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The pending merger of Datto Inc. and Autotask Corp. provides opportunities for a broader set of service provider offerings, as well as the potential for conflict with third-party vendors.
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That's the early take from channel partners on the Datto-Autotask merger news, which surfaced Oct. 26. The deal, which would bring together Datto, a data protection vendor, and Autotask, a provider of business management software for managed service providers (MSPs), is expected to close in the fourth quarter of 2017. The transaction hinges on investment firm Vista Equity Partners' acquisition of Datto and Datto's simultaneous merger with Autotask, which is already a Vista portfolio company.
The Datto-Autotask merger would affect thousands of IT services organizations and would result in a combined customer base of close to 13,000 companies.
Datto-Autotask: Melding product lines
Some service providers said they see a fit between the vendors' offerings for channel companies. Datto offers physical and cloud-based offerings for backup and disaster recovery (DR), as well as networking gear, including switches, Wi-Fi access points and a networking appliance. Autotask's software line spans remote monitoring and management (RMM), professional services automation (PSA), remote control and file sync and share.
Vince TinnirelloCEO at Anchor Network Solutions
Vince Tinnirello, CEO at Anchor Network Solutions Inc., an MSP based in Lone Tree, Colo., and a partner of both Autotask and Datto, said he sees an opportunity for services providers to standardize their business platforms.
"I think Datto complements the existing Autotask services really well and allows partners to operate from one fairly standardized platform," Tinnirello said. "Standardization is a huge benefit, and it also allows us to consolidate the number of vendors we work with."
Tinnirello said he thinks it will be a plus to have the companies' product lines under one roof. Datto, he said, "provides the best business continuity products on the market." In addition, Datto partners who are not currently Autotask partners can benefit from a unified platform that includes PSA and a "rock-solid RMM tool" that partners can use to manage and monitor Datto devices, he said.
Thomas Clancy Jr., CEO at Valiant Technology, an MSP based in New York, said he is cautiously optimistic with regard to the Datto-Autotask merger.
"I think that a bigger base of community members is beneficial for both teams," he said. He also noted "great opportunities for the account teams to cross-sell and open up new conversations" with customers.
Partnerships and integration: Challenges ahead?
Clancy, however, suggested the merger could create "some difficulty for the pre-existing partnerships" that Autotask and Datto maintain with other vendors. He pointed to Datto's relationship with ConnectWise, a provider of software for IT service providers and an Autotask competitor. In addition, he noted Autotask's growing relationship with Barracuda MSP, which provides backup technology.
In a statement, Arnie Bellini, CEO at ConnectWise, based in Tampa, Fla., said the company believes in an "open and connected ecosystem of choices." In data protection, ConnectWise offers six options for its service provider customers: Infrascale, Acronis, StorageCraft, Veeam, CentreStack and Storage Guardian.
"It seems the new Datto-Autotask merger will offer a single data protection solution," Bellini said. "That may not work out well for them."
A spokeswoman for Datto said company CEO Austin McChord has confirmed to partners in a letter that they should use any third-party integrations and vendors they choose.
"Datto will remain open when it comes to technologies used by our partners," she said, noting that the company recently announced new integrations with ConnectWise.
Patrick Burns, vice president of product management at Autotask, based in East Greenbush, N.Y., also cited openness in technology.
"The Autotask-Datto merger won't directly impact any existing vendor relationships or our approach to partnering and providing choices to customers," he said. "The combined company will continue to embrace an open platform and ecosystem, allowing partners to work with us and serve mutual customers."
A spokeswoman for Barracuda MSP said the backup provider had no comment on the Datto-Autotask merger.
MSPs, meanwhile, are considering what elements of the combined product set may or may not fit into their existing lineups.
Clancy said Valiant Technology has built its own appliance-based DR product, a move he said was in response to previous Datto pricing models not meeting his clients' huge data set needs. That said, Clancy explained that the company will "open-mindedly review the competitive advantages that Datto's product brings compared to my own."
Jeremy Koellish, principal at TekTegrity, an MSP based in San Luis Obispo, Calif., said his company uses Kaseya for RMM, ConnectWise for PSA, and Datto for backup and DR. He said his main concern with the merger is to make sure the integrations across those platforms remain in place.
Koellish said vendors looking for greater stickiness within their own ecosystems claim they will still provide integration, but he believes the best level of integration will be found within their own ecosystems. That situation may eventually cause TekTegrity to alter its platform lineup.
Another concern: His experience with other mergers and acquisitions suggests, as companies grow in size, development may slow and integrations may wind up being neglected.
Overall, Koellish said he finds the merger somewhat surprising, citing Datto's foray into software platforms and Autotask's push into IT infrastructure.
"It's a big shift and change," he said of the combination.
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