NICTA cloud spinoff Yuruware bought by US firm


news Troubled research group National ICT Australia last week revealed one of its spinoff companies, cloud disaster recovery group Yuruware, had been purchased by US data protection company Unitrends for an amount reported to be at least $10 million.

With Yuruware’s cloud disaster recovery technology, developed over four years at NICTA, Unitrends plans to extend its core backup and disaster recovery offerings to third-party public clouds such as AWS, OpenStack and Microsoft Azure. The move will allow customers to protect physical, virtual and converged systems in hybrid clouds, and to quickly recover their IT infrastructure in multiple environments as well, according to a statement issued by Unitrends.

The acquisition means that Unitrends will now establish an Australian R&D office which will house up to ten staff – some from Yuruware, along with new recruits – with potential for further growth. The reported amount of the acquisition was at least $10 million.

Anna Liu was Yuruware’s chief technology officer and also co-leader of NICTA’s software systems research group. She will now head up Unitrends’ Australian operation as its general manager.

“Unitrends is the perfect partner for Yuruware in developing and launching the next generation of cloud products to the global market. We are proud of the innovation we have created to date with home grown talent, and we are excited about the growth potential with the global commercial experience from Unitrends,” said Liu.

“Our mission is to adapt data protection to our customers’ environments rather than force customers to conform to our offerings,” said Mark Campbell, chief strategy and technology officer at Unitrends. “Yuruware’s patented intellectual property, which enables us to offer customers the ultimate flexibility in data protection, is the latest example of our unwavering commitment to this philosophy.”

“Unitrends’ acquisition of Yuruware is not only an investment in Australian talent, but an endorsement of the innovation NICTA represents,” said Hugh Durrant-Whyte, CEO of NICTA. “This patent-protected technology connects different clouds and is a huge growth area for Australian businesses. The combination of NICTA’s research and development expertise and Unitrends’ 25 years of experience in the data protection industry is a perfect match. We look forward to following the continued success of Yuruware’s technology across the globe.”

New South Wales Deputy Premier and Minister for Trade and Investment Andrew Stoner said:

“This is another fantastic endorsement of Sydney and New South Wales’ global reputation as a leading hub for digital innovation and research, and as the best place in Australia for technology start-up businesses. In fact, around 64 per cent of all technology start-ups in Australia are based in Sydney.”

“This is also another milestone success for NICTA in which the NSW Government invests significantly each year. NSW supports the development of NICTA’s expertise and capabilities for the benefit of the state and the rest of Australia through solving complex problems for industry and government.”

Mike Coney, president and CEO of Unitrends, said: “Our incredible growth in the mid-market has been fueled by our easy-to-use, unified data protection offering, as well as our outstanding customer support. This acquisition is a continuation of that strategy. Over the next few months, you’ll see an aggressive investment from Unitrends in big, public clouds, in addition to our long-standing commitment to our own private cloud offerings.”

The news comes as NICTA has been struggling with its funding situation.

NICTA claims to be Australia’s largest organisation devoted to ICT research. Founded in 2002 under the then-Howard administration, focuses both on foundational ICT research as well as spinning off that research into startup companies and licensing the technology it develops. In its time, according to its website, the group has created 11 new companies, collaborated on joint projects with a range of ICT industries, developed a substantial technology and intellectual property portfolio and built a substantial PhD program. NICTA has more than 700 people across five laboratories around the nation.

However, the Coalition has long viewed the organisation as being better funded through its own efforts and cut off its funding completely in the 2014 Federal Budget. It has started approaching alternative organisations for replacement funding, and has found a small degree of success with Telstra.

This sale does much to demonstrate why I don’t think NICTA needs to be funded by the Federal Government. We’re looking at a small sale of a small startup to a US-based business. NICTA must have been backing this one for a while, but it doesn’t look as though the company had developed significant intellectual property, or that it was able to scale that IP up into a solid product and customer base, or else the purchase price would have been larger.

I suspect that the private sector probably wouldn’t have backed Yuruware the way NICTA did. But with public funding, NICTA hasn’t had to play strictly by the dictates of the commercial market. It probably made some ROI from Yuruware, but I’m betting not that much — and I’m also betting that the private sector would have backed away from this startup a bit sooner — or perhaps pushed it harder to succeed.

Don’t get me wrong — this is still a successful exit for an Australian startup and it represents a cause for celebration for Yuruware’s team and investors. But it’s not a huge success for anyone concerned. It’s a bit too typical of the Australian model — develop decent technology, then sell it off to the Yanks so they can build it big and really make some money off it.