MSPs On Kaseya-Datto Deal: ‘A Big Win All Around’

‘The tools we use from Kaseya and Datto are more important than ever. And now we don’t have to choose from one vendor or the other. It’s a big win all around. You just need to ride the change window and focus on the business because this is going to be a growth thing for us,’ says Phillip Walker, customer advocate CEO at Network Solutions Provider.

After seeing the long-awaited details surrounding Kaseya’s acquisition of rival Datto, some MSPs told CRN they are optimistic the deal will help grow the industry and their business.

Kaseya Thursday closed its $6.2 billion acquisition of Datto and in the process reinforced Kaseya’s role as the top provider of technology and business tools to the MSP community.

These MSPs told CRN the closing of the acquisition and comments from Kaseya executives at this week’s Kaseya Connect IT conference in Las Vegas as well as from CEO Fred Voccola in an exclusive CRN interview cemented their belief that the deal will be good for them and their customers.

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

It’s a far cry the fears many MSPs expressed in April when word of the then-planned acquisition was first officially released.

At the time, many MSPs who partnered with Datto expressed concern that Kaseya would not provide the same high-level partnership and channel-friendly experience they had grown accustomed to and were worried about changes in account teams and in the Datto people they had grown to depend on. That concern particularly included Rob Rae, Datto’s senior vice president of business development and one of the most recognizable faces at MSP conferences across the country, and Ryan Weeks, Datto’s chief information security officer, both of whom are staying with the company.

Voccola told CRN that those fears were overblown.

“Every tool that’s available is in place to make sure our second-most important asset we have, our people, are there to take care of the most important asset we have, which is our customers,” he said. “So retaining key employees is a huge, huge aspect of this transaction, particularly people who interact with customers and deliver the world-class customer service that Datto has been known for.”

MSPs Have Gotten The Message

It’s an exciting time, said Dave Seibert, CIO of IT Innovators, an Irvine, Calif.-based MSP that works with both Kaseya and Datto as well as with their chief rival ConnectWise.

“From the partner point of view, I see the energy, the momentum, and the sincerity of what Kaseya is doing with Datto,” Seibert told CRN. “And I see the vision of what they are doing.”

Kaseya was smart in its move to keep the Datto team intact, including Rae and Weeks, as well in its plan to not only keep all its account managers from both sides but to hire an additional 1,000 account managers by year-end, Seibert said.

“I was surprised to see Kaseya say it wants to hire 1,000 more account managers,” he said. “One thousand. Wow. But it goes with the strategy Fred [Voccola] talked about on stage. He said the cost of acquiring a new client, as well as the time needed, is higher than selling the existing solutions stack to existing customers. So it makes sense for him to hire 1,000 more account managers.”

With all the existing Kaseya and Datto offerings under the same company, those new account managers will be busy bringing new offerings to their existing customers even as they look to expand into new customers, Seibert said.

Kaseya illustrated that potential with the badges it gave out during the Connect IT conference, Seibert said. Those badges included a list of every Kaseya product and solution, and the conference team checked off which ones the MSPs were already selling so they could see what they were not yet selling, he said.

“What an incredible subliminal message to all of us,” he said.

Seibert said he is also excited to see Kaseya keep all its product lines and those of Datto.

“They’re not dropping any products despite them seeing some overlap,” he said. “Keeping all the products instead of [angering that] part of their partner base is important.

Thumbs Up For Executive Retention

Keeping executives like Rae and Weeks at Kaseya was a big move for the company and a key to a successful acquisition, said Allen Falcon, CEO of Cumulus Global, a Westborough, Mass.-based MSP and Kaseya partner.

Falcon also said he is happy to see Kaseya decide to invest in building Datto’s networking business.

“The networking products are a great line, but it has a different DNA from the rest of Datto and Kaseya’s products,” he said. “They have a different management console. I hope to see more sophisticated monitoring and management going forward.”

The acquisition is a great move for MSPs, said Phillip Walker, customer advocate CEO at Network Solutions Provider, a Manhattan Beach, Calif.-based MSP and Kaseya channel partner.

“I know that a lot of fear, uncertainty and doubt creep in because people are hesitant to change,” Walker told CRN. “But this will be important over the next few years. Customers are changing, and their buying needs are changing. Kaseya’s acquisition of a hardware and software manufacturer like Datto is good for us.”

Kaseya has a history of not meddling with things the company acquires, Walker said. Technologies like IT Glue and Graphus are little changed except that they are all a part of Kaseya and its portal, which adds a ton of value to MSPs. However, he said, integration takes time for any company.

“The deal literally closed just a few hours ago,” he said. “Every software company has been at this point. It’s painful at the beginning, but eventually you meet that ‘Nirvana’ moment where it all comes together.”

The channel is in for a fresh new wave of post-COVID business this year, and the demand for agile technology will boom, Walker said.

“So the tools we use from Kaseya and Datto are more important than ever,” he said. “And now we don’t have to choose from one vendor or the other. It’s a big win all around. You just need to ride the change window and focus on the business because this is going to be a growth thing for us.”

The investment Kaseya made in acquiring Datto should be a sign that the MSP space is where the action is, said Jim Turner, executive vice president of business development at Frontline Managed Services, an Atlanta-based MSP and Datto partner.

Turner told CRN he expects the acquisition will lead to more investment in the MSP business, whether it’s starting a new private equity fund to invest in MSPs or someone looking to be the next Austin McChord, who started Datto in his parents’ basement by building his first data protection appliance with Lego bricks forming the enclosure.

“With this deal, we see the managed services space has grown up,” he said.

As an MSP fully entrenched in the Datto ecosystem, Turner said he loves seeing Kaseya keep the entire Datto product line and drop prices by an average of 10 percent.

“And it’s no secret I’m a fan of Rob Rae,” he said. “I’m glad to see he is remaining on board. Datto people are still talking to me about supporting us in an event and in visiting customers.”

That said, Turner said he expects some people to leave Kaseya or Datto, and that such departures probably are not because of the acquisition.

“I hope people on the sidelines don’t see someone leaving and say, ‘I told you so,’” he said. “I’ve seen some Datto people leave to take positions at, say, a security company. A lot of people are trying to understand where they want to be and will leave whether Datto is acquired or not.”

Still Issues To Be Addressed

MSPs acknowledged that the merger of two important MSP-centric businesses will need time to work out all the potential issues.

Seibert said it is still somewhat worrying that Kaseya does sell some of its technologies direct, unlike Datto where 100 percent of the focus was on its MSP channels.

He also said security in the newly expand Kaseya ecosystem will be a question mark going forward.

“I’m not talking about Kaseya’s security,” he said. “Instead, Kaseya now has a much bigger software stack. Security is an issue for the industry as a whole, and as a company’s software stack grows the attack surface increases. I hope to see how Kaseya will address this now that is has more resources.”

For Falcon, Kaseya still has to prove that it can make things easier for partners as it integrates new technologies.

For example, he said, before Kaseya acquired Spanning, he could set up a new customer in five minutes using the Spanning portal but now needs up to 24 hours via the Kaseya portfolio.

“Efficiency-wise, the Kaseya portal on the back end is good for Kaseya,” he said. “But we want to see the impact on partners. Partners will also be watching how Kaseya positions its PSA [professional services automation] tool versus Datto’s. This is the next level of detail we need.”

MSPs should not be sad to see Datto become part of Kaseya no matter how much they loved working with the company, Turner said.

“I hope MSPs who worked with Datto take pride in what they did to help Datto,” he said. “I hope they don’t feel abandoned. And I hope they take a minute to appreciate what Datto did for them.”