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MSP360 CEO: Kaseya-Datto Deal ‘Like Two Old Guys Getting Together’

C.J. Fairfield

'We are a full cloud infrastructure provider, so what’s nice is I’m not trying to convince somebody that they need to leave Datto or they need to leave Kaseya because this is going to be more cost effective for them. They’re coming to me already with their mind made up that they’re probably going to make a change.’ says MSP360 CEO Brian Helwig.

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For Brian Helwig, the Kaseya-Datto deal is “just like the two old guys getting together.”

“They’ve been around for a long time,” said Helwig, CEO of MSP360, a Pittsburgh-based software firm that competes directly with Datto and Kaseya as it launched its own remote monitoring and management (RMM) platform a year ago. “They’ve been acquiring companies for a long time. They’re good guys.”

In April, Kaseya announced it will acquire rival software giant Datto for $6.2 billion, which Helwig says puts MSP360 in a great position for growth.

“The new guys that have been building platforms are taking advantage of some of the latest and greatest technologies and best security, ease of use and great user experience, like MSP360,” he told CRN. “We're just going to continue to focus on that because that’s what we've been focusing on all along. It’s a great opportunity for us.”

The blockbuster deal shook the channel, causing an uproar of reactions from the MSP community. Some hated it, some loved it, while one reacted with a simple frowny face that was seen around the world.

Helwig said MSPs have seen “all these opportunities where things have not exactly gone the best way, and at the end of the day they feel like this was the case.”

“I think that a consolidation like this just really helps up-and-coming technology teams,” he said. “It gives them a great opportunity to showcase their products. It gives them a great opportunity to be invited to the conversation where maybe they may not have before. We’ve gotten a lot of leads from companies that were always on the edge but there wasn’t really a catalyst to get them to move. This sort of has been that catalyst.”

CRN spoke with Helwig about the deal and how some partners have already jumped ship to MSP360.

 

What is your take on the continued industry consolidation?

Every industry has its big guys that are out there consolidating one company into the next into the next. I was a part of an acquisition back in my heyday and I feel like when you’re bought, the innovation doesn't go as fast. One of the things that MSPs really, really like, because we talked to them all the time, is choice. They don’t like to have all their eggs necessarily in one basket or within one company.

I think a lot of it also depends on how people feel in the industry. Consolidation itself depends on the reputation of the buying organization and the purchase organization, and then from there what happens. I think the MSPs really reacted based off of what they felt as just another domino falling.

The industry will continue to consolidate and it will continue to spark more innovation and more efficiencies. Every time in my career where consolidation like this started to happen, there's been so much opportunity that’s been left behind, it’s fantastic.

 

How does this acquisition make the market more competitive?

It definitely opens a lot of opportunity for MSP360. Maybe before, I may not have been invited to the conversation because I didn't have one of those old appliances that sit on people’s desks and run. We are a full cloud infrastructure provider. What's nice is I’m not trying to convince somebody that they need to leave Datto or they need to leave Kaseya because this is going to be more cost effective for them. They're coming to me already with their mind made up that they’re probably going to make a change. At least they're open to the conversation.

What's interesting is it also is allowing MSPs to compare products they may not have in the past. Something that everybody keeps telling us, and we’re hearing more and more at the trade shows, is, 'Oh you guys now have an RMM? What does this connect product do?’ And we say, 'It's very similar to TeamViewer and it’s much more cost effective and secure.’ So now we're starting to talk about not only just the day-to-day backup things that we used to do for data protection, but we’re also talking more about RMM. We’re talking about the security of our platform as well as MSPs being secure and them being able to leverage tools within our platform to help them be more secure.

 

How has the Kaseya-Datto deal directly impact your business?

We’ve had just a tremendous response in bound. At least when it came to VSA we were already in those deals. Probably more often than not, we were in those deals with Datto. When we launched our RMM shortly after, we were both going after the same market. This just has really helped and it’s been a great catalyst and a great opportunity for us. We're going to continue to stay focused on our products, our user experience and continue to make sure we’re delivering exactly what the MSP needs.

 

When I spoke with Kaseya CEO Fred Voccola he said that all Kaseya’s products are 30 percent less than competitors. How does MSP360’s pricing stack up to Kaseya and Datto?

