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DattoCon 2018: Datto Widens, Sharpens Its MSP-centric Approach After Autotask, Networking Acquisitions

Datto CEO Austin McChord opened this week's DattoCon 2018 conference by noting how quickly the SMB IT business is growing and how Datto and its MSP partners can take advantage of that growth with an ever-wider range of services.

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Datto, the MSP-focused storage vendor that last year made acquisitions in networking and MSP platforms, has made significant moves towards becoming what company execs are calling the largest MSP-centric technology provider on the planet.

Austin McChord, Datto’s CEO and founder, told an audience of MSPs at the company's DattoCon 2018 conference, held this week in Austin, Texas, that the expansion of Datto from a company focused on storage and security to one that encompasses a wide range of MSP technologies comes at a time of great growth in the MSP market.

McChord said Norwalk, Conn.-based Datto estimates the SMB IT business to currently be worth about $40 billion, of which half is provided via MSPs. That opportunity is expected to grow to $72 billion by 2022, he said.

[Related: Datto, Autotask Execs On Why The Two Companies Can Combine And Create More Opportunities For MSPs]

"Small businesses are continuing to invest in new technologies such as HIPAA, ransomware, and the cloud," he said. "Small business will need to turn to managed service providers."

To meet the needs of SMB-focused MSPs, vendors like Datto need to provide three things, McChord said.

The first is an open and broad portfolio, which McChord said Datto now does thanks to a couple of key acquisitions, including the blockbuster late-2017 acquisition of MSP-centric remote monitoring and management (RMM) and professional services automation (PSA) vendor Autotask, and the January 2017 acquisition of networking vendor Open Mesh.

The second is to support an open ecosystem that gives MSPs a choice of vendors so that if a company like Datto develops a networking business there is nothing that prevents MSPs from working with whichever networking vendors they wish, he said.

The third is a real MSP focus. McChord said that Datto brings MSPs to its office to meet with every new hire. "Every single department of Datto loves MSPs," he said.

Datto this week is showing that it has moved beyond its traditional storage and security focus to become a major enabler of a wide range of technologies MSPs need, said Joe Tapias, western regional director of sales at Cyberforce Security, an Irvine, Calif.-based master managed security services provider that works with hundreds of MSPs.

"Datto is making leaps and bounds in multiple areas of concern not only for MSPs but for the customers," Tapias told CRN. "They have a wholistic approach to make sure companies stay up and running as opposed to designing a widget that is a backup solution. [And] they're expanding out into a much more broader solution than they started with, and I have to give them kudos for being extremely successful."

Dave Seibert, chief information officer at IT Innovators, an Irvine, Calif.-based MSP and Datto channel partner, said Datto has not only expanded from its roots, it is showing the MSP community just how quickly the business is changing.

For instance, Seibert told CRN, the idea of data backups and business continuity has changed quickly in the last few years.

"For anyone that's not staying current, or who thinks they do know what current is, it's changing," he said. "Clients are expecting more and more."

At the same time, the cloud, rather than making IT easier as so many people believe, is actually injecting complexity into the business, Seibert said. This, combined with fast-changing continuity issues, is real revenue opportunity for Datto MSPs who take on the vendor's expanding capabilities, he said.

"Everybody's worried that IT people will be out of work because everything's going to go to the cloud and IT providers won't have anything to do any more," he said. "I think it's just the opposite. I think the opportunities are getting better and better."

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