned to support its customers on data sovereignty. In addition to offering locations in observance of the respective client jurisdiction, they ensure high data availability data availability, low latency and service level agreement compliance.

Growth attracts investor interest – fuelling even faster growth

Acronis also sparked the interest of significant institutional investors, as seen by a recent substantial funding round led by BlackRock, which pushed the cybersecurity vendor’s valuation to USD 3.5 billion. In the wake of the previous round led by CVC Capital Partners in May 2021, Serg Bell handed over the helm to Patrick Pulvermueller as the new Chief Executive Officer. Pulvermueller, former President of Partner Business at GoDaddy, is well-regarded due to his experience in leading privately held companies that are inching closer toward an exit, be it a trade sale or an IPO. In the process, both Bell and co-founder Zubarev stepped away from the company’s day-to-day activities while remaining significant shareholders. Paul Maritz today acts as the Chairman of the Board, and Michael Callahan joined the firm as Chief Marketing Officer. All of the above reasons are factors why we are investing in Acronis.

[i] https://en.wikipedia.org/wiki/Antifragility