Perception Is Reality: More Partners Weigh In on Kaseya Buying Datto
Here’s another wave of influential MSPs commenting on the deal. Will the core offering be enhanced? Or will it suffer?
April 25, 2022
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What was/is your general reaction to and thoughts about the announcement?
We are a bit disappointed in the news. Though we primarily live in the ConnectWise ecosystem, we have a product or two in each of Kaseya and Datto’s lineup, primarily due to their acquisitions. These days, there’s no credible way of staying “pure” in one platform with all the mergers and acquisitions happening in the marketplace.
Years ago, we moved away from Kaseya, partially because we felt that the ConnectWise integration and technology in Labtech was a better long bet, but partially because of the poor culture and customer service we experienced with Kaseya. We never looked back, but did find Datto’s rise to be interesting.
Now with Kaseya taking the lead over Datto’s situation, I am much more skeptical about Datto being a possible alternative (or diversification move) to ConnectWise. Of course, ConnectWise is likely to have big changes in the future as well. As they say, the only constant is change.
What do you predict the business impact will look like? The expansion?
With respect to Kaseya/Datto, I expect that the next 18 (at least) months will be focused around company integration and employee displacement, which opens up a giant opportunity to ConnectWise to recruit new partners and retain customers who were maybe inching toward the exits.
After the organizations have a semblance of integration, I think it really depends on the vision and execution of the Kaseya team. I expect that a lot of top Datto leadership will depart, so I really think that Kaseya’s folks will be driving the bus.
What will this mean for partners? For the industry as a whole?
Overall, I think it means less choice, but it also creates a huge opportunity for innovation and growth for the smaller startup competitors. Definitely, there will be disappointment and cynicism from current MSPs using any of the big three.
But it will also drive providers to start looking at nimbler, friendlier alternatives. I expect MSPs to get squeezed by less competitive pricing, but again, the more mature and larger MSPs see their PSA and RMM tools as core to their business and still a small number in their overall cost structures.
What will the new brand look like? Who and what will survive?
Good question. Since the community seems to generally disfavor the merger (and perhaps the Kaseya brand altogether), I suspect that a rebrand will happen in the future. Neither Kaseya nor Datto will be the banner so that current and future customers may see it as one, large dominant platform. Kaseya will need to be creative to win over current detractors if the transaction is going to bear fruit and grow the business.
I also think that the looming question will be: “What is next?” What happens if/when Thoma Bravo looks to exit their ConnectWise investment? If Kaseya’s ambition is to flip the larger organization, who is the next buyer? I think that this is the long game that we providers should be looking at as we’re making our platform decisions in the next three to five years.
“There is a very negative sentiment that is permeating the channel with regard to Kaseya. The buzz and comments I’ve heard revolve around this general theory: ‘Kaseya ruins everything they buy.’
“I don’t know that this is true, and it is not my belief, but I think that Kaseya needs to address this negative sentiment, head on. Perception is reality for many customers.”
“I’m not surprised. If you build it, they will come.
“Recent investments into infrastructure and new technologies are continuing to grow from edge to cloud. MSPs and enterprises are looking to capture benefits of distributed workflows. The market for hybrid and multicloud solutions enables workloads to be stored, processed and delivered where they make the most sense for retrieval, performance, cost and compliance.
“But, it’s complex, so demand for tools that aggregate and automate are key to ensuring management of these complex services are optimized.
“The Kaseya and Datto process provides potential for a single-pane security, cloud and cloud management platform which aligns perfectly with organizations, MSPs and MSSPs that are continuing to see demand for streamlined yet distributed workflows grow. The global market for managed services, which was around $107 billion in 2014, will reach about $354 billion in 2026. Expect to see more of these tools as data continues to grow.
“For absorption, I would imagine this is just an expansion of services under the Kaseya portfolio – as a continuation of the strategy for aggregated services they already have.”
What was/is your general reaction to and thoughts about the announcement?
My initial reaction was “Oh crap, not another one …” and then I had to let the emotions settle down and focus on the real picture. It will be really good if it goes well, and it could be really bad if history repeats itself like other mergers and acquisitions have gone in our space. I am obviously hoping for the former.
What do you predict the business impact will look like? The expansion?
