The $100 Million Revenue Club: Acronis

Take a look at the track record of Acronis Inc. Chief Executive Jason Donahue and one would guess that it will only be a matter of time before the Burlington, Mass., software company is acquired.

After all, Donahue, has been the CEO of three previous start-ups that have been acquired: ClearApp Inc., which was bought by Oracle Corp.; Meiosys Inc., bought by International Business Machines Corp.; and Ejasent Inc., bought by Veritas Software Corp.

But Donahue, who joined Acronis in the fall of 2008, seems to have other ideas for the nine-year-old company, which has 640 employees and had 2009 revenue exceeding $120 million. The company, which provides storage management and disaster recovery products, is “a business that could grow to $1 billion” in annual sales, said Donahue.

Donahue said that while the company has had discussions with some of the big players in the sector, he has not focused on building the types of relationships that can lead to an acquisition in a sector that includes such notable players as IBM, EMC Corp., Symantec Corp. and CA Inc. Rather, the focus is on building the “infrastructure and process” to scale the business, he said.

Whether that means an initial public offering remains to be seen, but it is worth noting that the only thing that Donahue declined to discuss during an interview was whether the company is considering going public. He would only say that Acronis is a “financially strong company with staying power.”

Company board member Scott Maxwell was a tad more open, saying there is no specific plan in place for the company to go public, “but that it’s a company that could go out at anytime.”

Maxwell helped lead Insight Venture Partners’ $11 million investment in Acronis in 2005. He then left Insight to start OpenView Partners, a Boston-based growth equity firm, which is not an investor in Acronis. He has, however, remained on the board of some of Insight’s investments, including Acronis.

“It’s a great fast-growth company that is quite profitable and continues to perform,” he said.

Acronis was started by Russian entrepreneurs who Insight’s team met through portfolio company Aelita Software Corp., which was sold to Quest Software Inc. for $115 million. Insight is the only venture investor in the company, and Donahue said there are no plans to raise additional capital. With roughly a third of its workforce focused on R&D, Acronis has been expanding its product offerings. For instance, it has rolled out a cloud computing product.

It also is seeking to grow internationally. Now serving 2.5 million customers in some 90 countries, it is looking to gain higher penetration rates in markets in Europe and in Asia. The company has had success recently in northern Europe and in Australia and New Zealand.

“We see upside with this company,” Donahue said. “We want to see it grow.”

The company, says Donahue, has found success by serving the lower end of the market: small and medium-sized business and consumers. It is a part of the market where IBM and EMC have a “harder time serving these customers,” especially in a profitable manner, he says.

Alan Dayley, a research director with Gartner Inc., said Acronis has become a strong competitor in the sector, especially against companies like CA and Symantec. He said Acronis has thrived by doing a relatively simple thing: Making its product easy to use.

“It’s their biggest competitive advantage,” he said.

The company, he says, could be a target for a larger company, but it also could go the route of fellow storage management company CommVault Systems Inc., which went public in 2006 and reported revenue of $234.5 million for the fiscal year ending in March 2009.

“CommVault became a stand-alone company and I think Acronis could do that as well,” Dayley said.