Business continuity, Channel partner programs, Midmarket, Networking, Storage

Veeam-Cisco vs. Datto: Business Continuity, Networking Showdown Looms

Datto and Veeam rank among the fastest growing providers of business continuity solutions. Both companies sell entirely through the channel, but their hardware, cloud & strategic alliance strategies are vastly different. Even amid those important business nuances, the companies are on a potential collision course -- both in the IT channel and in the midmarket business sector.

No doubt, both companies know how to attract a crowd. Thousands of Veeam partners and customers are attending this week's VeeamOn 2017 conference in New Orleans. And more than 1,000 MSPs are expected to gather at DattoCon17 next month in Denver.

Admittedly, the vast majority of channel partners and MSPs leverage more than one data protection solution to safeguard customer assets. But if you look at their respective product roadmaps and alliance strategies, it's clear Datto and Veeam will increasingly compete for partner and customer mindshare and market share.

Veeam: Past, Present, Future

Veeam got its start a decade ago promoting backup technology for VMware customers. The company aggressively expanded to support Microsoft Hyper-V environments. Now, the company is attempting to position itself as a business availability platform for multi-cloud and on-premises applications.

The results so far are impressive: Veeam expects to generate about $800 million in revenue this year, and hopes to hit $1.5 billion by 2020, company officials said this week at VeeamOn. All of that revenue involves partners rather than direct sales. There are 47,000 Veeam ProPartners -- but the two categories to watch are (1) 2,900 partners that now offer backup and disaster recovery in the cloud and (2) strategic alliances with partners like Cisco Systems, HP Enterprise, NetApp and Nutanix.

Among the interesting twists here: Veeam doesn't have its own cloud nor does it make its own hardware. Instead, the company focuses entirely on software -- and partners with CSPs and hardware giants. That's in stark contrast to Datto.

Datto: Past, Present, Future

Datto CEO Austin McChord launched the company in his parent's basement and quickly seized on an MSP market crisis and partner inflection point.

Back around 2011, Zenith Infotech had a big installed base of BDR (backup and disaster recovery) appliances across the MSP ecosystem. When Zenith Infotech imploded amid a debt crisis, Datto worked closely with Continuum, among others, to migrate customers toward new BDR solutions. (Continuum itself is a former Zenith business that gained momentum under new ownership and executive leadership in the late 2011 timeframe. Continuum now has its own BDR offering as well.)

Datto bet its entire business on MSPs, raised venture funding, attracted key boardroom leaders from companies like VMware and Xerox, and achieved a $1 billion valuation in 2015. The Datto business model involves hardware appliances that MSPs install and manage on behalf of customers. The data is backed up to Datto's own cloud. The company has also acquired its way into cloud-to-cloud backup.

But Datto's ambitions extend beyond storage, backup and disaster recovery. The company acquired Open Mesh Networking for WiFi and switching technology in January 2017, and also launched Unified Threat Management technology around the same time.

Datto vs. Veeam: The Collision

So, let's sum it up:

  • Datto is growing fast entirely through MSP partnerships. The company offers business continuity appliances, networking hardware, WiFi and UTM solutions tied to Datto's cloud.
  • Veeam is growing fast entirely through channel partnerships and strategic alliances. The company doesn't make hardware nor does it have a dedicated cloud. Instead the company partners with hardware companies (example: Cisco) and CSPs.

The big question: Whose business model will scale faster?

  • Veeam wants to work more closely with CSPs and strategic hardware/data center partners (i.e., Cisco) to take market share from enterprise vendors like Dell EMC, CommVault, MicroFocus and Veritas.
  • Datto wants to leverage MSPs in a march from the SMB into the midmarket -- while also extending into networking to counter Cisco Meraki. Yes, the same Cisco (you know the one) with whom Veeam works very closely.

Datto vs. Veeam: Greetings and Salutations

Is Veeam concerned about Datto or even aware of the company? At first glance I'm not sure. All roads ahead for Veeam lead to a showdown against Veritas and the other entrenched enterprise data protection companies. Still, I'll be asking Veeam executives about potential overlap with Datto over the next couple of days here at VeeamOn.

Meanwhile, it's a safe guess Datto is very aware of Veeam. After all, Datto's board/venture capitalists have VMware know-how -- so they're very aware of Veeam's original rise in the VMware sector.

As for partners, I suspect a thousand or so (perhaps more) are here this week at VeeamOn in New Orleans. And 1,000 MSPs (or more)  are expected to attend DattoCon17 next month in Denver. How many partners are attending both conferences? Hmmm...

Either way, a midmarket showdown for partners and their customers looms...

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.