It will have a big impact on our business if support, pricing and overall quality of the product goes south. We are a huge Datto shop and we run our business and support our customers with it. Either way, we are committed.
What will this mean for partners? For the industry as a whole?
We are seeing consolidation as a whole and we see VC partners entering on both sides. I think this is just the beginning, and the overall landscape of partners and MSPs will change dramatically. It is like everyone woke up and finally realized the channel and MSPs are real.
What will the new brand look like? Who and what will survive?
That is the million-dollar question. I think it will be a combination of each, and hopefully we get the best of both worlds from this acquisition.
What was/is your general reaction to and thoughts about the announcement?
I want to know how this will impact our relationship with Datto Backup and Unitrends since we use both solutions. And, what does the trajectory look like for both of their overlapping solutions? I will say, we are excited to see how it would increase integration with Datto and the rest of our Kaseya stack since we are a Kaseya shop.
What do you predict the business impact will look like? The expansion?
After listening to [Kaseya CEO] Fred [Voccola] talk recently at Robin Robins’ boot camp, it sounds like business as usual, trying to tightly integrate the products but keeping them on different trajectories. Also, maintaining the great culture at Datto seems to be a focus.
What will this mean for partners? For the industry as a whole?
Again, Fred is saying it will be business as usual, but I know partners are now concerned about three-year locked in contracts and lack of innovation moving forward. For the industry, we are ultimately looking at a few big time players, but hopefully at the advantage of better integration of multiple products.
Fred also mentioned that by integrating the products together and leveraging an AI named Cooper, Kaseya will help ensure that IT providers are using the products as effectively as possible to increase technician and staff productivity.
What will the new brand look like? Who and what will survive?
From the sounds of it, both brands will continue to survive and will look similar to they are now but with more tight integration.
What was/is your general reaction to and thoughts about the announcement?
Awful, sick to stomach.
What do you predict the business impact will look like? The expansion?
I think Datto will start going downhill. Other smaller players will become more popular (Ninja, etc.).
What will this mean for partners? For the industry as a whole?
Datto has already become a more difficult partner to work with over the past couple years as they have been an IPO and care more about their bottom line than their partners. Since they won’t be public anymore, maybe that will change, but we feel it will just get worse.
What will the new brand look like? Who and what will survive?
No idea. They have so many competing products. I think Datto will remain its own separate branded company and Kaseya’s competing products will fade out eventually. Within five years it will all be under one name.
What was/is your general reaction to and thoughts about the announcement?
This is a very scary moment for a lot of us in the Datto camp.
What do you predict the business impact will look
like? The expansion?
It may prove an outstanding MBA case study in the years to come. How will the acquisition of a company with one of the best and most “MSP forward” cultures in the industry by, let’s just say, a different sort of institution, play out? Which culture will survive?
What will this mean for partners? For the industry as a whole?
I feel it is most likely Datto will become Kaseya and not the other way around.
What will the new brand look like? Who and what will survive?
My question is, where in the world will [Datto SVP of business development] Rob Rae be when the dust settles?
What was/is your general reaction to and thoughts about the announcement?
Time to escalate plans to move off of Autotask.
What do you predict the business impact will look like? The expansion?
If what happened to IT Glue is any example, I expect development to slow, support to get worse, cost to go up and extended contracts to show up as a renewal option.
What will this mean for partners? For the industry as a whole?
I think Autotask is likely the odd man out. There is no reason to keep two platforms, long term. First it will be, “we will run two platforms, no need for concern, we are here for Autotask customers.” Then it will go to a sweetheart of a deal to get customers off Autotask to their platform. Then Autotask will be parted out for whatever cool remains and put to bed or at least take minimal development to encourage others to move.
What will the new brand look like? Who and what will survive?
The cool pieces of Autotask will survive, or tech that can be ported to Kasaya. Datto itself will likely survive. No promises on anything else. MSPs like us who bet on Autotask … we lost. Time to find a new horse in this consolidated space to move to.
What was/is your general reaction to and thoughts about the announcement?
Negative. Datto has a stellar reputation, and Kaseya not so much. As others have merged there has been so much disruption and change that the service has suffered greatly. And at times the product stops moving forward as the VCs are just looking to collect on their investment. Case in point, VC1 did sell to VC2.
What do you predict the business impact will look like? The expansion?
