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Spanning Backup survives series of ownership spins

Spanning cloud-to-cloud backup spins its way out of Dell EMC, embraces Amazon Web Services and protects data that lives in Microsoft Office 365, Salesforce and Google apps.

After going through three ownership changes in 30 months, cloud-to-cloud backup pioneer Spanning looks much like it did when EMC acquired it in late 2014.

That comes as good news and bad news for Spanning Backup and its customers. The good piece is Spanning has retained its top leadership, bringing a great deal of stability despite the ownership changes. On the other hand, the changes may have cost Spanning the chance to grow as the need for backup of cloud apps has expanded.

"It's definitely been an eventful three years for us," Spanning CEO Jeff Erramouspe said. "It's been an interesting ride."

Erramouspe joined Spanning as chief revenue officer in 2012 and succeeded founder and original CEO Charlie Wood the following year. He sold the company to EMC after EMC leadership saw value in protecting software as a service (SaaS) applications. After a year of transition, Erramouspe said Spanning started to gain steam under the EMC banner until Dell bought EMC in a $60 billion-plus deal that closed in September 2016.

Dell spun Spanning out to private equity firm Insight Venture Partners in April 2017.

Spanning finding itself after getting 'lost in the shuffle'

Erramouspe said Spanning had 52 employees when EMC acquired it and 54 employees when Dell spun it out two years later. It has 75 employees now. Its products are Spanning Backup for Office 365, Spanning Backup for G Suite for Google apps and Spanning Backup for Salesforce.

Erramouspe said only one member of his senior leadership team has left since the EMC acquisition. But that may not have been the case if it remained part of Dell. Although Spanning, like Dell, has its headquarters in Austin, Texas, the Spanning crew never felt like it fit in at Dell.

It's definitely been an eventful three years for us. It's been an interesting ride.
Jeff ErramouspeCEO, Spanning

"We got lost in the shuffle," Erramouspe said of the Dell-EMC merger. "My team was going to disintegrate. I told Dell if we had to move, my whole team would leave, including me."

Still, he said Dell EMC remains a close strategic partner and they are working on an OEM deal to sell Spanning Backup.

Spanning started out protecting Google Apps in 2011, and added protection for Salesforce in 2014 and Office 365 in 2015. Spanning Backup creates a second copy of data created in SaaS applications on Amazon Web Services (AWS) so customers have a backup copy if they delete information. The main competition for Spanning early on came from other small dedicated cloud-to-cloud backup vendors such as Backupify (now part of Datto) and OwnBackup, but the larger backup vendors also protect SaaS apps now.

Insight Ventures is no stranger to backup vendors. It has a minority stake in privately owned Veeam Software, and investments in Unitrends, Acronis and even Spanning's direct competitor OwnBackup. The private equity company runs all those vendors independent of each other, but Erramouspe said there are discussions about partnerships.

Insight has pushed Spanning to keep its margins down, leading the cloud-to-cloud backup vendor to put much of its data in AWS S3 Standard-Infrequent Access (IA). AWS Standard-IA costs less to store and retrieve data than S3 Standard, and is a middle tier between S3 Standard and Glacier for cold data.

Erramouspe said Spanning is also exploring moving some data to Microsoft Azure because "that's how you get Microsoft to love you." But for now, "We run our entire business on Amazon," he said.

How Spanning uses AWS

Spanning Backup stores metadata in databases and stores everything else as objects on AWS. It stores more than 1.5 billion data objects in AWS. To keep costs down, it is moving large files (over 128 KB) from S3 Standard to S3 IA, according to vice president of engineering Andrea Adams.

While IA has higher retrieval costs, it lowers the cost of rarely accessed data.

Spanning Backup starts at $48 per user per year, so the storage costs are covered by Spanning. The vendor said moving to S3 IA has brought roughly a 20% overall reduction in costs for Spanning's Google product -- where its S3 costs are the highest because it's Spanning's oldest product.

"After we became part of Insight Venture, improving our margins became a huge focus for us," Adams said. "Our primary cost driver is storage. We have an unlimited backup and storage policy, so that was our primary focus."

She said Spanning has a defined lifecycle policy to transfer data from S3 Standard to S3 IA after 30 days. Adams said Spanning has more than 13 PB of data in S3, with more than 90% of that in IA storage.

Adams said Spanning is also evaluating using AWS Glacier for older data. Placing data in Glacier would reduce costs more, but Adams said Spanning's development team will need to work on mitigating Glacier's performance tradeoffs.

"Access times are much longer for Glacier," she said. "S3 and S3 IA access times are immediate. Glacier can take five to eight hours to access data. If we store data older than a year in Glacier, can we still provide compelling service while reducing storage charges?"

Ransomware, GDPR highlight future work

Erramouspe said Spanning Backup for Office 365 is its fastest growing product. He is counting on Office 365, as well as security requirements around ransomware and the General Data Protection Regulation (GDPR) to help grow Spanning under Insight Venture.

All Spanning customer data is in the cloud, mitigating the danger of ransomware, Erramouspe said.

"Ransomware is a huge opportunity for us," he said. "We are functionally an air gap. We have point-in-time restore. Delete and restore is a much better way to get data back. We can restore what you need quickly."

Spanning will hire a data protection officer to become GDPR-compliant, he said. It is also adding features such as retention/age-out periods, and more sophisticated deletion capabilities. It already supports unlicensing to erase data in G Suite and Office 365.

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