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Exclusive: Dell Technologies Is Selling This Cloud Group

Apr 20, 2017

Dell Technologies is selling Spanning, a cloud backup company, to private equity firm Insight Venture Partners.

Terms of the deal were not disclosed.

The move comes seven months after Dell completed its $63 billion purchase of EMC, and three years after the then-independent EMC bought Spanning for an undisclosed amount.

Spanning's claim to fame is helping businesses backup and store data associated with popular subscription software services such as Google G Suite and Microsoft Office 365.

Going forward, Spanning and its 56 employees, will operate as an independent entity out of Spanning's Austin, Texas headquarters but Dell Technologies will keep reselling Spanning's services, Jeff Erramouspe, Spanning's new chief executive told Fortune in an interview. Erramouspe was formerly vice president and general manager at Spanning.

Spanning's model of selling subscription-based software differs from EMC's more hardware-focused approach. Within Dell Technologies, EMC focuses on data center infrastructures, including storage and servers.

Insight Venture Partners was particularly interested because it has invested in companies like New Relic (newr) and Shopify—both prominent in the "Software-as-a-Service" market for some time, said Insight vice president Phil Vorobeychik.

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Before the Dell-EMC merger was completed, Dell sold its software and other businesses to pay down debt. Errasmouspe said this deal is different "in that we were an EMC, not a Dell property, and we have a different business model than exists in the broader EMC-Dell companies. EMC is hardware based, and we are Software-as-a-Service."

Spanning competes with Datto Backupify, CloudAlly, Cloudfinder, OwnBackup, and Skykick in helping companies safeguard against data loss in this Software-as-a-Service world. It claims customers like Birkenstock, Clark Construction, Jawbone, OpenTable, and Men's Wearhouse.

"The bottom line is when it comes to SaaS applications, the vendors make sure your data is available, but they cannot protect you from a rogue actor who comes in and deletes data or launches a ransomware attack or frankly someone at your company deletes data by mistake," Erramouspe said. "That happens more than you think, and when your data's gone, it's gone."

Spanning now covers Google (goog) G Suite, Microsoft (msft) Office 365, and Salesforce (crm) applications with plans to add support for more business applications going forward, Erramouspe said, declining to offer more details.

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