Datto’s Tim Weller: 'This Is Not a Time to Crawl Under a Rock'

Datto’s Tim Weller has seen the channel weather crises before. As COVID-19 continues to throw businesses into turmoil, depress the economy and increase uncertainties about the future, many partners are looking for any guideposts to give direction.

In our “Channel in Crisis: How Partners Are Navigating COVID-19 survey,” running on Channel Futures and Channel Partners, half (52%) of respondents report at least one quarter (25%) of their customers have reached out for additional support to facilitate remote work accommodations. Yet, 62% say that at least a quarter of their customers have put managed services work on hold. When the market is sending such mixed signals, how do partners prepare their own businesses to succeed in the back half of 2020?

Datto’s Tim Weller

Tim Weller, CEO of backup and disaster recovery solution provider Datto, says there is uncertainty, yes; but there’s also opportunity. We sat down with Weller to get his take on the situation. What can we learn from the past? Where do those opportunities lie? Also, what should be partners’ No. 1 concern be right now?

Channel Futures: What are some lessons we can learn from how the channel has navigated past crises like the 2008 recession or the dot-com bust that might help us figure out where the industry might be headed coming out the other side of this?

Datto’s Tim Weller: Several things came out of those crises that felt very different in pace. One was a much larger willingness to outsource businesses coming out of a crisis. Economies coming out of a crisis are saying, “Why should I be putting on fixed costs? Do I really, as a law firm, need an expert on building my internal network? Do I need that person six hours a week? Somebody staring at my backups? Or my virtualizations? Do I even want to be on premises?”

And so I think there’s going to be a move toward outsourcing, if nothing else for cost reasons. Before they hire that full time IT person back, they’re going to outsource to you as an MSP.

I think there’s a second one which may have been lost on people, and I only know it because I have so many arrows in my back. Coming out of those crises, people are more willing to pay recurring revenue, and not pay the big one-time fee. So Salesforce.com was really born of the internet crash. We came back and we suddenly didn’t want to pay $1 million for a box of software. Salesforce not only reinvented the category CRM; they invented what we now call SaaS.

I’m sure lots of other companies were doing the same, but they became the poster child for that. Coming out of the global real estate meltdown, suddenly we were talking about …

… everything as a service right? Airbnb for your hotel. Forget a rental car, forget a taxi, I’m just going to push a button and a car’s going to show up. This next generation is not going to remember when you own things.

And so for MSPs that are thinking of $15,000 projects, this may be the time where you’re going to your clients saying, “Can you do $5,000 a month? Can you do $3,000 a month?” Get the recurring revenue, and tell them how much service you can reasonably provide. What we know about recurring revenue is that it drives value in your business. Business bankers love to see that if you’re going to borrow some money; friends love to see that if they’re going to invest in your company. I talk about this a lot because it’s really aligned with how Datto has thought about it for a decade. The reason is that we’re passionate believers; that’s what drives value in MSPs.

CF: So where are the opportunities for new business in a COVID world?

TW: It’s a little hard to travel and go with a national strategy right now, but you have to look around at new client bases [and ask yourself], “Should I be going one town over?  What are my unique skill sets?” And we’re finding for really the last year, year and a half, so many MSPs that are even picking off some fortune 500 business. They’re certainly doing university; they’re doing government.

I’m thinking about one small, eight-person MSP I know. They’re going online, and a bunch of states now have RFPs. Whenever a city government is looking for backup or networking services, they know how to remotely apply for these things, and they’ve actually won some of these things. And they’re not that difficult to deliver on.

So don’t assume CIOs of the larger companies in your region are fully staffed. Especially in a crisis mode, they might have laid off people already and be very short-staffed. So it’s a bit of a call to action to at least include that in your search space, if that makes sense, because we have so many examples of that.

CF: What’s the biggest piece of advice you’d give to the industry right now?

TW: This is not a time to crawl under a rock if you’re an MSP. I just can’t stress enough that you want to be there, because they’ll remember you for how you carry yourself in a crisis. There will be opportunity on the other end.