DattoCon Now has wrapped up. During the virtual event, Datto CEO Tim Weller, CISO Ryan Weeks and other company executives described how the company will further help MSPs to mitigate risk, improve security and drive business growth.
Here's a recap of what we heard -- ahead of the event and during the event.
12. Tim Weller's Perspectives: In an interview with ChannelE2E, Weller expressed continued optimism about the MSP-SMB market, and Datto's commitment to the sector. Among the items we discussed...
- Expanding from Datto's Appliance-based Heritage: Yes, Datto continues to roll out pure cloud services for MSPs. However, Datto also remains committed to on-premises hardware (storage, networking, etc.) R&D, Weller said. A pure cloud approach would foolishly ignore major on-going on-premises opportunities, he indicated. That said, Weller compared Datto to Apple -- which offers a mix of hardware and services. One analogy: He noted that Datto networking gear is like the Apple Watch -- extremely important to the overall business, even as other products (i.e., iPhone for Apple; storage appliances for Datto) may generate more headlines and mindshare.
- Helping MSPs Set Up Storefronts: More than a sales quoting tool, Weller said the recently launched Datto Commerce platform will help MSPs to set up their own self-service storefronts and plenty more.
- Co-Managed Services: Here, Weller noted that many Datto MSPs are maturing and serving larger customers. Those customers, in turn, want co-managed services that extend from the MSP to internal IT departments. Amid that reality, Datto continues to enhance its RMM and Autotask PSA software with co-managed services capabilities.
We'll hare more details from our interview with Weller in the days ahead.
11. Datto SaaS Defense: The new product, based on the BitDam acquisition (see item 6 below), provides threat protection and spam-filtering to "proactively detect and prevent malicious malware, phishing, and Business Email Compromise (BEC) attacks that target Microsoft Exchange, OneDrive, SharePoint, and Teams," Datto indicated. Additional technology demonstrations included Datto RMM Ransomware Detection, and Datto Continuity for Microsoft Azure (see item 7 below).
Pre-Conference Perspectives
ChannelE2E published the following observations and context before the virtual event kicked off...
10. Datto's MSP Partner Base, Reach and Growth: Ahead of the conference, Datto indicated that the company has has more than 17,800 MSP partners. Also, roughly 1,250 MSPs each contribute over $100,000 ARR (annual recurring revenue) to Datto, compared to 1,000 MSPs at that ARR level in June 2020. Those stats surfaced in August as part of Datto's quarterly earnings release.
9. M&A and Competition - MSP Technology Platforms: Primary rivals include ConnectWise, Kaseya and N-able. Some market speculation increasingly wonders if the "Big Four" MSP platform providers will soon become the "Big Three" via M&A. But I'm not so sure. I'll explain why in a separate blog (soon). Meanwhile, Datto should not overlook rival NinjaRMM's organic growth, key moves at Barracuda MSP, and emerging developments from such startups as Atera, Superops.ai and Syncro MSP.
Despite all that competition, Datto was humming along ahead of DattoCon. Revenue was $151.6 million in Q2 of fiscal 2021, up 22 percent from Q2 of fiscal 2020. The results generally beat Wall Street’s expectations.
8. On-Premises Appliances vs. Pure Cloud Data Protection: Datto initially was known for on-premises storage appliances that backed up data to Datto's own cloud. But the COVID-19 pandemic accelerated work-from-home and work-from-anywhere customer trends. Generally speaking, that meant MSPs and their SMB customers were seeking more direct-to-cloud options. Datto rival Axcient, in particular, jumped on that trend. We'll ask Weller for his views on the direct-to-cloud conversation during our interview later this week.
7. Business Continuity for Microsoft Azure: Promoting the new Datto Continuity for Microsoft Azure service, the company is telling MSPs to focus on four business continuity and disaster recovery (BCDR) attributes for protection virtual machines (VMs) in Azure. The attributes are (1) ease of use, (2) predictability of restore, (3) efficiency, and (4) flexibility.
No doubt, Azure-focused data protection is a growing market. But it's also crowded with competition. For instance, OwnBackup is extending from Salesforce to Azure and Dynamics 365 data protection, and Microsoft invested in Rubrik in August 2021 to protect Azure and Microsoft 365 customers from ransomware. Also, some MSP-centric technology companies — including Acronis, Axcient, Carbonite and MSP360 — already have Azure-related data protection services.
6. MSP Supply Chain Security: Datto CISO Ryan Weeks has emerged as one of the MSP industry's top cybersecurity proponents. But he's more than a figurehead. Dozens of employees report into Weeks, which suggests the company is dead-serious about mitigating its own business risk and MSP ecosystem risk. In addition to people and processes, Datto is investing in cybersecurity products. A case in point: Datto acquired BitDam in August 2021. The move is designed to provide MSPs with more ways to stop ransomware, malware & phishing attacks across Microsoft 365 & Google Workspace. Also, Datto RMM has been gaining some anti-ransomware security. But I sense more cyber milestones will surface at the event...
5. Co-Managed Services: A recent Datto Autotask PSA (professional services automation) software update could help MSPs deliver co-managed services to end-customers. Sure, the main PSA software competition involves ConnectWise Manage. Moreover, the new Autotask release could position Datto to compete more effectively vs. ServiceNow in mid-market and enterprise MSP accounts, ChannelE2E believes.
4. Managed Network Services: The Datto product portfolio also includes cloud-managed WiFi access points, edge routers and switches. Some of the technology involves Datto's Open Mesh acquisition in 2017. Fast forward to present day, and Datto doesn't say much about networking hardware during the company's quarterly earnings calls. We'll ask Weller for an update on the business, particularly in terms of R&D and product supply chains amid continued worldwide chip shortages.
3. Competing and Cooperating With Distribution: Datto quietly acquired Gluh in 2020, and transformed the software into Datto Commerce-- a real-time quoting and procurement platform for MSP.
Datto Commerce could potentially automate and speed sales pipelines from Datto and distributors through MSPs to end-customers. Along the way, Datto may end up competing in some ways against Pax8, ConnectWise Marketplace, ConnectWise Sell (formerly Quosal), and Quotewerks, ChannelE2E believes. Moreover, there could be competition involving Ingram Micro’s Harmony PSA platform, which tucked into Ingram’s CloudBlue software business.
2. DattoCon 2022 -- Where and When?: The 2021 event, originally set for Seattle, shifted to a purely online conference because of continued COVID-19 concerns. Looking ahead to 2022, it's safe to expect Datto to explore a major face-to-face conference resumption. The big questions: What city and what date? We'll be listening for clues.
1. More DattoCon 2021 News: Check this blog regularly for more updates. And email me your news tips for potential coverage.
Blog originally published October 10, 2021. Updated multiple times thereafter.
