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Autotask CEO Mark Cattini: Highly Selective Cloud Acquisitions Possible

Autotask’s Pat Burns
Autotask VP Pat Burns
Mark Cattini, SVP of field service, Salesforce

Autotask CEO Mark Cattini is pleased with the company's unified platform momentum along with the growth of the software company's individual products. Still, potential acquisitions are possible -- if they meet a select group of criteria, Cattini and VP Pat Burns told ChannelE2E today.

During an Autotask Community Live keynote today in Hollywood, Fla., Burns indicated that roughly 1,000 MSPs and IT services providers are on hand. Of those attendees, roughly 98 percent leverage the company's PSA; about 50 percent leverage Autotask Endpoint Management; and roughly 5 percent to 10 percent leverage Autotask Endpoint Backup and Workplace.

PSA, short for professional services automation, remains the "brains" of Autotask's unified business management platform for MSPs and IT service providers. Autotask Endpoint Management (AEM), an RMM (remote monitoring and management) platform, is like the nervous system reaching out to all types of devices. And additional services like Autotask Endpoint Backup (AEB) and Autotask Workplace (file sync and sharing) provide sell-through services that MSPs and IT services providers can offer to their end customers.

Recapping Autotask's Evolution

Autotask hired Cattini in 2010 to push the company beyond its PSA-centric U.S. base. Among his first moves: Selling off an ill-fated investment in VARStreet that pre-dated Cattini, and developing localized software to extend the company's footprint worldwide. The results have been impressive. I don't have exact revenue figures, but I suspect the company's revenues have grown from about $20 million around 2010 to more than $100 million by 2016 or early 2017 or so...

Cattini originally planned to stay out of the RMM market, but switched strategies in 2014 by acquiring CentraStage -- a fledgling cloud-based RMM platform. In some ways, the move emulated ConnectWise's 2010 investment in LabTech (now called ConnectWise Automate).

The RMM investments for both ConnectWise and Autotask have paid big dividends in different ways. In Autotask's case, the RMM base has grown 10-fold over the past three years or so -- though here again, I don't have exact numbers. And yes, I'll share some stats on ConnectWise during that company's IT Nation 2017 conference in November.

Endpoint Backup Reality Check

While Autotask overall has been growing, I gotta admit: I've been somewhat skeptical about the company's push into file sync and sharing, and endpoint backup. I consider file sync a commodity market that doesn't leave MSPs much room to differentiate beyond Box and Dropbox. And in terms of backup, the MSP market is saturated with options.

But perhaps my views are off the mark -- especially since Autotask's backup strategy leans most on PC and notebook endpoints, rather than server-oriented backup and restore. I asked Cattini and Burns how the various file sharing and backup efforts were going -- and I revealed my personal bias, wondering if they were underperforming the company's expectations.

Author: Autotask Senior VP Len DiCostanzo

Cattini and Burns politely but firmly pushed back on my viewpoint. The CentraStage acquisition was so overwhelmingly positive, they say, that it's easy to overlook the company's momentum in the file sync and endpoint backup markets.

Roughly 800 to 1,000 partners, for instance, now resell the company's endpoint backup service to customers, Cattini pointed out. He says Autotask's acquisitions and R&D in the file sync, sharing and endpoint backup sectors have performed exceptionally well.

Still, Cattini and Burns concede the company had to develop new sales motions to get those offerings to partners and end-customers. Generally speaking, PSA and RMM are "sell to" options for MSPs to consume, while the file sharing and backup offerings are "sell through" motions for MSPs to resell to end-customers. Amid those realities, Senior VP Len DiCostanzo developed a reseller channel for the sell-through offerings, and those efforts are now paying dividends, the company says.

More Acquisitions: Perhaps, But...

During his keynote, Cattini said Autotask is working on more R&D to help partners sell more services to end customers. And during our private briefing, he said the company is open to making acquisitions -- but only on three conditions. The targets, Cattini and Burns indicated, must have a:

  • 100 percent cloud model;
  • world-class architecture; and a
  • world class engineering team.

And naturally, the valuation has to be right. "There's no good price for a bad acquisition," quipped Burns.

Vista Equity Partners acquired Autotask in 2014. Two representatives from the private equity firm are here at the conference, presenting I believe. But I also wonder if those Vista Equity representatives are checking out any of the exhibitors for potential Autotask tuck-in acquisitions.

I'll be watching the trade show floor on Wednesday for clues. In the meantime, concludes Cattini: Autotask's business is "moving and growing at a really nice pace, in a thoughtful and profitable way."

Joe Panettieri

Joe Panettieri is co-founder & editorial director of MSSP Alert and ChannelE2E, the two leading news & analysis sites for managed service providers in the cybersecurity market.