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Kaseya CEO Fred Voccola: ‘We’re Not Buying Datto To Destroy It’

‘’We’re spending $6.2 billion to buy an awesome company. The last thing that we want to do is make it unawesome. When we buy companies, we buy them for a reason. They’re great. We don’t [mess] with the culture and we don’t change the brand,’ says Kaseya CEO Fred Voccola.

Kaseya CEO Fred Voccola told CRN he is firmly committed to investing in Datto’s strong channel culture, product set and brand in the wake of his company’s planned market-rattling $6.2 billion acquisition of the MSP highflier.

“We don’t buy companies to gut them for profit,” said Voccola when asked to respond to MSP fears that the acquisition will have a negative impact on Datto. “Every acquisition we’ve done, we’ve doubled or tripled or in some cases quintupled the amount of investment in the products and support in the business. We’re not buying Datto to destroy it. We’re buying Datto because we want to get better at that, and Datto is the best, so we buy the best.”

Voccola said Kaseya will keep the Datto brand and has no plans to shutter any Datto offices. “We’re spending $6.2 billion to buy an awesome company,” he said. “The last thing that we want to do is make it unawesome. When we buy companies, we buy them for a reason. They’re great. We don’t [mess] with the culture, and we don’t change the brand. We don’t change the companies just to change.”

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

Kaseya has a strong track record of investing in the companies that it has acquired, said Voccola. “Every single company that we bought over the last seven and a half years since I’ve been here, we followed the strategy of integrating the products, keeping the culture of the company we bought and investing more in the R&D in support of the companies we bought,” he said. “We’ve made every product we bought more affordable, and the more affordable the technology is, the more room there is for MSPs to make profit.”

In a post on its website, Kaseya said its acquisition track record includes additional R&D investment, new hires and overall lower prices for MSPs on all the software companies it has acquired. One example: Kaseya has invested $50 million in additional R&D in IT Glue since it acquired the popular IT documentation software provider in 2016. That investment has yielded 90-plus major features, 35 new integrations and 1,625-plus software releases, Kaseya said.

In addition, since IT Glue was acquired the number of employees has increased from 34 to 181 with two original executives from IT Glue still on the Kaseya team: Nadir Merchant, general manager of IT operations, and Holly Pateman, senior vice president of product marketing.

All in all, IT Glue has experienced 375 percent sales growth since it was acquired, as well as lowered pricing on the product set, Kaseya said.

Among its other acquisitions, Kaseya said it has invested an additional $13 million in R&D for ID Agent, resulting in 250-plus major new features, 14 new integrations and 72-plus software releases; $14 million in additional R&D investment for RapidFire Tools, with 235-plus major new features, 17 new integrations and 288-plus software releases; an additional $5.5 million in R&D investment for RocketCyber, with six major new features and 26 new releases; and $28 million in additional R&D investment for Unitrends, with 250-plus new features, eight new integrations and 129-plus software releases.

Kaseya has historically charged about 30 percent less than its competitors for all the different technological areas it provides, and combined with Kaseya’s support programs, its MSP partners tend to be the most profitable, Voccola said.

Kaseya is committed to supporting all Datto’s products for the simple reason that it doesn’t make financial sense for the company to risk customer relationships by not investing in them, Voccola said.

“Will we have two PSAs?” he said. “Yes, we will. ... The financial cost to maintain multiple products in a similar category, it’s not a lot. If it costs an extra $20 [million] or $30 million a year, that number sounds enormous, but it’s nothing for a $1.5 billion company. It’s a lot cheaper than [ticking] off a few thousand customers.”

Kaseya also has a history of lowering, not raising, prices for the technology it acquires, Voccola said.

“I can’t tell you, due to legal reasons, what we will or will not do [with Datto], but I can say that every single acquisition we’ve done, every one of them, we’ve done them all the exact same way,” he said. “We’ve never raised prices; we’ve done the opposite every single time. Very often the past is the best indication of the future.”

Voccola acknowledged there are concerns among Datto’s MSPs that the Datto culture might disappear after the acquisition closes, but he said concerns are way overblown. He said he would like talk to “each and every” partner who has expressed concerns about the deal.

“Human beings don‘t like change,” he said. “When change comes, fear, doubt and uncertainty set in. We compete with 200 to 300 different software companies, and every one of our competitors is trying to sow fear, doubt and uncertainty. I don’t blame them. I would do the same thing. I’d be more than happy to talk to anybody. Anybody can reach out and have a conversation with me. We are not going to change what makes [Datto] great. Hopefully we’ll reinforce it and apply what makes them great to other areas of our company, just like we’ll apply things that make IT Glue great to Datto.”

About 8,000 of Kaseya’s total community of 17,000 MSPs are Datto partners already, Voccola said. And contrary to what may be posted on Reddit or other social media platforms, the MSPs who have talked to Voccola since the planned acquisition was unveiled have been positive about the deal, he said.

“Most people said this is great because they know what Kaseya has done,” he said.

That said, Voccola said he legally has not yet been able to reach out directly to Datto MSPs to address their concerns. “We wouldn’t do that until the deal closes. ... It would be illegal if we reached out to those customers,” he said.

Instead of wringing hands over the post-acquisition future, MSPs should be celebrating it because of the increased innovation that will result, said Phillip Walker, customer advocate CEO at Network Solutions Provider, a Manhattan Beach, Calif.-based MSP working with Kaseya.

“We are in the business as MSPs to support customers,” Walker told CRN. “We need better tools faster. We need innovation to stay ahead, and not just to be table stakes. We need security for a changing insecure world.”

It is good to see Voccola open up on questions surrounding the acquisition, Walker said.

“I need to know what Kaseya and Datto are going to do to help me to give me a better path to support my customers and lower my costs,” he said. “Those conversations haven’t been happening. We’re getting lost in questions about brand loyalty.”

When Voccola said that Kaseya has a history of keeping and investing in acquired companies and platforms, he wasn’t kidding, Walker said.

“Kaseya keeps things in place,” he said. “IT Glue still has its own conference. Graphus[, an anti-phishing software company acquired in 2020,] is still Graphus. Kaseya has a history of keeping things intact. But we need to see what will happen soon. We need to see the integrations. Before IT Glue was acquired by Kaseya, it was valuable. But now customers get so much more value from IT Glue if using Kaseya’s PSA.”

Jason Wright, CEO of Avatar, a Houston-based MSP that uses both Datto and ConnectWise offerings, said he was heartened to hear that Voccola is aiming to invest in the Datto portfolio and support multiple PSA tools.

“Fred is saying all the right things, but I expect him to say all the right things right now,” Wright told CRN. “The first 180 days are really where we are going to see what the difference will be with Kaseya as the owner of the business.”

Kaseya deserves the benefit of the doubt as it brings Datto under its umbrella, said Wright.

“I’m an optimist,” he said. “I’m always willing to give people a chance to see what they do. They are probably in a ‘seek-to-understand’ phase with Datto right now. I don’t imagine they are going to just come in and start chopping things up. I’m going to give them the opportunity to keep my business.”

The ability to foster the Datto MSP-centric culture is key to the success of the combined company, said Wright.

“I want to know if they are going to keep Datto 100 percent channel-focused,” he said. “I want to know how they are going to support and interface with the channel, and whether they are going to go direct with enterprise accounts with the Datto product line.”

Steven Burke and Joseph F. Kovar contributed to this article.

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