Datto’s CRO: Managing Four Growth Levers for MSPs
Within and across the IT channel, Chief Revenue Officers are on the rise. Not your typical VP of sales, the CRO role varies from company to company. The one common CRO theme across all businesses: C-suite influence that drives revenue growth.
That’s the case for Brooks Borcherding, CRO at Datto, which promotes business data protection to a fast-growing MSP partner base. Borcherding arrived at Datto in 2015, injecting a healthy dose of midmarket MSP experience into the company. “CRO is not a particularly common title,” Borcherding conceded during a recent ChannelE2E interview. “But it’s getting more common as C-suites identify the key elements that contribute to sales growth.”
Historically speaking, growth hasn’t been a problem for Datto. The privately held company is profitable and valued at more than $1 billion. Still, critics wonder if the ‘storage’ company can maintain its rapid growth selling purely through MSPs. CEO Austin McChord insists the company will remain “pure channel” — avoiding the temptation to sell direct to end-customers. Other advocates point out that Datto is more than a typical ‘storage’ company — with a growing portfolio of products and technologies in the pipeline.
Datto’s Four Growth Levers
The key priorities include managing four growth levers, Borcherding says. They are:
First, continuing to take market share — both in terms of first-time customers, and customers that are switching from other solutions. “Even if you consider us an SMB solution — and we’re more than that, by the way — only 15 percent have a backup and disaster recovery solution in place,” he says.
Second, there’s opportunity for geographic expansion. “Only in Q4 2015 did we really begin to penetrate Europe, Africa and Australia. We are just starting to ramp up international territories with our value. And we’ll continue the journey in South East Asia and Asia soon.”
Third, Datto can move up market. “Not that we don’t currently play in the midmarket and enterprise space,” he says. “We have enterprise-grade products but it’s more a matter of the MSPs we currently have, and the markets they serve. We are looking at the larger MSPs and cloud services providers as well.” As part of that journey, Datto will look to ink embedded partnerships as CSPs bring their business continuity solutions to market.
Also, Datto will have a “huge presence” at VMworld 2016, set for August in San Francisco. The VMworld presence will expose Datto’s brand to CIOs and IT directors. Does that mean the company wants to sell direct to those IT professionals? The answer is no, he says. Instead, Datto is looking to build brand recognition with corporate IT professionals, and then will route business leads to channel partners, Borcherding says. “We’re out to create brand awareness so that customers don’t say ‘Datto who?’ during an MSP discussion,” he adds.
The fourth growth opportunity involves product and market adjacencies. Indeed, the company is designing a router that’s purpose-built for MSPs. Over time, Datto will blend the worlds of storage, backup, network connectivity and bandwidth management. The router, dubbed Datto Network Appliance (DNA), was originally scheduled to ship in September 2015. But it was delayed to for WiFi and 4G capabilities, and to address other feedback from MSPs. It’s now expected to ship in June 2016, the company says.
Take a closer look at each of those four growth levers and they’re not unique to Datto. Instead, the levers will also help MSPs to grow — expanding their market share, geographic reach, business scale and reach across market adjacencies, the company believes.
Expanded Team, Focused Priorities
During Datto’s early years, the company was perhaps perceived to be a Millennial-driven business that flew by the seat of its pants. But CEO Austin McChord has expanded the staff, executive team and board of directors with a health mix of expertise that spans all generations — including investors and executive leaders who previously built VMware and Akamai, among other IT and data-driven giants.
“I give all the credit to Austin,” says Borcherding. “He’s a brilliant entrepreneur who has so far built a company valued at $1 billion — and yet he’s approachable, open to feedback, sincere and authentic. He has this desire to build a great culture that brings great value.”
Still, there’s no time for Datto to rest on its laurels. Competition looms around every corner. Looking ahead, “revenue growth is always top of mind,” Borcherding says. The company’s shift from “hardware sales and transactions” toward services and software provides more predictable pricing for partners. Content also is a big priority. “We’re very focused on how we represent ourselves on the web, and how we describe our differentiators.”
Indeed, Datto has pushed beyond classic backup and disaster recovery (BDR) conversations. Now, the focus involves protecting data no matter where it lives — and eliminating downtime from small business to the enterprise. Somewhere behind the scenes, Borcherding is carefully pulling on each of those four growth levers — for Datto’s sake, and for the sake of partners…