Kaseya plans to invest in and support Datto's MSP products after the pending $6.2 billion acquisition closes later this year.
The companies offer similar product sets with offerings including remote monitoring and management (RMM) and professional services automation (PSA). Kaseya and Datto individually built product suites -- often through acquisition -- that automate the core elements of a managed service provider's business. Kaseya's Datto acquisition agreement emerged April 11 and is expected to close in the second half of 2022.
Kaseya, once combined with Datto, will provide "multiple solutions" in areas such as RMM and PSA, said Fred Voccola, CEO of Kaseya. The company won't force customers to abandon their preferred software, he added.
"We will support all products moving forward," Voccola said.
Products acquired through the Datto transaction will be integrated into Kaseya's IT Complete platform, he noted. The platform houses Kaseya's offerings for MSPs and includes previous acquisitions such as IT Glue, a documentation software provider.
"Our job has been to let people know this is our plan," Voccola said, acknowledging that change -- such as an acquisition -- brings fear, uncertainty and doubt.
Uncertainty colors industry reactions to Kaseya's pending acquisition of Datto: 61% of the MSPs polled in a Canalys survey said they needed more time to assess whether the transaction would be a good or bad development. Canalys, a technology market analyst firm based in Singapore, surveyed 153 MSPs worldwide. A quarter of the respondents called the deal a "terrible move," while 14% viewed the acquisition as a "great move," according to Canalys.
Charles Weaver, CEO and co-founder of MSPAlliance, an association based in Chapel Hill, N.C., that represents MSPs, noted the industry's ambivalence. MSPs want the Datto acquisition to benefit the channel community, but question the reasoning behind it, he said.
"I just think the MSPs do not see the logic in the deal," Weaver said. "This does not seem like the Datto-Autotask deal, or the ConnectWise-Perch Security deal, which were more strategic acquisitions."
Weaver said he believes Kaseya's plan to purchase Datto reflects a desire to pull in service providers yet to commit to one of "big three" MSP platforms, which, post-acquisition, would be Kaseya-Datto, ConnectWise and N-able. The deal would also let Kaseya shore up market share, with Datto selling mainly to smaller MSPs and Kaseya working with larger service providers.
Fred VoccolaCEO, Kaseya
"This [acquisition] feels more like a land grab, which is fine if the MSPs are treated well and the innovation continues," Weaver said. "If innovation stops, then you'll have MSPs start to look elsewhere -- even to the smaller secondary and tertiary RMM markets, which are really picking up a lot of steam right now."
Whether a software company can maintain dual products over the long haul is another question. "I spent a number of years on the application software side, and to me, it doesn't seem like a viable strategy to support two sets of products long term, economically and operationally," said Kevin Rhone, practice director of channel acceleration at Enterprise Strategy Group, a division of TechTarget. "There will be pressure internally, from customers and partners to move to one product-code base and feature-function set to take advantage of improvements and innovations without having to develop them twice."
Waiting for the details
The industry must wait for the details regarding Kaseya's tactical plans for Datto, as the deal is still in the works.
In the meantime, Voccola said the company stands ready to invest in an expanded product portfolio. He said spending perhaps an extra $20 million a year to maintain the additional products is less expensive than alienating customers by forcing them to switch from one software tool to another. The investment required to offer multiple products in a specific area would not be large for a company like Kaseya, Voccola added.
As for why Kaseya is attracted to Datto, Voccola cited Datto's "great products," which include backup offerings, routers and switches, as well as RMM and PSA. He called Datto's networking lineup "the best-kept secret in the industry, arguably" and also cited the company's culture, innovation, and customer support and success capabilities.
Oracle EBS users still lag on upgrades
Claremont, an Oracle MSP with offices in Guildford and Newcastle, U.K., polled Oracle E-Business Suite (EBS) customers and found that 47% have not upgraded to release 12.2, despite a January expiration date of release 12.1 support. Two-thirds of the respondents said they plan on upgrading by the end of 2022. The EBS application set covers functions such as CRM, ERP and supply chain management.
