What Kaseya acquiring Datto means for MSPs big to small
In the latest large-scale acquisition in the IT channel, Kaseya has acquired Datto in a landmark $6.2 billion all-cash deal.
This is one of the largest signs of consolidation in the channel to date, which has brought around a cloud of questions, namely what this means for the channel and MSPs of all sizes.
Kaseya has been on the acquisition path for a while
Datto is just the latest acquisition from Kaseya, but they have been carving a path with acquisitions of popular channel vendors for years, including IT Glue, RapidFire Tools, Unitrends, and RocketCyber, among others.
This string of acquisitions, especially of startups or smaller companies, has chaffed some smaller MSPs who enjoy the competitive pricing and innovation of channel-disrupting startups.
It’s not all positive coverage for Kaseya
Before the acquisition, Kaseya’s most recent spotlight in the news cycle was because of a ransomware attack that impacted as many as 1,500 organizations. This attack focused on a security flaw in Kaseya’s Software that ransomware organization REvil used to break into the infrastructure of 50 managed services providers using Kaseya’s solutions.
This attack forced Kaseya to take down some of its services including SaaS servers and virtual systems administration for nine days in 2021, and even forced an incident report from the Cybersecurity & Infrastructure Security Agency.
Kaseya lost some face and faith among the MSP community, and to follow such a major incident with an acquisition of another large player in the IT channel had people concerned about the larger security posture of MSP management software.
Who is consolidation good for?
In the US especially, large corporations have been pushing the limits of consolidation. Instead of winding up new solutions in-house, the largest names out there instead buy out new or established businesses as a way to leverage their way into new channels.
Whether it’s consumer tech acquisitions like Apple and Beats by Dre, or entertainment mergers like Disney and Fox, we’re seeing fewer, larger companies spanning more media and product categories than ever.
In the case of Kaseya buying out Datto, there are plenty of benefits on paper. There are also plenty of concerns.
What does Datto bring to Kaseya’s software stack?
There is plenty of overlap between the solutions offered by Kaseya and Datto, including RMM, PSA and Network monitoring. Datto does bring one important new solution to Kaseya: business continuity and disaster recovery.
There is more to consider than new solutions. Since Kaseya has said they will maintain the Datto brand and services, we can expect that integrations between Kaseya and Datto products will continue to expand and improve.
This is probably the most valuable benefit MSPs will experience. Better integrations can mean easier management and more time saved for MSPs with a lot of clients. It’s important to note that this is an expectation that may or may not become reality.
Is this good for MSPs?
Alright, this is the big question and the answer can get a bit in the weeds. If you’re an MSP that already uses a lot of Kaseya and Datto solutions, then this will likely be a net benefit for your business. Better functionality, more integrations, and streamlined support can be a game-changer if already using their infrastructure.
Where it becomes a lot more murky is for MSPs that don’t use Kaseya or Datto products, or MSPs that only used Datto.
For MSPs using Datto products but not Kaseya products, there is a lot of uncertainty about the future quality of the products their using. There is also the question of what contracts will look like, as Kaseya is becoming somewhat infamous for their aggressive contract terms, including a 3-year auto-renewal with a narrow window to cancel.
What about MSPs that don’t use Kaseya or Datto solutions? This acquisition certainly narrows the field of competitors. For many of the services on offer between these two brands, including RMM and PSA software, there simply isn’t a ton of competition. Some MSPs are scrambling to find smaller channel disruptors to move to in an effort to avoid Kaseya.
Some popular disruptors in the conversation include SuperOps.ai (who quickly launched an ad campaign targeting these MSPs looking to avoid Kaseya) and NinjaOne, among others.
A quick summary of the pros and cons of Kaseya acquiring Datto
The good
Better integrations between Datto and Kaseya products
Streamlined support
Larger service offering for MSPs familiar with Kaseya or Datto
The less good
Uncertain future for quality/contract terms of Datto products
A big Kaseya competitor has been removed
More difficult for MSPs to find smaller disruptor channel vendors
