Here's why Amazon would buy an obscure Israeli company that specializes in disaster recovery

  • The transaction is rumored by Israeli press to be valued at $200 million.
  • The deal would give Amazon CloudEndure's backup and migration technology capabilities.
  • Companies are increasingly looking for ways to easily back up all their data, including the information that runs their operations, in the event of a cyberattack like the WannaCry or NotPetya ransomware incidents in 2017.
Andy Jassy, Amazon AWS 
Source: CNBC
Andy Jassy, Amazon AWS 

Amazon is acquiring CloudEndure, a small Israeli start-up that offers backup services for cloud computing, for a reported $200 million, according to Israeli media.

In a statement posted Thursday to CloudEndure's website, and confirmed by Amazon, CloudEndure said the deal "expands our ability to deliver innovative and flexible migration, backup and disaster recovery" products.

Here's why the buy would make sense for Amazon, the world's leading cloud computing provider.

As attacks proliferate far beyond the reach of most companies' cybersecurity capabilities, many firms are looking to have greater "resilience" rather than merely trying to prevent attacks.

Resilience means having a good plan to recover lost data. This requires backing up tons of information, especially the data that is used to run critical corporate systems, which can be everything from payroll to factory machines to high-speed trading. Backing up data that fuels operations can be a surprisingly complex task, particularly when that data needs to be called up quickly to keep the business running.

This was the problem underpinning many of the operations and logistics breakdowns that occurred during 2017's WannaCry and NotPetya ransomware attacks. Ransomware is malware that freezes a company's access to critical data, unless they pay a fee to recover it. Sometimes, paying the fee doesn't help because the data has already been destroyed.

During these attacks, organizations including Britain's National Health Service, FedEx, shipping giant Maersk and drugmaker Merck all experienced major operational issues because they didn't have, or couldn't quickly access, backup data.

If Amazon added this kind of disaster-resilience service to AWS, it could help attract clients with a particular focus on security or those who were particularly spooked by these high-profile ransomware attacks.

CloudEndure also offers "continuous backup" services, which could allow companies to automate this backup process so it leaves little to chance should a major technology incident cut off access to data.

In addition, the start-up offers "cloud migration" services. Moving data between data centers that are owned by a company and cloud service providers can be particularly trying for staff that work with the data being moved.

Amazon has said it's investing more in its hybrid cloud architecture services, which cater to companies that still must maintain on-site data centers but also use cloud services.

CloudEndure's capabilities here could help Amazon serve this specific subset of clients, many of which are in the financial services sector.