VMware veteran takes helm of pre-IPO software company Cohesity, though market debut is on hold

Cohesity, a startup selling software to back up corporate data, said Tuesday it hired former VMware operating chief Sanjay Poonen to be its next CEO, as the company challenges incumbents like Dell and marches toward an eventual IPO.

Poonen told CNBC that he received a call from Cohesity founder Mohit Aron, telling him that he planned to step aside as CEO after running the company for nine years, but he wanted to stick around to work on technology and engineering. Poonen had been largely on the sidelines since leaving VMware in 2021 after an eight-year run.

He joins Cohesity at a time when demand is soaring for modern backup systems, because companies are dealing with exponential increases in the size and complexity of their data. It’s also a challenging period, with the economy nearing a potential recession and many businesses cutting back on spending. Cohesity, which was valued at $2.5 billion in a 2020 financing round, filed confidentially for an IPO late last year, when the tech market was on a tear.

The mood has changed dramatically in 2022, and the market sell-off has resulted in much lower multiples for software makers both private and public.

“As a new-coming CEO, you don’t want to be in a frothy situation,” Poonen said. “It’s a great time to join, because there’s only upside going forward.”

He said there’s no specific timetable for a share sale for the company, which has more than 2,100 employees.

“No one knows the time,” he said. “We watch that carefully. Everyone’s in the same boat, evaluating what’s the right time.”

In Cohesity’s market, Dell, IBM and Veritas are the main incumbents. But there’s also a set of emerging companies built for the cloud era. In addition to Cohesity, that group includes Druva and Rubrik.

Poonen said he wants to see cloud partners such as Amazon Web Services directing their salespeople to introduce Cohesity to more organizations. If customers want to back up data from Microsoft, SAP or Salesforce software in clouds other than Amazon, they can do that with Cohesity, Poonen said.

“The profile of this company has not been at the highest level of the media, because they didn’t know much about it,” Poonen said. “Just my being here brings a lot more awareness to this company.”

Cohesity has attracted big-name investors including Amazon, Cisco, Hewlett Packard Enterprise and Sequoia Capital. When Amazon bought a stake in Cohesity last year, Poonen said, the approval came from Andy Jassy, who succeeded Jeff Bezos as CEO of the e-commerce and cloud giant in July 2021.

During Poonen’s tenure at VMware, he spoke at the virtualization software maker’s annual conferences and led sales, marketing and other functions. He said he aims to add clients by prioritizing customer success and building relationships with cloud providers and other partners, rather than just inflating the company’s marketing budget.

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