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Autotask-Datto Merger Pursues SMB Managed, Cloud Services Market Dominance

The Autotask-Datto merger, expected to be announced Thursday, is about one thing and one thing only: The race to dominate SMB managed and cloud services -- leveraging MSPs as the delivery channel for those services.

Autotask brings RMM (remote monitoring and management), PSA (professional services automation) and endpoint backup services to the table. Datto brings data protection, business continuity, networking and unified threat management (UTM) capabilities to the table. Both businesses have MSP-centric cloud management dashboard.

At first glance, the Autotask-Datto business combination will compete with well-known MSP-centric technology players -- names like Continuum, ConnectWise, Kaseya and SolarWinds MSP. Competition with data protection players like Acronis, eFolder, Infrascale, StorageCraft and Veeam also will intensify.

SMB Cloud & Managed Services -- Exclusively From MSPs

But take a closer look and this deal goes beyond the usual MSP software slugfests. This truly is about the SMB market shift toward cloud and managed services -- delivered entirely by MSPs.

The early MSP market involved remote monitoring and management of PCs and servers. But now, it's all about safeguarding and optimizing customer assets. Together, Autotask and Datto could have an extremely strong story for MSPs. Those MSPs, in turn, could help SMB customers to gather, manage, store, safeguard, optimize and monetize data.

While Autotask's software helps MSPs with the underlying infrastructure management, Datto's software and appliances could help MSPs to optimize and protect all that customer data.

Autotask and Datto: The Challenges Ahead

Still, that story isn't entirely unique. Many rivals have MSP-centric models. Most are racing to help MSPs win more SMB business. And the challenge of integrating Autotask and Datto should not be underestimated.

It's my personal belief that mergers of equals don't work. One leader has to emerge. And a blended culture has to emerge. Quickly. I saw that hard lesson first-hand more than two decades ago, when SynOptics and Wellfleet merged to form Bay Networks -- in a bid to attack Cisco Systems. Bay Networks was a so-called merger of equals. And the deal tanked. Why? Because the company became internally focused... slowly debating how to piece together all the parts, while Cisco carpet bombed the market with new technologies from tuck-in acquisitions.

For Datto CEO Austin McChord, the road ahead will require (A) rapid decision making, (B) rapid course corrections when issues pop up, (C) and a commitment to doing what's best for MSPs -- even if those decisions sometimes rattle those within the halls of Autotask and Datto.

It won't be easy. Rivals will be waiting to pounce on every potential misstep. And there's one core piece of the puzzle missing. It involves more security-centric software and services, which arguably are the fastest-growing pieces of the SMB and MSP segment...

We'll share more thoughts if/when Datto and Autotask confirm the deal.

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.