Datto CEO Tim Weller – The Interview: MSPs, Private Equity and More
As DattoCon19 kicks off today in San Diego, it will be a prime opportunity for MSPs (managed IT services providers) to take a closer look at CEO Tim Weller’s management style at the data protection, networking, business management software, and automation technology provider. It will also be a key opportunity to hear his views on the MSP market’s health, evolution, private equity and plenty more.
Weller was named CEO of Datto in January 2019, succeeding founder Austin McChord at the Connecticut-based technology company. The transition has been a smooth one, particularly because Weller has been running Datto’s day-to-day operations for quite some time.
Amid all the M&A activity in the MSP technology market, ChannelE2E traded email with Weller in March 2019 — probing his mind for thoughts about Datto’s business, private equity, the MSP industry and more. For the first time, here’s the complete conversation. Again, keep in mind that our email exchange occurred in March 2019. We timed the content’s release for a timely opportunity to put the info front-and-center — like today’s start of DattoCon19. Here you go…
Datto CEO Tim Weller: On the Record
ChannelE2E: How are you settling in as CEO? Any surprises about the job so far, or pretty much what you expected?
Weller: I’ve been with Datto for almost two years, so I had a pretty stable foundation heading into the role, but the transition has been exciting. Shifting into the CEO role has meant more travel to see our employees and partners around the globe and working beyond the go-to-market and operational areas that I led in my previous role. Each day, I try to put on the hat of an MSP and look at Datto from the outside-in to see where we can improve. We really want to unify our partner experience to save them time. On a personal note, I want to thank our employees and partners…they’ve been so welcoming.
ChannelE2E: Looking back on Vista acquiring Datto, were there any key learnings from the first few months of private equity ownership? Big shift for the Datto executive team, or was it mostly small adjustments to align with private equity ownership?
Weller: Vista has been a great partner for us in that they provide us with the benefit of best practices through interaction with other tech leaders, broad consulting resources and more. They also understand the uniqueness of our model and the MSP community, so the Datto culture won’t change. The 15 months since their investment has gone by quickly. It’s a track record that can be judged publicly. We continue to grow with the channel and are still totally MSP-centric.
ChannelE2E: A lot of readers are asking ChannelE2E, “What comes after all this private equity?” My short answer typically involves (A) another round of private equity or (B) a strategic buyer or (C) an IPO. Any thoughts on the broader market in terms of what types of companies may emerge as owners or investors?
Weller: My career has shifted between technology and finance, so I’ve been lucky to see those two interact for many years. Private equity is smart money. They have discovered that MSPs are the future of SMB technology services. It’s $1T of opportunity, and growing twice as fast as direct channels. Each private equity firm is different, and we found that Vista understood the channel best and was investing for the right reasons. As for what happens next – I think it’s still early and we will have to wait and see how the other investments play out. Judge each company and their backers on how they deliver for the partner community. On a related note, we’re even seeing some institutional funding for larger MSPs themselves. Something to watch along with MSP consolidation.
ChannelE2E: So, we’re down to the big five (Datto, ConnectWise, Continuum, Kaseya, SolarWinds) and quite a few upstarts (NinjaRMM, etc.) and potential movers in the market (Barracuda, Carbonite etc.). When an MSP asks what makes Datto unique these days, what’s your answer?
Weller: Well, you know we’re 100% committed to MSPs. Every employee comes to work in the morning to make MSPs’ lives better. This makes my job easy because we have 1500 people ready to help without being told to do so. This ethos and the desire to create technology are the core of the Datto culture–something that began with Austin. It took a decade of commitment to build. There are no shortcuts. Others augment their MSP revenue with direct and VAR channels. We keep it simple. We build technology for MSPs and help them grow their businesses.
ChannelE2E – What did I miss?: Any key themes or market issues that the media (myself included) is failing to cover in the MSP space or broader IT/business market? I’m all ears.
Weller: Security, the Internet of Things, artificial intelligence and data regulation are some of the new opportunities—and challenges-for MSPs in coming years. We want MSPs to look forward to how they can evolve with technology – how they can improve their delivery and utilize new technology to do so. These themes are going to dominate the industry. MSPs of the future will be tasked with a long list of deliverables for their clients. It’s important to charge recurring fees to be profitable in this world. But it starts and ends with great service for your customer. Our mission is to help MSPs do this more effectively and efficiently for SMBs.
Next Up: Live Coverage From DattoCon19
ChannelE2E is set to meet Weller and many members of Datto’s executive team this week at DattoCon19 in San Diego. Check our ongong DattoCon news, analysis and rumor coverage here for ongoing updates.