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Datto MSPs Blast Kaseya Deal: This ‘Is Bad For MSPs In Datto-Land’

Joseph F. Kovar

Concerned Datto MSPs tell CRN they are now considering their options for moving off the company’s services as it prepares to be acquired by Kaseya, even as others caution against a rush to judgment.

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Kaseya’s planned $6.2 billion acquisition of rival MSP platform provider Datto has riled up loyal Datto partners who are concerned Kaseya will not provide the same high-level partnership and channel-friendly experience they are used to.

One MSP executive told CRN he just pulled the plug on switching some of his business from ConnectWise to Datto because of Kaseya’s impending acquisition.

“I canceled the meeting [this week] with our Datto channel account manager, and I let him know, ‘There is no need to have the meeting,’” said the MSP executive, who asked not to be identified. “We were going to specifically talk about doing a deep dive into [Datto’s] Autotask and their RMM stuff, and about making a move starting at the end of second quarter to Datto from ConnectWise, and about what resources could they provide to help us get our data over. I pulled the plug on it because Kaseya is buying them.”

[Related: Kaseya CEO: MSPs Are ‘Playing With Fire’ If They Can’t Get Their Customers To Pay For Security]

The MSP currently does about $200,000 per month in Datto SaaS protection and is now assessing whether to move that business elsewhere, he said.

His negative perceptions of Kaseya’s treatment of its partners and past track record integrating acquisitions make him hesitant to move forward with Datto once it is acquired by Kaseya, he said.

Those concerns were echoed by other partners of Norwalk, Conn.-based Datto, some of whom told CRN they might stop doing business with Datto as a result of Kaseya’s impending acquisition. They pointed to worries about Kaseya’s history of integrating past acquisitions, level of service and support and overall culture as reasons they are pessimistic about the move.

In response to a CRN inquiry, Miami-based Kaseya declined to discuss MSP concerns. Dana Liedholm, senior vice president of corporate marketing, told CRN via email that the company is looking forward to working with Datto MSPs.

“To MSPs who are concerned, I would like to reiterate the following: Kaseya is thrilled to announce the agreement to acquire Datto. This partnership will combine Datto’s world-class customer experience and support with Kaseya’s complementary products and strategies that drive innovation and global market development. Together, we can provide MSPs around the globe with broader and better integrated solutions to tackle their most pressing challenges. Both Datto and Kaseya have a commitment to helping our partners succeed, so this acquisition provides even more opportunities for innovation across the MSP channel,” Liedholm wrote.

MSPs On Doing Business With Kaseya

The MSP executive said his perception is that Kaseya is not a channel-friendly company.

“Kaseya does [unwelcome] things like sending out renewal paperwork that’s automatically [in force for] three years instead of one year, without telling the partners and giving them advance notice that there’s a change in the terms and conditions,” said the MSP executive. “Partners get caught unaware.”

The MSP currently does have a partnership with Kaseya through previous relationships with two companies—SaaS-based application data protection technology developer Spanning Cloud and dark web monitoring company ID Agent—which were acquired by Kaseya in 2018 and 2019, respectively.

He described a scenario where a Spanning Cloud rep will call to encourage him to turn on features that overlap with services he already sells from ID Agent, even though doing so would decrease the MSP’s revenue from those services by half.

“I have no trust that they’re going to integrate the Datto products and services in a rational way,” he said.

Ryan Grimes, president of My IT Indy, an Indianapolis-based MSP and Datto channel partner, said he is now considering whether to move off Datto because of the acquisition.

“Moving off a platform is nothing anyone really wants to do, but I don’t like Kaseya,” Grimes told CRN.

That said, it is hard to find an alternative, he said.

“My contract with [Datto’s] Autotask is not up until next year,” he said. “So we’re not rushed. But I know others who are rushed. It’s a good thing we don’t have to change right away. We’re looking at Syncro’s and Halo’s PSA as alternatives. And RMM is another issue. We’re trying to see if they fit our business model.”

Regardless, My IT Indy will still have a relationship with Kaseya in some form because of its IT Glue offering. “We’ve used IT Glue from Kaseya for 10 years,” he said.

Grimes said he’d be disappointed if key Datto people leave after Kaseya’s acquisition is completed.

“It’s a huge issue,” he said. “I need to trust my vendors. I trust Datto. For instance, I heard Datto’s CISO Ryan Weeks talk about security, and about how Datto is its own worst enemy when it comes to attacking its own security to make sure it works. Kaseya doesn’t do that.”

There is only one thing that can keep Grimes working with Kaseya going forward like he did with Datto.

“Kaseya needs to keep certain people in place,” he said. “I need Kaseya to keep Datto [Senior Vice President of Business Development] Rob Rae.”

Scott Stanley, IT automation engineer at Miles Technologies, a Lumberton, N.J.-based MSP that five months ago migrated to Datto from ConnectWise, agreed that the key to the Kaseya-Datto acquisition’s success will be whether essential Datto people stay on board.

