Amid the Autotask-Datto merger, Autotask CEO Mark Cattini will exit the combined company sometime soon -- leaving Datto CEO Austin McChord to run the merged businesses.
Most channel eyes were on McChord today, and his vision for the combined company. But frankly, Cattini deserves applause as he heads out the door.
The proof point: When Cattini succeed founder Bob Godgart as CEO in 2010, Autotask was about a $20 million business, sources tell ChannelE2E. Fast forward to 2017, and I suspect Autotask is a $100 million-plus company. I know my numbers are off (leaks for exact figures are welcome) but here's my key point: Revenues have grown significantly.
How the heck did that happen? The answer involves multiple strategic bets -- many of which paid off -- along with some timely business pivots.
Autotask 2010: Albany SaaS, Aspiring Community
First, some credit toward Cattini's predecessor, Bob Godgart. I've never built a $20 million software business. Have you? Now, imagine building that SaaS-minded business a decade before SaaS went mainstream -- at a time when most customers were still aggressively hugging servers and licensing software. Godgart's entrepreneurial know-how made Autotask an early MSP industry player.
Still, there was plenty of work to be done when Cattini arrived. Among the challenges: Autotask's SaaS platform was mostly hard-wired to Microsoft.Net or something along those lines. It wasn't cross-browser. It wasn't mobile. It wasn't... a lot of things. Moreover, Autotask was spending heavily to counter rival ConnectWise's community-driven approach to business building. (Side note: ConnectWise has grown and evolved significantly since that time; but that's a blog for another day.)
What was Cattini's plan? To find out, I visited Autotask's offices in Albany, New York, sometime during his first few weeks with the company. While there, I sat with Cattini and Godgart -- who shifted to chief innovation officer before moving on to new opportunities in 2011. We discussed the MSP market. I did a lot of talking. I kept waiting for a vision statement from Cattini. I didn't really get one.
I wondered if Cattini knew what he was getting into. After all, he was facing a North American knife fight vs. the ConnectWise Community approach. He seemed oblivious to it all.
In reality, I was the dunce in the room.
Autotask 2011: Global SaaS with Localization
By late 2011, Cattini began to pull back the curtain on his strategy. Instead of building user communities across the United States, he went global -- ordering Autotask's R&D team to develop localized versions of the SaaS platform for multiple markets. Around the same time, Cattini sold off a failed acquisition -- VARstreet -- to double down on the PSA SaaS offering.
Autotask never truly killed off its community approach. Community leader Jay McBain exited to form a new company with Godgart before becoming a leading channel expert with Forrester Research. After McBain's departure from Autotask, Senior VP Len DiCostanzo took on the Autotask Community role, and conferences like Autotask Community Live gained a larger and larger following. Both in North America and abroad.
Still, that idea of a toe-to-toe battle against ConnectWise's community approach was over. Instead, Cattini wanted to focus on scaling a global software model.
A few MSP software companies had global footprints at the time. But Autotask plowed a global path that many software partners and rivals attempted to follow.
Have You Met Pat? (Plus, Funding for RMM)
Somewhere along the line, Cattini built a kinship with Pat Burns, Autotask's VP of product. Disclaimer: I'm about to overlook dozens (actually, hundreds) of Autotask employees who helped to scale the company. But the Cattini-Burns combo can't be overlooked.
Without Burns' product know-how, I'm convinced, Cattini could not have executed on his global vision. And that vision became grander and grander.
To deliver on those ambitions, Cattini needed a war chest. That arrived when Vista Equity Partners acquired the company in 2014. Shortly thereafter, Autotask acquired CentraStage for RMM (remote monitoring and management) capabilities. Ironically, Cattini had earlier vowed to never enter the RMM market. But ConnectWise's move into RMM essentially forced Cattini's hand -- and prompted the CentraStage deal.
But here again, Pat Burns and the R&D team delivered on Cattini's mission. CentraStage gained more and more features and functions. More recently, Autotask's RMM and PSA offerings became unified.
Soonr (Or Later?)
Not everything Cattini touched turned to gold. In mid-2015, Autotask acquired SoonR -- a file sync and sharing platform. In some ways, that also set the stage for Autotask's endpoint backup platform.
During Autotask Community Live in September 2017, Cattini told me the offerings were performing well in the market. I remain a skeptic on that point, especially when it comes to file sync and sharing. Box. Dropbox. Google Drive. So many options. So little money leaving my wallet. I just don't get file sync and share.
War (Then Peace)
Now here's where things get extra ironic. As Autotask attempted to make a run at the file sync and sharing market, Datto attempted to torpedo that entire segment. By May 2016, Datto launched Datto Drive -- a free file sync and sharing service.
Autotask wasn't pleased. And rumor has it Cattini wasn't pleased.
Autotask still had PSA and RMM to cross-sell. The installed base grew. But by September 2016, I started to wonder if Autotask was up for sale. The company's Autotask Community Live conference had a little less energy than usual. Executives seem to be somewhat distracted. And in lots of meetings. But my hunches seemingly were wrong. During several meetings I attended, anecdotal evidence suggested the business was still performing well.
Oh, and what about that file sync and sharing feud with Datto? At some point, the companies made nice with one another. Perhaps because Datto lost interest in that market.
Datto and Autotask Sold? (Sort Of)
Fast forward to recent months. Datto hired Morgan Stanley to explore a potential company sale. Vista Equity Partners, meanwhile, also was open to potentially selling Autotask. And then a rather creative deal emerged.
Vista, I've heard, actually made two moves:
- Move One: The private equity firm allegedly sold and acquire Autotask -- essentially moving the company from one Vista fund to another.
- Move Two: Acquire Datto and combine it with Autotask.
I haven't confirmed Move One directly with Vista and Autotask, but multiple sources say it happened.
Cattini's Quiet, Successful Exit
When Datto and Autotask announced today's merger, it was clear McChord will be calling the shots going forward. As Burns told me today, "Mark would love to have stayed but you can't have two CEOs."
That's exactly right. As I stated in a blog yesterday, mergers of equals don't succeed. One leader must emerge, and one leader must exit. Quickly.
Cattini will stick around to help McChord with the business transition. But let's be honest: Today, in many ways, was Cattini's exit.
And on that note let's not forget: He took us all on a heck of a global journey.
