‘We’re going to have a console that’s common for both and have a very rich roadmap for both products so customers on both sides will get innovation. But the powerhouse of innovation builds on what Cohesity brings to the picture. That’s why the new company, which is going to be called Cohesity, is going to having the speed and innovation of Cohesity combined with the scale of Veritas,’ says Cohesity President and CEO San Jay Poonen.

Data security technology developer Cohesity’s planned acquisition of the enterprise business of data protection powerhouse Veritas Software is on schedule to become a global $2 billion to $5 billion cybersecurity powerhouse.

That’s the word from Sanjay Poonen, president and CEO of San Jose, Calif-based Cohesity, who Monday used his keynote at this week’s 2024 XChange Best of Breed Conference in Atlanta to tell solution providers that he realized that Cohesity could become the number one provider of data protection and security technology.

Cohesity in February said it would acquire the enterprise business of Veritas, valuing that business at $3 billion. Poonen said the deal is expected to close by the end of this year.

[Related: Cohesity CEO On Veritas Acquisition Update, Delayed IPO And Latest Funding Round]

Poonen said that when he joined Cohesity two years ago after serving as SAP’s president and VMware’s chief operating officer, he found a company with tremendous technology.

“We talked about the 5 S’s: speed, scale, security, simplicity, and smarts,” he said. “So the tech is very differentiated. It’s the base for why we can win. But it’s a crowded market, data protection. There’s, I call it, sort of a New York marathon with 50 players. I don’t know why venture capitalists put so much money into this space. This was all before the ransomware and security and AI things we’re talking about.”

Of those 50 players in the data protection space, Cohesity is the fastest growing, Poonen said. Veritas, he said, is the third largest, while the fourth largest, IBM, is a strategic investor in Cohesity and uses Cohesity’s technology.

Poonen said that if he wants to change the market, Cohesity has to be the number one player, and that he has the M&A experience from his previous roles at VMware and SAP to make it so.

When Cohesity started looking at Veritas as a potential acquisition target, it found it an interesting company, Poonen said.

“They are owned by Carlisle, and were doing very well in marketing, extremely sticky,” he said. “In the data protection space, it’s hard to replace Veritas. We were doing well with our modern tech and so forth, but they were really strong internationally. Many of their patents and IP (intellectual property) was still there. We were able to come up with a deal that was very attractive where we’re going to acquire the data protection business of Veritas, the product called NetBackup.”

Poonen said Cohesity has an aggressive post-acquisition technology roadmap that, as an analogy, is like thinking of Veritas as a BMW and Cohesity as a Tesla.

“We’re going to have a console that’s common for both and have a very rich roadmap for both products so customers on both sides will get innovation,” he said. “But the powerhouse of innovation builds on what Cohesity brings to the picture. That’s why the new company, which is going to be called Cohesity, is going to having the speed and innovation of Cohesity combined with the scale of Veritas.”

Cohesity is about a $549 million company, and is growing about 30 percent with 10 percent free cash flow, but with Veritas becomes about a $2 billion business, Poonen said.

“The growth rate comes down a bit, but the profitability is significantly better, still very attractive,” he said. “So from the standpoint of Cohesity, we felt rather than go public, which we could have done on our own, let’s bulk up and go from number eight to number one. Number eight combined with number three makes us number one. It puts us in a much more profitable position. Our international business, I mean, we were majority U.S.-driven, but 45 percent plus of Veritas’ businesses is international, and they’ve got an incredible operation in countries that would take us years to get to.”

Combined, the new Cohesity will be a much bigger, more profitable, public company after the integration, and that’s the plan, Poonen said.

“The Veritas customer base is incredibly excited about the innovation we have planned,” he said. “Everything we’re doing in securing AI, the Veritas customers get to benefit from in a big way. For example, our Gaia [AI-powered search technology] should work for every Veritas NetBackup customer. A lot of the things that we’re doing in security—our DataHawk ransomware protection, our FortKnox cyber vault, and our cyber recovery orchestration—will work with them. When we put this together we’ll have twice the R&D team of our modern competitors. So this is all about innovation. Yes, we do get some scale benefit, but we will have a bigger engineering team than our modern competitors. So that gives us the power to be able to innovate faster and better.”

In the end, Cohesity with Veritas will be an AI-powered data security company with the scale to be an almost $2 billion company, and someday a $5 million iconic company like Palo Alto or Snowflake or even VMware, but that will require help from the channel, Poonen said.

“We need every one of you in the channel,” he said. “And the way I would message it to all of you is, if we can create a $2 billion business, a significant part of that is reselling opportunities through you. There’s probably one or two times that in professional services and consulting services opportunities for those of you who have consulting businesses, and then much of that is going to be in the cloud for you who are service providers.”

As Cohesity increases its global presence with Veritas, the opportunities for the channel grow even more, Poonen said.

“Whether you are a global or a U.S. only company, we are partner-centric,” he said. “I mean, I would say a channel-first company. Today we’re 100 percent through the channel, and we will continue that.”