Datto Emphasizes Global MSP Momentum Ahead of DattoCon18
An ownership change. A merger. And some executive transitions. Amid those variables, the typical technology company may lose focus on its business, partners and customers. But that’s not the case at Datto, which points to strong anecdotal momentum with MSPs ahead of the company’s DattoCon18 conference in June.
Vista Equity Partners acquired Datto in October 2017. At the same time, the PE firm tucked another investment — Autotask — into Datto’s business. The combined businesses, led by Datto CEO Austin McChord, officially merged in December 2017.
“The integration is moving along and the energy is high,” Matthew Richards, interim chief marketing officer, tells ChannelE2E, though he’s careful not to hype the situation. “There are plenty of small and meaningful milestones. But we have to be super careful. In terms of M&A this isn’t our first rodeo. We want to be careful with partnerships and partners on both sides” of the Datto and Autotask equation, he says.
The goal: Deliver end-to-end MSP solutions, with each piece of the machine emerging as best-in-class. But also maintain an open ecosystem to allow ISVs and even rivals to plug into Datto’s architecture.
End-to-End MSP Solutions
The newly combined business has a lot of moving parts — in terms of technology, talent and worldwide reach. The company’s product portfolio includes data protection, backup and disaster recovery (BDR), networking, file sync and sharing, remote monitoring and management (RMM) and professional services automation (PSA).
Bringing all those technologies together under one roof requires a single executive team, free of redundancies that often plague M&A deals. With that reality in mind, Vista Equity Partners clearly communicated Autotask CEO Mark Cattini’s exit from the company when the deal was announced. (Cattini has since re-surfaced as CEO of ClickSoftware.)
Additional executives from both sides of the deal have also moved on. Datto emerged with a unified executive team earlier this year. Moreover, seveal key executives have moved into new positions, including Michael Fass as General Counsel and Chief People Officer; Tim Weller as CFO and COO; and Matthew Richards as interim Chief Marketing Officer.
Momentum & Milestones
Datto attracted roughly 2,900 new MSP partners into its portfolio during 2017. Monthly recurring revenue rose 36 percent, and the company’s Business Continuity and Disaster Recovery (BCDR) solutions experienced 33 percent growth, Datto indicated. The company now supports 13,000 MSPs. Those MSPs, in turn, support 500,000 small and midsize businesses (SMBs) worldwide, the company says.
Armed with those figures, Datto claims to be the “largest MSP-centric company in the world.” No doubt, Datto has serious momentum in the MSP sector. But some rivals will surely claim the MSP ecosystem crown as their own. For instance, ConnectWise and SolarWinds MSP both claim to support 20,000 MSP-centric partners. And entrenched rivals like Kaseya and Continuum also have growing partner bases.
Still, business models vary from company to company. SolarWinds MSP, after all, is part of the larger SolarWinds business — which stretches beyond the MSP ecosystem into corporate IT departments. And some ConnectWise products, like Sell and Control, are popular outside of the MSP and technology solutions provider sectors.
Datto’s Global Technology Puzzle
Datto added roughly 1,000 partners across EMEA (Europe, Middle East and Africa) Australia and New Zealand. In recent weeks, McChord and other leaders have been traveling worldwide to meet Datto and Autotask employees and partners, emphasizing product, marketing and sales strategies that will emerge.
The unified marketing and sales efforts are coming together. Both Datto and Autotask leveraged the same marketing automation platform ahead of the merger, Richards notes. Building coordinated campaigns and partner programs won’t require massive IT rip-and-replace efforts within Datto’s back-end systems.
Already, Datto has rolled out a formal referral program globally. Partners who refer new clients are eligible for a $1,000 referral bonus if their referral makes a purchase within six months of submission.
Next up, Datto will likely unlock additional value from Autotask on a global scale. Indeed, Autotask localized its cloud software for multiple regions several years ago under former CEO Mark Cattini. Overlap between the established Datto and Autotask partner bases in EMEA and Australia is particularly low, multiple sources say, which means Datto will likely use the Autotask global base as a springboard into more partner accounts, ChannelE2E believes.
Datto’s Engineering Puzzle
Meanwhile, deeper product integrations are on the way. McChord and Datto’s engineers have been living in Autotask’s products. It’s a safe bet Senior VP of Engineering Adam Stewart and VP of Product Management Pat Burns — both Autotask veterans who joined the Datto executive team — have immersed themselves in Datto’s products.
Already, Datto has pulled back the curtain a bit on an Autotask Endpoint Management update. Dubbed the “Reporting Release”, this update includes a new flexible report scheduler and improvements to how partners produce professional and accurate end-client reports. The release also includes updates to other areas of the product including Patch Management, Anti-Virus Management and a dramatic improvement in ticket creation through the unification with Autotask PSA, Datto asserts.
In addition to those familiar executive names and products, new recruits are on the way. The company expects to hire more than 100 net new employees this year across both North America and the UK. Many of the positions are now advertised on Datto’s website.
DattoCon 18 Approaches: Amid Datto’s day-to-day R&D and partner priorities, the company also is gearing up for DattoCon18 in June. In addition to featuring Datto-centric content, it will also feature educational content from Autotask Community Live (ACL). The ACL conference originally was scheduled for September 2018, but Datto earlier this year realized a single, combined conference — hosted at DattoCon18 — would better serve partners that are seeking to understand the company’s complete product portfolio on product strategy.
Overall, it sounds like the Datto-Autotask business combination is proceeding as planned. Still, it’s early in the integration game. Though growing and profitable, Datto doesn’t share actual revenue or profit figures — so it’s difficult to say exactly how well the company is performing overall.
No doubt, competition from entrenched rivals — ConnectWise, Continuum, Kaseya, SolarWinds MSP, etc. — continues. But we’re also watching multiple upstarts and potential disrupters in the market. ConnectWise, for one, works with multiple BDR companies but essentially positioned Infrascale as a most favorite nation in November 2017. Kaseya today branched out from its Acronis relationship to embrace Unitrends MSP for an additional BDR service. And eFolder is piecing together a more formalized partner program strategy, led by Ingram Micro veteran Jason Bystrak.
Meanwhile, data protection specialists like Veeam, Druva and Rubrik are growing rapidly in the cloud and enterprise markets — but could soon focus more attention on the MSP sector. The same could be true for a range of security-centric companies that are moving toward the storage market. And don’t forget about public clouds, which could give Datto’s homegrown cloud a run for its money over the long haul.
Not that Datto is standing still. We sense that a few surprises will come together in time for DattoCon — or sooner. In the meantime, Datto points to those numerous 2017 milestones, which plenty of IT companies would surely envy.