Code42, the fast-growing provider of software that protects and recovers data on laptop and other devices, plans to discontinue its consumer business and focus on its business and education markets.
“The consumer business has not been growing,” CEO Joe Payne said in an interview. “We needed to focus on one or the other.”
Its consumer business accounts for about 10 percent of total revenue, which Code42 expects to top $100 million in revenue this year.
“We will transition consumers so they land on their feet,” Payne said. “We spent a lot of time considering how to transition out of this business. And we will honor all our contracts. Anybody who signed up for a subscription, we will serve them through that subscription. We’re going to exit slowly.”
Code42 will honor all existing “CrashPlan for Home” subscriptions, and will wind down support of CrashPlan for Home in October 2018.
Its consumer customers will be offered extended subscriptions and special discounts throughout the transition, as well as dedicated support to assist with the move to a new backup solution.
Code42 selected Carbonite as its referral partner for CrashPlan for Home customers, offering what it said will be “a seamless transition path for those looking for personal backup.”
Payne, 52, is a technology-marketing veteran who took over one of Minnesota’s fastest-growing software firms in 2015.
The company, which raised $85 million in venture capital two years ago, has doubled employment to more than 525 people, and has 55 job openings.
Code42 moved out of quarters in Riverplace on the east bank of the Mississippi River earlier this year into no-cubicle, spacious quarters in downtown Minneapolis in the refurbished 100 S. Washington building, once home to the former ReliaStar-ING insurance company.
The building was gutted and converted to one of that area’s premier spaces for technology firms. Code42 designed its own space last year, complete with a spacious kitchen, free drinks and food.
Code42, which secures data for more than 47,000 organizations worldwide, has experienced double-digit revenue increases in recent years.
“The exponential increase in cyberattacks and data breaches have driven businesses of all sizes to zero-in on protecting their growth,” Doug Cahill, a senior analyst covering cybersecurity at Enterprise Strategy Group, said in a prepared statement. “Code42’s decision to solely focus on business needs comes at a time when both small and large enterprises need to accelerate their investments in data protection and recovery.”
Code42 was founded 15 years ago to serve the consumer market.
But that business has shrunk to about 10 percent of the total mix, as institutional customers boomed.
Revenue from business has increased about 50 percent from business customers, Payne said.
Prominent customers include Adobe, Samsung, Juniper Networks, MIT, National Geographic and Jamba Juice, to name a few.
The company says six of the world’s largest tech companies use Code42 to protect their data, as do half the world’s 20-most popular brand names and seven of the eight Ivy League universities.
Code42 is owned by employees and institutional investors Accel Partners, JMI Equity, NEA and Split Rock Partners.