Kaseya Fires Back, Rebukes Accusations from Datto Founder in Internal Email

The chief financial officer at Kaseya is firing back in an internal email obtained by Channel Futures, taking on accusations from the founder of Datto.

Weeks after the Kaseya purchase of Datto closed, and months after the news was first public, Datto founder and former CEO Austin McChord chimed in last week. The deal has been criticized by some MSPs who fear that Kaseya will not uphold the same standards that the industry has come to expect from Datto. 

In a post on GitHub, McChord accused Kaseya of flipping the desk, as it were, claiming that the software giant is set to destroy the Datto dynamic. 

‘Everything Will Be Fine’

The post started off highlighting the sentiment that Kaseya has been touting ever since the acquisition was announced.

“Until recently I have been very much telling everyone to assume positive intent,” McChord wrote. “Kaseya is looking to continue Datto’s success. In general, people don’t spend $6+ billion on something they intend to break. Change is inevitable and mistakes will be made, but by and large Datto should expect to continue to be the company that is loved by employees and customers alike.”

In several interviews with Channel Futures, Kaseya CEO Fred Voccola has made it clear that he is committed to keeping the Datto brand and culture intact.

“We’ve done 12 acquisitions since I’ve been here,” said Voccola in April. “Every single time we’ve done the exact same thing. We’ve kept the brand. We have kept what made the company we’ve acquired great. We’ve kept the entire team, never [doing] mass layoffs. We’ve never shut down offices, [and] never discontinued technology. We have always either doubled – if not tripled – the investment in tech. That’s a huge thing; that’s part of our strategy.”

Renewed Acquisition Angst

The basis for McChord’s GitHub post was a seemingly renewed outpouring of concerns regarding the deal “fallout.”  

Austin McChord

“This past week, many current members of the Datto team have reached out deeply dismayed,” McChord wrote. “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.'”

McChord conceded that his understanding of the specifics of these concerns come entirely secondhand, but nonetheless, voiced his distress. The concerns and allegations included sidelining employee resource groups that support underrepresented people at the company, long-term changes to budgets with decreases in excess of 30%, not treating the office as a hub for the community, and reducing maternity leave and vacation/PTO.

Kaseya Claps Back

To put a stop to the swirling rumors, Kaseya addressed McChord’s comments in an internal email to Datto employees (or “our newest Kaseyans”). 

Kaseya’s Kathy Wagner

“Over the weekend, there was some false information published on social media about your future at Kaseya,” wrote Kathy Wagner, chief financial officer, Kaseya. “This information was ‘based’ on information from secondary sources, possibly derived from interpretation of what our CEO, Fred Voccola, said at several town halls this past week addressing our Datto employees. In light of the false statements that were posted online, I wanted to set the record straight on several facts.”

Benefits ‘Facts’

“First, there are zero changes to the benefits of all Datto. Period. [Addressing the specific concerns that were published online] … there is no reduction in the 401(k) match, no change/reduction in maternity/paternity leave benefits, nor changes/reductions in …

… PTO for any Datto employees. This was very clearly stated by Fred at both the Boston and Norwalk town halls, and the FAQs that were sent when the deal officially closed.” 

Wagner also debunked the matter of office culture, citing that Voccola has already directly addressed this concern. The culture of offices being gathering spots for employees, events, social and community time, etc., will not only be reinstated but increased, claims Wagner.

Expenses ‘Facts’

In terms of reducing expenses, Wagner says that there was never, nor is there a goal of, reducing expenses by 30%, or any targeted number for that matter. 

“Fred was very clear and direct on this in both town halls,” Wagner presses. “As [he] mentioned, there are zero mass layoffs planned. I repeat, we will not come in one morning and cut the team by X%. That is NOT happening. Yes, there will be some people who will no longer be with us, due to issues such as redundancy of jobs (the example Fred used is that Tim Weller is no longer here as a company does not need two CEOs), elimination of required positions as a result of our company no longer being a public, and targeted changes like that. However, as was clearly stated by Fred, the plan for the acquisition of Datto was to increase the investment in the products, technology, and customer support and success, not reduce them.”

Wagner stressed that companies only grow via investment. From a financial business case, Kaseya acquiring Datto was one of value creation through growth, as opposed to a financial business case of value creation through cost synergies. As a combined entity, Kaseya is looking to add over 1,400 employees over the next 12 months.

“That is the exact opposite of any broad-based reductions in our workforce,” said Wagner.

The Winds of (Challenging) Change

Wagner ended her correspondence by hammering home the message Kaseya has tried to convey since the beginning. Change is difficult.

“The acquisition of Datto by Kaseya creates tremendous opportunities for employees as well as customers,” Wagner concluded. “The combined company now spends over $1 billion a year on “stuff” (people, technology, etc.) and that stuff will allow our company to deliver the best technology to our customers. [This is] with the absolute best customer service that will enable our MSPs to be the most successful MSPs in the world. In doing that, we are creating massive life-changing opportunities for thousands upon thousands of employees of our company; financial opportunities, professional growth opportunities, etc.”

A Supposed Lack of Communication

McChord stated in his post that the method in which these changes have been introduced has done more damage than necessary. 

“Communication has been heavy-handed,” McChord laments. “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 went on to compare this to buying a leading football team, and setting about breaking all the players legs.

“This is not a winning strategy,” said McChord. “It will hurt the entire MSP industry.”

Again, Kaseya was quick to dispel these claims, but one thing is for sure — the industry remains on edge.

McChord founded Datto in 2007 and served as CEO from its founding until October 2018. McChord’s estimated net worth is at least $230 million as of July 22, 2021. Given this, and just looking under the historical Datto hood in general, McChord’s sentiment at this point in time is… interesting.