Datto CEO Steps Down, Follows Brother Out the Door

If you’re in the channel and don’t know who Austin McChord is, the furor surrounding his resignation, announced Tuesday, will likely make that impossible. In a letter to partners, McChord announced that he is leaving his position as CEO of Datto, the backup and disaster recovery (BDR) provider he founded 11 years ago in his parents’ basement and that he subsequently grew into a company that sold last year for more than $1.5 billion.

“The decision I made was a very personal one,” he told Democrat & Chronicle news. “I’ve basically done Datto my entire life. It’s been a 24/7, 365 job. And a life that is just Datto is not a life well lived.”

Partners and competitors alike expressed surprise and regret at the news.

“Sad to see Austin step down as CEO, but have high hopes he will still be heavily involved and help maintain the great company culture and focus on the MSP channel direct market,” remarked Brian Weiss, CEO of iTech solutions, an MSP.

Datto’s Austin McChord

Two weeks ago, McChord’s brother, Ian McChord, similarly announced his departure from the BDR provider.

“Seven years ago I joined my brother and a handful of brave souls on the journey to build a great company,” wrote Ian McChord in a LinkedIn post. “Since then we went through two rounds of funding, three acquisitions, unicorn status, six DattoCons, four product verticals, hundreds of features and countless product launches. After all that, I overwhelmingly feel that we have built a great company … While I do not hold a title at Datto anymore, I will always bleed Datto blue hashtag #dattolife.”

Tim Weller, Datto president and COO, will step in to lead day-to-day operations while the board conducts an executive search, McChord said. Since joining Datto nearly a year and a half ago, Weller has led Datto’s go-to-market strategy and brings decades of executive management experience to the table. McChord will help Datto’s board of directors, where he will continue to hold a position, in the search for a new CEO.

“This is fantastic for Austin — he has built a fantastic company (and made us a lot of money by allowing us to offer fantastic products to our customers) and now gets to enjoy the fruits of all his hard work,” commented Kevin Damghani, chief partner experience engineer for MSP IT Partners. “This is also great news for Tim Weller … for him to be able to flex his muscle and lead with his own style.”

Damghani went on to say that the announcement is a welcome one for his business as McChord left the company with a solid foundation and powerful focus on its MSP partners.

“Austin has built a truly special company that is poised for tremendous growth,” said Nadeem Syed, operating principal at Vista Equity Partners, the private equity firm that scooped Datto up last year. “While it is always difficult when a founder moves on from a company he built, we are truly grateful for what Austin has created. We look forward to working with him in his capacity as a board member and adviser as we move into this next phase.”

Details on what prompted the move are still fuzzy, but Fred Voccola, CEO of Datto competitor Kaseya, speculates it has a great deal to do with the debt Vista assumed when it made the deal.

“Because they put so much debt on Datto, they have to find ways of …

… reducing operational costs to offset the debt load,” said Voccola. “They may have overlevered that asset. You’re seeing an R&D customer-centric industry pioneer who is leaving his baby, and one can’t help but think a big part of driving that is the fact the investment profile of the company is one that isn’t necessarily his cup of tea.”

Regardless of what necessitated the move, and in spite of Datto partners expressing they’ll miss the visionary, most MSPs are happy that McChord will get a bit of time away before perhaps starting a new venture.

“I think it’s a good thing for him to get some time to himself,” said Joseph Wright Jr., partner and president of MSP Central PA Technologies. “We all know as owners/CEOs that all you do is work. Glad to see him getting sometime for himself in the future. And looking forward to the future of Datto.”

Still, some MSPs expressed concern that McChord’s departure will negatively impact Datto’s partner community.

“It worries me a bit – Austin has been the main driver of the culture at Datto and it is that culture that has made the company so great to work with,” said Jeremy Reynoldson, President of MSP Bralin Technology Solutions. “That being said, one person can’t be the focal point of all that company stands for – so this should be a good long term move for the company and for Austin’s future. Glad to hear he will still be involved at a governance level.”