It’s a lot less. The MSRP of a server at MSP360 is $10 per month. There’s no contract for an MSP, it’s month-to-month. We pride ourselves on the fact that if we deliver best-in-class service with a best-in-class product there's no reason to leave. We back that up by saying there are no contracts. We’re never going to ask anybody to sit down and sign a three-year deal or a two-year deal. If they want to sign a one-year deal because they love the product, do they get an additional incentive for doing so? Absolutely. Is it required? No. The only requirement we have at MSP360 for MSPs is a five-license minimum. We have a lot of MSPs that will come in and they'll start off with one server for $10 and they’ll pick up four desktops. Those desktops are $5 each, so you're talking about a $30 per-month bill. It’s free for the first 30 days so you can get everything up and running. We give them full support. They get to go through our MSP hotline so that if there's any other business customer that bought through a reseller or happened to buy through another MSP, they get priority in the support queue. Once they get past those five licenses we give them discounts based on how much they spend, and those discounts can go as high as 48 percent off.

 

How does MSP360 platforms compare to the Kaseya and Datto platforms?

We are doing a lot more with the RMM. We were beating Kaseya on the RMM side quite a bit prior to this acquisition happening. We also started to see customers coming from ConnectWise where if they lost some of their automation or their automation investment was gone, then they would look pretty heavily at MSP360, and they would purchase. We have been doing releases of our RMM about once per month. [The feedback we get from MSPs] drives not only what our dev teams are working on but also what our product management teams are focused on as well as making sure that we continue to meet the market demand.

I would say our RMM, we launched it a year ago, is 70 percent of the functionality for about 30 percent of the cost. It's $60 per month with unlimited endpoints per admin. That’s another part of our pricing model. It’s different than Kaseya or Datto which is you get to dictate who your RMM admins are. If you have five admins on your team, and only two of them are going to be using the RMM, we trust you. It's only two. The other individuals, maybe one of them might be a backup admin but they won’t cost you anything. That product is priced per endpoint. The other two guys may be their tier-one helpdesk. We do it this way so that the MSP can pick and choose how they want to scale. It's not fair to pay for a bunch of services that you don’t need.

 

You mentioned the partner reaction to the Kaseya/Datto deal. Were you surprised by the MSP community's response?

I was not surprised. A lot of MSPs left Kaseya and went to Datto after the Kaseya breach. They felt safe that everything was going to be okay. Datto was a publicly-traded company and this was going to be the platform that was going to continue to grow and evolve. There was going to be somebody there that’s going to be accountable. You had a chief security officer that was sitting there day in and day out, looking at the platform and what was happening. All of a sudden, the acquisition happened and the next thing you know there's just this big backlash. I think they were just shocked that Kaseya had bought Datto. I think they thought it might have been the other way around one day, so they were pretty taken aback.

 

Have you seen this acquisition as an opportunity to go after some of those partners or are they coming to you?

We’re doing both at the same time. We’ve been doing outreach for a long time going after any Datto customer, any Kaseya customer. Those are the big guys in the room. When you're going after a billion-dollar corporate gorilla you take the swipes that you can and start to cut them from the bottom and work your way up. I will say that this kind of transition has some larger MSPs giving us a call. I have no idea how many times in the last [month] that I’ve heard, 'I looked at you guys about five years ago when you were CloudBerry Lab and wow, this product is completely different’ It's nice to hear that feedback. We’ve got a couple of Fortune 500 companies that are underneath our belt which is starting to grow. I'm excited about the challenges that are in front of us and I’m excited to continue to deliver best-in-class products and services.

 

Have you had any Kaseya or Datto customers officially sign on with MSP360 since the acquisition was announced?

Oh, absolutely. I would say it’s probably less than a dozen that have already converted. For anybody that is a Kaseya or Datto customer, even if they have a three-year contract we want to talk to them because if they have less than a year we’ll buy their contract out. They can use MSP360 for free, we’ll help them transition and we’ll help them reduce their costs where they can by reducing their data footprint with those organizations. When their contract is up, they’ll start paying for our licenses and services. If [they still have] more than a year [left in their contract] then we have a lot of incentives that we can use to bring them over and help them reduce their costs and improve their margins.

 

What is your message to partners that are considering other vendor options?

I would say two things. If they have not looked at MSP360 in the last 18 months, they definitely need to look at them now. Anybody that has never heard of or has not actually taken a look at MSP360, now is the time to get in because we're going to continue to stay focused on the MSP. That’s our market. That's who we care the most about. All of our processes, all of our payments, the way we contract, the way we do business, it’s all built and designed for their market. We’ve locked our prices. We do increase them, but we increase them only one or two percent. If you lock in this year's price book, that price book stays their price book pretty much for the life of their time with MSP360. We did have one price increase this past year but the year before that was 11 years ago. Give us a shot. Bring us to the to the dance, bring us to the game and let us show you how well we can do. I’m sure you're going be impressed.

 

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