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Amazon Plans to Buy CloudEndure to Offer Data Backup Services

Zacks Equity Research

Amazon AMZN is firing on all cylinders to bolster presence in the cloud computing space on the back of its strategic initiatives.

Reportedly, the company is planning to acquire Israel-based startup, CloudEndure, for $200 million.

Notably, the startup offers recovery services for cloud data which significantly helps in case of cyber attacks. Further, it provides continuous backup service which enables the companies to automate the data backup process.

The addition of such disaster-resilient services to the services portfolio of Amazon Web Services (“AWS”) is likely to strengthen the company’s key offerings. Moreover, the buyout will bolster the reliability of AWS services.

Cloud Backup Market Holds Promise

Growing proliferation of cloud services worldwide is a testament to the fact that the cloud industry is booming. Several small, medium and large companies are transferring their workloads and infrastructure to a cloud platform.

Meanwhile, crime and cyber attacks are taking place in an alarming rate in today’s world. These are resulting in misuse well as loss of massive amounts of data stored on a cloud platform.

This has created a strong demand for data recovery services from such disasters in order to avoid any kind of operational loss.

Per a report from HTF Market Intelligence, the global cloud backup market is expected to witness a CAGR of 23.4% between 2018 and 2025. Further, it is projected to hit $6.82 billion by 2025.

We believe if the speculated acquisition occurs, AWS will be able to rapidly penetrate this potential market. Further, disaster recovery services will help the company in attracting customers to its platform, in turn strengthening its clientele.

Consequently, this will aid in the revenue generation of AWS.

Amazon.com, Inc. Revenue (TTM)


Amazon.com, Inc. Revenue (TTM) | Amazon.com, Inc. Quote

Intensifying Competition

Growth opportunities in the global cloud backup market are attractive enough to lure other major cloud providers such as Microsoft MSFT, Alphabet’s GOOGL Google and Alibaba BABA, to name a few.

Microsoft’s Azure Security Centre offers advanced analytics and global threat intelligence services which help its cloud customers to pace with the cyber attacks. Moreover, its advanced security management services for hybrid cloud workloads are major positives.

Further, Google Cloud offers a wide range of products and services that have high availability features. These help the customer in the disaster recovery process.

Meanwhile, Alibaba Cloud’s hybrid backup and disaster recovery solutions which are equipped with automated mechanism, are also gaining traction in the market.

Nevertheless, Amazon’s latest move is likely to strengthen competitive position against the above-mentioned companies. Further, its growing focus on hybrid cloud architecture services will help it in gaining further momentum among the customers, which in turn will aid its cloud dominance.

Currently, Amazon carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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