Datto Founder Austin McChord Blasts Kaseya For Post Acquisition Changes: ‘This Sucks’

“It feels like you just bought a leading football team and are in the process of breaking all the players legs,” wrote Datto founder and former CEO Austin McChord. “This is not a winning strategy. It will hurt the entire MSP industry.”

Datto founder and former CEO Austin McChord has accused Kaseya of destroying the Datto culture in a blistering diatribe that claims post acquisition changes are damaging the one time MSP high flyer.

“This sucks,” wrote McChord in the GitHub post which also appeared on LinkedIn. “It feels like you just bought a leading football team and are in the process of breaking all the players legs. This is not a winning strategy. It will hurt the entire MSP industry.”

McChord’s post comes just 16 days after Kaseya completed its $6.2 billion acquisition of Datto. The blockbuster deal has been criticized by some MSPs who feel that Kaseya will not provide the same high-level partnership and support of MSPs as Datto did.

[RELATED: Kaseya Closes The Datto Acquisition: 6 Things To Know]

CRN reached out to Kaseya and McChord for comment but had not heard back at press time. McChord was a member of the Datto board of directors that approved the Kaseya acquisition of Datto.

Additionally, McChord was on the Datto transaction committee that evaluated several acquisition offers from private equity companies. The Datto board was disbanded on June 23 when the acquisition closed.

Kaseya CEO Fred Voccola has repeatedly told CRN he is firmly committed to investing in Datto’s strong channel culture, product set and brand.

“We’re spending $6.2 billion to buy an awesome company,” he told CRN in an interview in April in the wake of the deal .“The last thing that we want to do is make it unawesome. When we buy companies, we buy them for a reason. They’re great. We don’t [mess] with the culture and we don’t change the brand.”

Why McChord Is Speaking Out

McChord, who founded Datto in 2007 as a college student working in his family’s basement and stepped aside four years ago, said that he decided to speak out after “many members” of the Datto team reached out “deeply dismayed” by the Kaseya changes. “There is a concern that the current trajectory from Datto’s new owners will snuff the flame that makes Datto a place to come ‘Do your life’s work,’” he wrote.

Cautioning that he is no longer associated with the company and that the information he is receiving is “second hand,” McChord pointed to benefit changes that include reducing 401K match from 4.5 percent to zero percent; maternity leave from 16 weeks to three weeks, and a reduction in vacation/PTO.

Furthermore, McChord cited what he called a move to sideline “employee resource groups that support under represented people at the company” and not treating the office as a “hub for community anymore: ‘No more hanging out in the office.’”

Finally, McChord claimed that Kaseya is “looking for long term changes to budgets with decreases in excess” of 30 percent.

“The method in which these changes have been introduced has done more damage than necessary,” wrote McChord. “Communication has been heavy handed and those who have questioned it or expressed dismay have been simply overrun at best or summarily terminated at worst. These departures have induced a ton of unnecessary fear into the workplace. Employees are afraid to voice their opinions and give feedback. All of this is causing many incredible people who work at Datto to look for the exits.”

McChord To Kaseya Management: ‘Stop And Listen’

McChord noted that prior to the acquisition Datto posted its best quarter ever and was “accelerating” while generating “meaningful returns” to the bottom line. “To make this happen it took a team of 2,200 plus diverse, committed and brilliant people around the world delivering great product for MSPs,” he wrote. “This team and the culture that bonds them together is the secret to Datto’s success. More than any price point or technology. Losing this team will spell certain demise for business long term.”

McChord directly addressed the management team at Kaseya in the post with the plea: “Take a beat. Stop and listen. There was a saying in Datto new hire training that “Datto is not your last company. Things are different here.”

Datto is different than other Kaseya acquisitions, said McChord. “Its differentness is what makes it successful, not what holds it back,” he wrote. “You have an incredible opportunity to be the engine that takes the entire MSP industry to a whole new level. You have purchased a unique asset that can bring you (yes you Kaseya!), like all its prior owners, incredible financial return. The way to get those returns and continue the upward trajectory for everyone in the MSP space is to listen and support Datto’s differences, rather than destroy them”

MSPs React

Jason Wright, CEO of Avatar Computer Solutions, Houston, Texas, which uses both Kaseya and Datto MSP platforms, said the McChord post “confirms the worst fears” of MSPs.

“This confirms the worst fears of all Datto MSPs that Kaseya is going to dilute the strong Datto channel culture,” he said. “I hope Kaseya reverses course on these changes- which may have been made in haste - in the wake of Austin’s comments. If Kaseya bungles this acquisition it is going to harm them more than anyone else. I am sure they want this deal to be successful. It is shocking to see McChord speak out like this. This is going to reverberate throughout the MSP community and have big long term implications for Kaseya, Datto and McChord.”

David Stinner, CEO of US itek, a Buffalo, N.Y.-based MSP, defended Kaseya as a “visionary leader” in the MSP industry that is reshaping the MSP landscape by bringing Datto under the Kaseya umbrella.

“I don’t use Datto and I don’t know Austin McChord, but I think it is childish for him to think that change is not going to happen post acquisition,” he said. “When Thoma Bravo bought ConnectWise they cut benefits. It is unfair to criticize changes that need to be made because of the increased debt service by a higher than necessary negotiated price that Kaseya incurred when all other buyers backed out. This is an outcome of Austin McChord’s own doing by urging Kaseya to bid up its price. For McChord to complain about this deal is uncalled for. He created some of the situation by driving up the bid for Datto when all other buyers backed out. Austin McChord should take a look into the mirror as he is counting all of his profits from the deal. This is clickbait. Austin McChord is riling up MSPs when there is no story here. The true story is the integration and improvements that are going to happen with the two MSP companies being combined.”