Microsoft Corp. has bought a stake in data protection unicorn Rubrik Inc. as part of a new collaboration that will see them work together to help enterprises protect their systems against ransomware.

The collaboration expands upon an existing, long-running partnership between the two companies. 

Rubrik didn’t disclose the size of Microsoft’s investment in its announcement of the collaboration today. However, sources told Bloomberg that the technology giant invested a sum in the low tens of millions of dollars. They added that the transaction values Rubrik at about $4 billion.

Microsoft’s investment may be good news for existing Rubrik stakeholders. Rubrik was valued at $3.3 billion after its most recent funding round in 2019, which means that, at the reported new valuation of about $4 billion, existing stakeholders’ shares could be worth more than they were before. Rubrik’s investors include big names from the venture capital ecosystem such as Bain Capital Ventures, Lightspeed Venture Partners and Khosla Ventures.

The data protection startup said that it will use the capital provided by Microsoft to pursue joint engineering projects with the tech giant. The projects will have two main priorities. The first is to help companies more effectively protect data they keep in the Microsoft 365 product bundle, which includes the Office suite of productivity applications. The other priority is supporting enterprises that are using Microsoft’s Azure public cloud to back up mission-critical workloads such as their SAP SE applications and Oracle Corp. databases.

Palo Alto, California-based Rubrik provides popular data protection products that enterprises use to ensure business records can be recovered if they’re lost because of a technical issue or a ransomware attack. Rubrik enables customers to keep backup copies of their records in the cloud for easy access. The company’s products implement an approach known as zero-trust data management to ensure ransomware attacks don’t compromise the backup copies of enterprises’ information.

The foundation of Rubrik’s zero-trust feature set is a system it calls DataGuardian. The system provides the ability to store backups in an immutable format, meaning the files can’t be deleted or edited. Removing the ability to modify backups makes it impossible for ransomware to encrypt them, which means companies can more easily restore information lost in cyberattacks.

DataGuardian takes other precautions as well to ensure companies can recover business records. The system ensures backups can’t be discovered or accessed over open networking protocols by hackers who breach an organization’s technology environment. Additionally, DataGuardian limits the data access permissions of authorized users such as administrators who interact with backups as part of their work.

“As the pioneer of Zero Trust Data Management, Rubrik is helping the world’s leading organizations manage their data and recover from ransomware,” said Rubrik co-founder and Chief Executive Officer Bipul Sinha (pictured). “Together with Microsoft, we are delivering tightly integrated data protection while accelerating and simplifying our customer’s journey to the cloud.”

Rubrik has long provided features that allow customers of its data protection products to back up information from Microsoft 365. It also enables companies to use Azure as an environment for hosting backups of records from mission-critical systems such as Oracle databases, SAP applications and VMware Inc. workloads.

The collaboration with Microsoft announced today is set to place a particular emphasis on Azure data protection use cases. “Working with Microsoft, Rubrik will help customers address these priorities while providing agility to migrate data to the cloud and achieve improved productivity and optimize resources,” the company said in a statement. 

Rubrik disclosed that it has currently more than 2,000 mutual customers with Microsoft across more than a half-dozen market segments. Those customers represent a fairly large market that the companies could target in future with any new features they may develop as part of the collaboration.

It’s not unusual for large tech firms to invest in partners. Salesforce.com Inc.’s venture capital arm frequently joins funding rounds for startups with products that are built atop its software-as-as-service platforms or integrate with them. Intel Corp., through its Intel Capital fund, similarly invests in startups developing new ways of putting its chips to use.

Photo: Rubrik