Partners and analysts chime in on Kaseya purchase of Datto

A major announcement last month involving managed service provider Kaseya purchasing former rival Datto in a deal estimated to be worth US$6.2 billion appeared to catch many channel partners and the analyst community totally by surprise.

To describe the April 11 acquisition as a “shock and awe” move is not an understatement, judging by how some members of the channel, particularly in the U.S., but certainly everywhere the two companies do business reacted to the deal.

Some Datto channel partners loudly complained about the merger in one published report, and that reaction quickly led Kaseya chief executive officer Fred Voccola, to respond that he “was firmly committed to investing in Datto’s strong channel culture, product set and brand,” and that “we’re not buying Datto to destroy it.”

Fred Chagnon, principal research director at Info-Tech Research Group in London, Ont., agrees, saying that for at least the short-term, they bought the company to keep it alive.

Ultimately though, he added, Kaseya will not be able to sustain two professional service automation (PSA) or remote monitoring managing (RMM) offerings.

“There’s a lot of overlap in those two ecosystems and they’re not going to sustain that for a very long time, but when he says that, what he’s saying is, ‘we’re not closing the doors on Datto tomorrow and expecting everybody to just become Kaseya customers.’ Over the long haul, absolutely they are, but that doesn’t fit the term destroy.

“Ultimately, what they want are for all the current Datto customers to become Kaseya customers. But doing that is not an overnight thing. That’s not how you win the loyalty of the ecosystem you just invaded.”

Channel Daily News reached out to a several Datto resellers for reaction to the sale, including David Rashkovan, president of Rational Business Solutions based in Markham, Ont., who, while surprised by the sale, is planning to take a wait-and-see approach.

“Obviously, as you would expect, when we heard about Datto being acquired by Kaseya for a monstrous US$6.2 billion, we said, ‘Oh my God, what does this mean?”

Upon further analysis of the deal that is expected to be approved in the second half of this year, Rashkovan added “my initial reaction was ‘let’s not make any quick moves or do anything crazy.’ There were people who are saying, right away, ‘I’m immediately investigating other options. And I’m divesting of my investment in Datto.’ I did not say that at all, at all, at all.

“But I’m not saying that my eyes aren’t wide open. My eyes are wide open and I’m going to be watching carefully. When I look at the people that I pay every month, Datto was the second largest company that I pay every month.

“I will tell you it would be a significant undertaking to make any type of change. And why would I make a change unless I see something heading in a direction that I am concerned with. So far, I’m not.

“Until Kaseya-Datto does something to have a negative impact on me, I am not making any moves.”

Chagnon, meanwhile, said it’s “probably insensitive to use metaphors like ‘an invasion’, but it’s a lot like that, but not in a hostile way, I think in a very business kind of way.

“Kaseya is taking on Datto’s large partner base and bringing them into their ecosystem so that they can basically go head-to-head with ConnectWise. It will be interesting to see next year if we see some reports on what is the breakdown of market share and when we see that it’s not going to be ConnectWise and the Seven Dwarfs anymore. It will be very much these two companies.”

As for the acquisition itself, he said in his career as an analyst there have only been three that surprised him: Dell Technologies purchase of EMC, IBM buying Red Hat and the Kaseya purchase of Datto.

“I didn’t see Datto as an acquisition target simply because they were public,” said Chagnon. “It’s a lot rarer to see that happening, but if either of those two companies acquired any other company, such as Datto buys Synchro, or Kaseya buys Ninja RMM or something like that, I would find that that’s interesting, but would not fall out of my chair. This was pretty significant.”

The sale, he said, was a “land grab in terms of customers. Anybody who has already invested in the Datto ecosystem is now a Kaseya customer.”


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Paul Barker
Paul Barker
Paul Barker is the founder of PBC Communications, an independent writing firm that specializes in freelance journalism. He has extensive experience as a reporter, feature writer and editor and has been covering technology-related issues for more than 30 years.

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