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After the Datto IPO: Memo From CEO Tim Weller to MSPs


After a successful IPO (initial public offering) earlier today, Datto is now a publicly held company. But Datto's core focus on MSPs (managed IT services providers) remains unchanged, CEO Tim Weller tells ChannelE2E.

Tim Weller, CEO, Datto
Tim Weller, CEO, Datto

"I reject the thesis that being a public company makes you different" in terms of Datto's focus and priorities, Weller politely says.

How can Weller prove that assertion? He points to Datto's track record over the past decade. Regardless of the company's financial backers or business stage -- from angel investors to private equity and venture capitalists -- Datto has always remained focused on managed IT services providers (MSPs) as partners, Weller asserts. Shifting to public market ownership doesn't shift the core focus of the business, he says.

Instead of making profits the absolute top priority, Datto will continue to focus on long-term business building and relationships with MSPs because "we're in an early period of a massive growth opportunity," Weller says.

Datto's Journey: A Lesson for SaaS Startups Focused on MSPs

Datto founder Austin McChord,

Admittedly, Datto has grown dramatically since founder Austin McChord launched the business in his parents' basement in 2007. From 100 employees and 1,000 partners in 2012, the company now stands at 17,000 MSP partners and 1,600 employees worldwide.

Meanwhile, dozens of SaaS-focused startups are now pursuing MSP partners in the SMB (small and midsize business) sector. Amid that reality, ChannelE2E asked Weller what advice he'd offer to SaaS startups that are seeking funding and looking to go on a long-term journey with MSPs.

Weller's reply: "Choose your investors carefully. Austin kept to a tight circle for a number of years. The mission has always been -- and will always be -- about the MSPs rather than the VCs. When VCs and private equity got involved with Datto, we found the right investors who were aligned with our culture and our commitment to growing with MSPs."

Married to MSPs: Regardless of the Economy

That focus on MSPs needs to remain unwavering -- even during tough economic markets, Weller adds. "We have a firm belief at Datto that we're all in this together -- with the MSP industry. Our growth runs parallel to the industry's growth."

For those keeping a one-day score: Datto shares ($MSP) rose 6.28 percent during their first day of trading. The company's valuation is roughly $4 billion. Looking ahead, Datto's quarterly financial reports should give rivals and startups a benchmark from which to measure their own performance.

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.