Datto Looks to Take CapEx Out of Cost Calculation

New CRO Brooks Borcherding says deep cuts in hardware list costs will add predictability, advance the move into an as-a-service future.

Lorna Garey

January 6, 2016

2 Min Read
Datto Looks to Take CapEx Out of Cost Calculation

**Editor’s Note: Click here for the photos we took inside Datto’s new downtown Boston offices.**

Datto announced Wednesday significant reductions on hardware prices for its flagship SIRIS suite; the devices power the company’s hybrid data backup, recovery and business-continuity solutions.

Datto's Brooks BorcherdingBrooks Borcherding, Datto’s newly minted chief revenue officer, told Channel Partners that the lower across-the-board pricing is about making it easier for partners to do business with Datto while moving the company toward an as-a-service model.

“I started at the end of November, just in time for Cyber Monday,” says Borcherding. “That was one of the biggest sales days in our history, driven by a significant promotion.”

But while Datto has long used special deals to boost sales, this model could be frustrating for partners because pricing for hardware was inconsistent.

The cuts apply only to the SIRIS appliances, which Datto manufactures in its Monroe, Connecticut, facility. Borcherding says that an on-shore production model helps the company tailor its hardware to the needs of customers while better managing costs by applying economies of scale. For now, the company’s GENISIS virtual appliance is not included in the cost reductions, even though Borcherding says the virtual appliance is continuing to gain share.{ad}

“Our core business has been anchored by the hybrid offering,” he says. “The appliance is doing the onsite backup and virtualization as well as replication to the cloud, with business continuity from the cloud as well. That continues to be the core offering.”

List pricing for hardware is down 30 to 50 percent, with additional discounts of up to 30 percent available for one-, three- and five-year term commitments.

“We want to make it as easy as possible for our partners to offer Datto to their customers,” said CEO Austin McChord in a statement. (Click here for Channel Partners’ recent Q&A with McChord.) “So rather than offer limited-time promotional discounts throughout the year, we’ve decided to offer consistently lower pricing across the board on our flagship product line.”

Overall, Borcherding says Datto is following the industry to a more services-based approach by lowering the capex requirements for buy-in. “By us taking a significant reduction in capex, that’s moving us more and more to a service or opex-based acquisition model, which I think is where most of the world is going.” No doubt partners will agree.

In his new role, Borcherding, who is based in the company’s Norwalk, Connecticut, office, says his goals – besides the obvious tending of revenue – are to increase Datto’s profile, brand recognition and share of the backup, recovery and business-continuity solution marketplace. He has a background in sales, marketing and business development and has spent more than 25 years in the IT services industry, including stints with Accenture, Avaya, Cisco and NaviSite.

Follow executive editor @LornaGarey on Twitter.

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