MSP-centric technology provider Datto has hired John F. Abbot as CFO (chief financial officer). His background includes CFO positions at data center and telephony firms, and key investment banking roles at Goldman Sachs and Morgan Stanley.Related Update - September 29, 2020: Datto IPO Filing - 10 Financial Details to KnowJohn Abbot, CFO, Datto
In prepared statements, Datto CEO Tim Weller and Abbot reinforced the company's continued focuse on MSPs (managed IT services providers) that support small and midsize business (SMB) customers worldwide.The hire also stirs IPO (initial public offering) speculation around Datto, though it's unclear if or how the coronavirus outbreak will impact Wall Street's near-term appetite for initial public offerings.Datto, owned by Vista Equity Partners since 2017, did not mention IPO plans in the CFO announcement. But during a CEO transition to Tim Weller from Austin McChord in January 2019, McChord indicated that a potential IPO was part of the company's strategic plan within the next two years or so.More recently, ChannelE2E has heard chatter that the company may be exploring an IPO in the first half of 2020 -- ahead of the U.S. presidential election. Still, that process could also attract a strategic buyer for Datto (much in the way that Cisco acquired AppDynamics on the eve of that company's IPO in 2017), according to private equity firms watching the Connecticut-based technology provider.
Fast forward to present day. Datto has been recruiting financial talent that understands various SEC filing processes. And Abbot now arrives as CFO.In his role, "Abbot will work closely with Datto’s senior executive team and its board of directors, driving key processes and systems to enable the business to maintain close touch with MSPs, and he will oversee all global aspects of Datto’s financial and accounting operations," the company said in a statement.Abbot's previous roles include:
CFO of Cumulus Media Inc. (CMLS), an audio-first media and entertainment company, where as CFO he played a key role in the operational turnaround and financial restructuring of the business, Datto says.
CFO at Telx Holdings Inc., a provider of connectivity, co-location and cloud services in the data center industry. Digital Realty acquired Telx in 2015.
CFO at Insight Communications, a cable television, internet and telephone services company that Time Warner Cable acquired in 2011.
Earlier, Abbot spent more than a decade in the investment banking industry -- working for such firms as Goldman Sachs and Morgan Stanley.
Datto Names Abbot CFO: Executive Perspectives
In a prepared statement about the hiring, Datto CEO Tim Weller said:
“More than 80 percent of our MSP partners surveyed said recurring services are driving a large portion of their revenue. This corresponds to a shift in the MSP role from that of IT provider for SMBs to being their strategic partner. Datto views our MSPs in the same way and is scaling our platform and hiring the best talent to give MSPs the solutions and support they need. John’s deep financial and operational experience will help Datto in this exciting phase as we anticipate the needs of MSPs emerging worldwide.”
Added Abbot:
“This is a pivotal time for the Company and I’m excited to be joining Datto’s executive leadership team. Datto enjoys a unique and compelling position in the IT services space, and I am eager to contribute to the execution of its vision and be a part of the next phase of its evolution.”
MSP Technology: Market Competition
Datto's product and service portfolio includes MSP-focused data protection, business continuity, networking, business management and automation software. The company supports 16,000 MSPs worldwide. Those MSPs, in turn, support more than 1 million small and midsize businesses (SMBs) worldwide.In terms of installed base, the strongest piece of Datto's portfolio involves backup and disaster recovery (BDR) and various data protection solutions -- many of which assist MSPs before, during and after ransomware attacks. But the company certainly faces intense competition on multiple fronts.Private equity firms Thoma Bravo and Insight Partners, among others, own numerous MSP-focused technology firms that compete with Datto.
Emerging rivals include NinjaRMM and Atera in the IT automation market, and Cohesity, Druva and Rubrik and the cloud data protection market.
Of those companies, StorageCraft is reportedly exploring a company sale, and Kaseya reportedly expects to be publicly held by Q2 of 2021.What's next for Datto? Answers will surely emerge at the DattoCon 2020 conference -- scheduled for June 8-10 in Atlanta, Georgia.In the meantime, ChannelE2E has reached out to Datto for an official comment about the company's potential IPO ambitions. The company offered this statement via email:
"Datto’s focus is on building a great company for our partners, employees, and stakeholders. We're guided by this and are always considering new investment and capital opportunities that position us to better serve our partners now and to continue to advance the market into the future."
Translation: If Datto explores an IPO or strategic M&A, the partner focus will remain core to the company.
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.
