Kaseya, backed by private equity firm Insight Partners, has completed the Datto acquisition for $6.2 billion, essentially taking the data protection technology company private and creating the MSP software industry's largest business.
The combined company, known as Kaseya, offers IT management, automation, data protection and cybersecurity tools to MSPs and midmarket IT departments. Thousands of mutual Kaseya-Datto MSPs could potentially benefit from improved product integrations, but some MSPs are concerned about product overlap and potential rising prices.
Kaseya CEO Fred Voccola addressed those concerns in a prepared statement:
“As we promised when we announced our intent to buy Datto, customers are going to see investment in innovation and integrations go up and prices come down. We are increasing our technical investment in our products to ensure that every one of them will be supported and integrated, with enhanced functionality. The end goal is to be the most affordable and best option on the market for our awesome customers."
Kaseya Statements on Datto Pricing, Integrations
Among the proof points Voccola and Kaseya offered:
- At least 17 workflow integrations between Datto products and the Kaseya platform are planned within the first month;
- 100% of commercial integrations are anticipated to be completed within 120 days;
- the list pricing on all Datto technology will be reduced by 10% (on average) or more on new purchases; and
- some products’ list prices will come down more than that, while others might remain the same.
Still, it's important to note that the gap between list pricing and actual pricing in the MSP market can vary dramatically -- especially when deals involve MSPs that buy and negotiate in bulk, or MSPs that vow to switch from one software supplier to another.
Datto's Rob Rae: Sticking Around?
Meanwhile, Datto Senior VP of Business Development Rob Rae was quoted in the press release -- a key move designed to put Datto's MSP partners at ease. Datto CEO Tim Weller was not quoted in the M&A announcement, while likely signals his exit from the combined business.
Rae stated:
“This is absolutely the best thing that could have happened to Datto, our employees and most importantly our MSP Partners. Datto has always been committed to building great technology and creating a culture where its MSPs customers always come first —and as part of Kaseya, we will be able to do this bigger, better, and at lower cost to the MSP.”
We're checking to see if Kaseya and Rae have reached a post-deal employment agreement.
Kaseya-Datto: Growing Amid Competition
Kaseya and Datto both were growing ahead of the M&A deal. And it's a safe bet Kaseya, backed by private equity firm Insight Partners, plans to drive additional growth post-deal. Still, competition and rival moves by ConnectWise, N-able, NinjaOne and various startups will likely be intense in he months ahead.
Among the wildcards to keep in mind:
- Kaseya did not mention which Datto executive team members would remain with the business.
- Headcount at Kaseya (1,885, according to LinkedIn) and Datto (2,109 according to LinkedIn) likely involves some overlap in multiple departments. We'll be watching to see if any cuts emerge.
- DattoCon22 is scheduled for September 2022. We'll be watching to see how the M&A deal influences the conference agenda.
