Data protection juggernaut Datto and Autotask are becoming one company. And that's suddenly put Datto's longtime partnership with ConnectWise – an Autotask competitor – under the microscope.
MSPs who partner with ConnectWise but rely on Datto for its backup, networking and disaster recovery solutions quickly wondered how the deal might affect their businesses. ConnectWise CEO Arnie Bellini said in a November interview with CRN that his company would always be open to Datto integration but added that it would be "interesting to see how things progress."
"We're trying to make it business as usual as much as possible," said Datto CMO Pete Rawlinson. "So far, (ConnectWise's) reaction to this deal has been very positive. We already had integrations to the main PSA [professional services automation] vendors before this announcement. Our philosophy isn't going to change at all … There's enough opportunity in the market for us to take an open approach and still provide value to MSPs."
Partners who spoke with CRN agreed that Datto teaming up with Autotask shouldn't significantly affect its ConnectWise partnership. Allen Falcon, CEO of Westborough, Mass.-based Datto partner Cumulus Global, said the data protection vendor had told solution providers that ConnectWise remains a "critical innovation partner." He also believes the Autotask deal will create synergies for his company and other channel partners.
"You don't necessarily want to disrupt your partnership with the market leader, even though you're now owned by the company [Vista Equity Partners] that owns one of their competitors [Autotask]," Falcon said. "I think we'll see more of these types of mergers where the platform providers are moving more toward the role that distribution has traditionally played in the channel."
"There's the possibility of all three of those working in perfect harmony," said Anchor Network Solutions CEO Vince Tinnirello.
Tinnirello is a longtime Datto and Autotask partner who is on both companies' partner advisory boards.
"If you're a ConnectWise partner that only uses the networking product, you might not get integration at that level, but you're going to get integration," he said.
In 2018, Rawlinson said MSPs could expect to tap into cross-selling opportunities from the merged firms as soon as January. The company, which will retain the Datto brand, is meeting Friday to lay out the go-to-market strategy around its PSA, RMM, and BCDR solutions, in hopes that partners can take advantage of a combined offering quickly.
Rawlinson added that decisions regarding how the combined marketing team would brand products, such as Autotask's PSA platform, would be made throughout next year. He said partners would not see Autotask "being subsumed" by the Datto brand.
"We're not combining websites or eliminating the Autotask brand anytime soon," Rawlinson said. "We really want to see as we progress our go-to-market plan and we see reaction from MSPs, that'll guide how we combine these brands over time. There is enough opportunity for us not to need to make that decision through the course of 2018 probably."
Tinnirello said branding the combined company as Datto makes sense, but hopes the Autotask remains prominently placed when it comes to its product lines – such as "Autotask powered by Datto" or "Autotask PSA by Datto."
In addition to existing offerings, Datto intends to prioritize product innovation with the additions of Autotask Vice President of Product Management Patrick Burns and Senior Vice President of Engineering Adam Stewart to its seven-person executive team. Burns and Stewart will report directly to CEO Austin McChord, whom Rawlinson said are intrigued by the innovation potential created through the merger.
The combined engineering power of Datto and Autotask give the MSP powerhouse several avenues to explore, Rawlinson said, although he thinks that will be a gradual process.
Networking would be one such possibility. Datto acquired cloud-based networking provider Open Mesh in January, opening the door to a wide swath of managed networking services meant to compete with the likes of Cisco Meraki and SonicWall, and Rawlinson said MSP reception to those offerings has been overwhelmingly positive.
"We've exceeded our goals this year," he said. "The device sales have been significant across the board in terms of MSP size, geography. There are a lot of greenfield opportunities, more around replacing an incumbent than bringing it new to an MSP. We're setting lofty goals for that next year, including integrating it more closely to our partner portal."
On top of the potential for product evolution, Tinnirello highlighted new Datto owners Vista Equity Partners as another potential boon for partners. He said Vista, which acquired Autotask in 2014, has enabled the IT management vendor to invest significant resources on the product side or acquire new ones – such as Autotask Endpoint Management via the company's purchase of CentraStage.
"That's really impressive, and as a partner it's given me other opportunities," Tinnirello said.
Falcons expects the channel will see more consolidation among managed services vendors. As the evolution of cloud and IoT makes IT, management more complex he said customers are looking for broader self-service options and partners are aiming to simplify and optimize their own operations. The continued influx of private equity players like Vista into the IT space will not slow that process, either.
"If the platform you run your business on lets you market, sell, provision, support and manage the services you sell, then that's an advantage. If they're also wholesaling those services to you, that can be an additional advantage. It'll be interesting to see who else partners up, so to speak," Falcon said.