Price increases, and slow degradation of product.
What will this mean for partners? For the industry as a whole?
Less competition, higher prices and poorer quality.
What will the new brand look like? Who and what will survive?
Probably either keep the Datto name or totally new (to hide Kaseya).
“There is a consolidation of these services to create a more comprehensive solution for MSPs. We can see ConnectWise is doing the same with their services.
“Enhancing the core offering of an MSP ERP (ticketing/projects/CRM/timekeeping/asset management) and adding documentation, EDR services and other combos is the right direction. Especially with many MSPs being under 20 people, building an all-in-one solution makes great business sense.
“With consolidation of MSPs through acquisition, it will be interesting to see how many large MSPs remain on the Datto/ConnectWise track vs ServiceNow/Netsuite/etc.”
“Obviously, this is big news. And I mean ‘big’ as in it is ‘big company’ news. When a really big company acquires another really big company, it usually has more to do with empire-building and less to do with innovation – which is what gets me excited.
“There’s a lot happening these days in the world of IT, cybersecurity and compliance management but the much-needed innovations are coming from lots of little undiscovered firms. I’m sure Kaseya/Datto will throw lots of resources at client retention and try to build an acceptable ecosystem for their partner community. I’ll be looking forward to seeing how they help in evolving the industry forward.”
“To think that a private company would buy out a publicly traded competitor for $6.2 billion is truly remarkable. This validates our industry and shows how far we have come.
“Kaseya has made several acquisitions over the past few years where we had strong adoption, including IT Glue, Rapidfire Tools and ID Agent. Post-acquisition, the brands remained the same, R&D continued and commitment to community events has endured. I expect the same thing to occur with Datto.”
What was/is your general reaction to and thoughts about the announcement?
Nothing really surprises me anymore with M&A. Once the founder sells the company for the first time, it’s [only] a matter of time before it’s sold again. What I thought was interesting was that a $2 billion company is acquiring the $6 billioncompany, and not the other way around. Maybe it’s because Kaseya is headquartered in Florida, like ConnectWise?
What do you predict the business impact will look like? The expansion?
I’m guessing it’s business as usual until both sides can gel and figure out the standard offering. There’s a lot of overlap in the tools and technology acquired. It’s clearly about the customers acquired and keeping them under contract.
What will this mean for partners? For the industry as a whole?
It will mean less choice with two major stacks (Kaseya and ConnectWise). Right now, we are mixed in both companies. The agony of change is real, and trying to change solutions to keep up with the consolidation is expensive and time-consuming. Kaseya and ConnectWise have had their differences which have been on display in the past, so it’ll be interesting to see how everyone plays out.
What will the new brand look like? Who and what will survive?
Not sure what they’ll call themselves, or what the org chart will look like, but I would expect some early retirements coming.
“As a client of Kaseya for their RMM and IT Glue solutions, as well as Datto for their PSA, we welcome the likelihood of improved integration between the platforms.”
“Kaseya has a reputation of being hard to deal with, and I’d hate to see Datto go that way. We have been an IT Glue customer for years, and they have become more and more difficult to deal with. Three-year contracts that auto-renew unless we cancel in month 35 is ridiculous. I have been a big Datto fan, but I am cautious and checking out alternatives.”
“Kaseya has a reputation of being hard to deal with, and I’d hate to see Datto go that way. We have been an IT Glue customer for years, and they have become more and more difficult to deal with. Three-year contracts that auto-renew unless we cancel in month 35 is ridiculous. I have been a big Datto fan, but I am cautious and checking out alternatives.”
Since the announcement of Kaseya buying Datto, we have highlighted various points of view on the matter. We sought MSP reactions, picked at trend threads, and have heard Kaseya CEO Fred Voccola’s side of things.
This being one of the biggest M&A deals in the history of the industry, it’s certainly no surprise the sheer amount of thoughts and insights we received from our network of partners. Insights that landed on both ends of the spectrum.
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So we decided to do a second roundup of feedback we’ve received from influential MSPs on this significant and still-unfolding saga.
Check out the gallery above to see what our 2021 MSP 501ers and NextGen 101ers are voicing about the acquisition. Round two.
Want to contact the author directly about this story? Have ideas for a follow-up article? Email Allison Francis or connect with her on LinkedIn. |
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