Lynn Haber

**Editor’s Note: Please click here for a recap of the biggest channel-impacting merger and acquisition news from August.**

In a one-two punch, investment firm Vista Equity today announced the acquisition of Datto, the data-protection platform vendor, and simultaneously the merger of Datto with Autotask, the IT business management company, which Vista Equity acquired in 2014. Today, the companies deliver their solutions via more that 13,000 MSP and IT service provider (ITSPs) partners who deliver services to more than a half-million small and medium-size businesses (SMBs), in 125 countries worldwide.

The impending merger of Autotask and Datto is big news for MSPs and ITSPs who may see a combined organization as a more robust, single go-to vendor or as just more disruption in a market that’s full of it.

Autotask’s Patrick Burns

Of course, the vendors see the merger as good news for their partners. Looking at the big picture, the deal will bring together two suppliers with complementary products, complementary geographic coverage, and that are both popular with MSPs and ITSPs. For MSPs and customers, it’s a single vendor with big growth opportunities in mind.

“These guys [MSPs and ITSMs] tend to be very busy operationally and anything you can do to increase productivity and efficiency, and provide them with deep trending analytics about how the business is performing, helps them improve their business,” Patrick Burns, vice president product management at Autotask, told us. As partners watch this space, they can expect to see an integration and unification strategy that will allow them to take advantage of those benefits at the interface and database level, a seamless user experience, as well as consolidated analytics, he added.

A combined company will create a single provider able to offer MSPs and ITSPs solutions for operations through service delivery, including backup and disaster recovery, networking continuity, file sync and share, remote monitoring and management (RMM) and professional services automation (PSA).

MSPAlliance co-founder Charles Weaver views the Autotask-Datto merger as great for the industry.

MSPAlliance’s Charles Weaver

“It’s when you have a lack of disruption, and stagnation — that’s never good. I’m always in favor of pushing the envelope. That’s the only way the industry evolves, and MSPs can deliver better services,” he said.

He points to five years ago as the beginning of when money started being invested into the MSP tool vendor community, i.e., the investment by Insight Venture Partners in Kaseya, AVG Technologies’ purchase of Level Platforms, and the SolarWinds acquisition of N-able. Prior to that, the market was stale and MSPs were complaining.

“The positive side of this deal is the potential for greater innovation, greater investment in R&D, the ability to push and expand the tool sets — Datto on the backup side, and Autotask, they’ve been around longer as a ticketing platform, less mature on the RMM side. So I think there’s a lot that can be done to invest in the tool set all around. I’m guessing there’ll be …

… integration between Datto and Autotask technology, so if you’re using those tool sets, that’s a really positive thing,” noted Weaver.

The Autotask-Datto merger will inevitably be unsettling for partners who do business with one or both companies. But Burns says that their partners won’t see their businesses disrupted, and they can expect business as usual.

“We have very complementary product sets and there won’t be any forced migrations or anything like that. They can carry on using our products and taking advantage of the services and after-market benefits we offer,” he said.

At the same time, neither Burns nor Peter Raulinson, chief marketing officer at Datto, could offer up a road map for what a combined Autotask-Datto business means to MSPs or ITSPs. With the ink still wet on the paper, it’s no surprise that there isn’t a joint plan yet; however, Burns expects to have specifics into the company’s forward-looking plans in about three months.

“We’ve always given our customers choice, and this [deal] doesn’t negate MSPs’ ability to have choice,” Raulinson told us.

How the creation of this new big company may impact other players in the market, such as Kayesa, ConnectWise and SolarWinds, is yet to be seen. In June, Thoma Bravo scooped up RMM vendor Continuum.

“Kayesa and ConnectWise are probably saying, ‘What now?’ and are furiously planning their next strategy, because this is going to mean a big, monstrous company. There [are] a lot of Autotask users out there and a lot of Datto users out there, and more importantly, a lot of those users who also use ConnectWise and Kaseya — and that’s where the vulnerability comes in,” said Weaver, who added that there are a lot of happy ConnectWise and Kaseya customers.

Indeed, ConnectWise is promoting its multi-solution strategy as this news breaks.

“Today’s Datto-Autotask merger announcement is exactly what we expect to see in a rapidly expanding ecosystem,” Arnie Bellini, ConnectWise CEO, told Channel Partners. “ConnectWise’s acquisition strategy is different. We are focused on building a completely integrated business platform for technology solution providers of all kinds, including MSPs. … It seems the new Datto/Autotask merger will offer a single data protection solution. That may not work out well for them. Regardless, we congratulate them and welcome the competition. It makes all of us better.”

Is having an integrated Autotask-Datto backup solution enough to draw in new partners? Time will tell.

When the deal closes, Austin McChord, Datto founder and CEO, will head up the new organization, serving as CEO. Mark Cattini, Autotask CEO, will work closely with McChord and the combined team as a strategic adviser to the board of directors.

The deal is expected to close in the fourth quarter.