Datto-Autotask Merger Rocks MSP Space; Now What?

The purchase agreement to bring together channel giants Datto and Autotask was about 72-hours old when MSPmentor caught up with executives of the two companies to discuss where the combined entity goes from here.

Beyond some obvious synergies of combining a leading business continuity vendor and a top RMM/PSA software maker, it seems that the biggest ideas for capitalizing on the respective strengths of the parties are yet to be conceived.

The first order of business is securing regulatory approval and closing on the deal as scheduled by the end of 2017.

After that, it’ll be about showing partners and customers how they stand to benefit from the new union.

“There are a lot of interesting opportunities that this presents to us immediately,” said Brooks Borcherding, chief revenue officer at Datto.

He expects a deepening of Datto’s existing integration with the Autotask platform.

There might also be new ways to leverage an existing relationship where Datto customers receive Autotask Endpoint Protection as a perk of their subscriptions.

Terms of the latest deal weren’t disclosed and Borcherding wouldn’t discuss details of how long the deal was in the works before the announcement.

But clearly there was a sense that the upside for the collective parties was too compelling to ignore.

Datto has made no secret that it’s been exploring ways to finance its next phase of growth.

“This was opportunistic,” Borcherding said of being approached by Vista Equity Partners.

Vista’s portfolio of roughly $30 billion already includes Autotask.

“They have a track record…of enabling companies to be successful,” the Datto CRO added. “They offer many things to us.”

The merger creates a powerhouse of best in class products, said Patrick Burns, vice president of product management at Autotask.

“Both companies were doing really well on our own and have strategies that were effective,” he said. “But once Vista saw the opportunity to put us together, it was just too undeniable to pass up.”

The companies, Burns said, have complementary products and customers, and sufficiently similar cultures and philosophies.

That can only mean good things for partners, he said, but precisely how remains to be seen.

“We literally don’t know,” Burns explained.

“You’re not going to see any immediate material change,” he said. “It’s really down the road as we put together a joint roadmap.”

And that roadmap will continue to include a broad range of integrations with competing products, Burns insisted, perhaps pushing back at some of the early criticism from competing MSP toolset vendors.

“ConnectWise currently offers our customers six different data protection solutions: Infrascale, Acronis, Storage Craft, Veeam, Centrestack and Storage Guardian,” ConnectWise CEO Arnie Bellini said in a statement. “Those choices are important!

“It seems the new Datto/Autotask merger will offer a single data protection solution. That may not work out well for them.”

The new combined company, Burns said, has no intention of curtailing integration activity.

“We’ll continue to encourage integrations and we’ll keep winning by innovating and adding more value,” he said. “We’ve got some big integration topics that we have to deal with from an operational standpoint.”

“This is a big transaction and a big combination,” Burns explained. “And while we’re massively excited…first of all we’ve got to put the companies together.

“That doesn’t happen by itself. We want to be thoughtful and we want to be effective in doing that.”

“We have a lot of blocking and tackling on the partner side. We want to make sure that we take two successful companies and make them more successful together.”

Burns did add, however: “I would be surprised if we don’t have some interesting things to talk about in the first 90 days.”

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