He included on that list Rae, Weeks and Senior Director of Product Management Matthe Smit.

“If those people stay and get leadership roles in Kaseya, it will show that Kaseya is thinking the right way, and trying to make positive changes,” he said, noting that he’d prefer Datto to remain a stand-alone company. “If those people leave, it’s a telling sign that things are changing more towards the Kaseya side.”

Partner-Friendly Concerns, Product Overlap

Ross Brouse, president of Continuous, an East Rutherford, N.J.-based MSP that worked with Datto in the past before moving part of its business to ConnectWise, told CRN that he does not believe Kaseya to be a partner-friendly company, even though Continuous does work with some Kaseya products.

“Datto is more partner-focused, but it’s not perfect, so I left Datto,” Brouse said. “But I’ve been trying to get off Kaseya. Kaseya will cut products but not tell us in advance so we can’t prep our customers. I believe this particular transaction is bad for MSPs in Datto-land.”

Product overlap between Kaseya and Datto is an area of concern, said Dave Seibert, CIO of IT Innovators, an Irvine, Calif.-based MSP that works with both companies.

“There is a lot of product overlap,” Seibert told CRN. “It’s unclear what the road map will be with Datto’s products. As soon as it’s clear what they will keep, it will be better for MSPs’ planning. If there are six products overlapping, and you use one of them, it’s important to know if that one product will be continued so we can do strategic planning.”

Several MSPs also have taken to social media to express their concerns about the acquisition.

For instance, Daniel Bender, CTO of Syracuse, N.Y.-based MSP NetManageIT, wrote on LinkedIn, “[Kaseya] can try to buy their way out of their horrible reputation, but they will only destroy another company. Digging their own grave is an understatement. I have never seen a more unanimous discussion in my life, there are [zero] people who think this is a good thing!”

Bender did not respond to requests for comment.

Some MSPs Say Don’t Rush To Judgment

Not all Datto partners share such a pessimistic view of the acquisition. A number of MSPs reached by CRN advised against cutting ties with Datto, at least until Kaseya lays out its plans once the acquisition closes.

The acquisition is actually good news for the MSP business as a whole, said Jim Turner, executive vice president of business development at Frontline Managed Services, an Atlanta-based MSP.

Frontline is a Blue Diamond-level partner with Datto for that company’s business continuity technologies, works with Kaseya’s RapidFire and ID Agent tools, and works with ConnectWise on almost everything else, Turner told CRN.

Turner said there is a lot of hand-wringing over the Kaseya-Datto deal.

“People are saying they will pull out of [partnerships with] Datto. I don’t see it,” Turner said. “They say customers don’t want to work with Kaseya. Well, customers shouldn’t know who Kaseya or Datto are. Your clients should know your name.”

Kaseya and its investors are paying too much not to leverage Datto’s strengths, Turner said.

“The strongest RMM and PSA platform will win. No one pays $6 billion for a company to shut it down,” he said.

Turner said people are what make acquisitions like this work.

“Maybe Rob Rae will come in to fix any perception issues,” he said. “Kaseya has a lot of smart people like Dana Liedholm, who I worked with for years when she was at ID Agent.”

Phillip Walker, customer advocate CEO at Network Solutions Provider, a Manhattan Beach, Calif.-based MSP working with both Kaseya and Datto, told CRN that both companies have proven themselves to be technology creators.

“I saw Datto grow from a little-known storage provider to a mega MSP influencer, and I saw Kaseya grow from a little RMM provider to a major platform provider,” Walker said. “When you take what both have done, you see innovation.”

Walker said he sees relatively little overlap between the two companies technologies, with Datto having a strong technology base for MSPs serving customers with up to 50 seats but more limited in larger accounts, where Kaseya’s technology is strong.

Walker also hopes Kaseya will keep the “Datto” brand because there is a lot of loyalty behind it.

“And there’s something a lot of people forget,” he said. “A lot of pieces of Datto and Kaseya already work together. I think a lot of the integrations will wow people when done.”

It is important to give the Kaseya-Datto deal time to work, Walker said.

“Change brings uncertainty, and uncertainty brings anxiety,” he said. “But change also brings innovation. And the customer ecosystem is changing so fast.”

Miles Technologies’ Stanley, despite his concerns, said he is not ready to pull the trigger on moving off Datto.

“I’m not ready to set the sky on fire and quit like many others,” he said. “We have to use our brains. And I’m sure Kaseya won’t keep going the way it’s going. You don’t spend that much money and not change.”

IT Innovators’ Seibert said he will be looking for Kaseya to up its game with Datto.

“We’re accustomed to the strong culture and community of Datto and would want that to continue under Kaseya,” he said. “So we have big expectations. Datto has an incredible community because of its great culture. Kaseya has a big mission ahead of them to keep that culture and community strong. If they do, they will win.”

Mark Haranas contributed to this article.

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