Businesses yet to upgrade have taken temporary measures to maintain their EBS R12.1 deployments while they mull an upgrade. "The majority have gone with third-party support to plug the gap," said Mark Vivian, CEO of Claremont.
Some movement on upgrades has occurred since 2020, when a Claremont customer survey revealed that nearly 70% of respondents had not upgraded to R12.2.
Oracle users now face another end-of-support deadline: Extended support for Oracle Database 18.104.22.168 will expire at the end of July. Vivian said most U.K. customers are using that version or previous releases. Customers will need to upgrade to at least Oracle Database 19c or run the risk of security breaches once support expires.
Channel program launches and updates
- BlackCloak, a digital executive protection provider in Orlando, Fla., unveiled its North America Partner Program for MSPs, resellers and other channel partners. The company's SaaS offering aims to protect the online privacy, personal devices and home networks of corporate executives. BlackCloak earlier this year conducted a soft launch of the program, partnering with Hippogriff, Level Solutions Group, EverSec Group and Panacea Solutions.
- Kurmi Software, a unified communications management and provisioning software vendor based in France, unveiled its Kurmi Advantage Partner program for value-added resellers, systems integrators and delivery consultants across North America; Europe, the Middle East and Africa; and Asia Pacific. The program offers three levels of tiered membership benefits: registered partner, business partner and premier business partner. Benefits include a new partner portal, sales and co-marketing support, product discounts, and demo lab licenses.
- Reltio, a data management platform provider with headquarters in Redwood Shores, Calif., updated its Reltio Partner Network with a new tier system and more resources, including training and certification programs, enablement content, and marketing collaboration. The provider also announced the Reltio Partner Advisory Council, which will allow partners to give feedback and shape Reltio's direction.
- HYCU, a backup company based in Boston, launched ransomware assessment and recovery services for partners, as well as a certification program for MSPs, managed security service providers (MSSPs) and other service providers. The certification program uses HYCU's R-Score service, which rates an organization's ransomware attack readiness based on an assessment. The ransomware services and certification program are among the updates to the HYCU Protégé multi-cloud data protection software.
- RackTop Systems, a cyberstorage provider in Fulton, Md., expanded its channel initiative, adding MSP and MSSP programs. The company also added partner training, incentives and consumption-based product offerings. In addition, Clarke Woodfin has joined RackTop Systems as channel manager. He previously led channel programs at NetApp and Quantum.
Partner roster updates
- Cloud distributor Pax8 expanded its offerings, including products from Acronis, Bitdefender and SentinelOne, to MSPs in Australia and New Zealand. The Denver-based company announced three members of the Pax8 Asia leadership team: Chris Sharp, senior vice president; Tracy Lacewell, vice president of sales; and James Bergl, vice president of business development.
- Navisite, a managed cloud services company based in Andover, Mass., teamed up with Stripe, a financial infrastructure platform. The partnership aims to help companies speed up their digital transformations by delivering new e-commerce experiences and revenue streams.
- TBI, a technology brokerage firm in Chicago, added EnTelegent Solutions and Inoria to its supplier portfolio. EnTelegent Solutions provides managed services, network services and a proprietary lifecycle management platform. Inoria offers contact center services and strategic consulting.
- Cloudreach, a multi-cloud services provider based in London, rolled out Sunstone, a software platform for modernizing in-cloud applications. Global systems integrator Atos acquired Cloudreach in January. Cloudreach now operates as an Atos company.
- Otava, a hybrid cloud solutions provider in Ann Arbor, Mich., debuted a Managed Azure Cloud service. The managed service aims to help customers overcome the complexities of Azure and public cloud infrastructure, according to Otava.
- Telos Corp., a cybersecurity solutions provider in Ashburn, Va., launched an offering to automate Cybersecurity Maturity Model Certification (CMMC) assessments. The company's Xacta 360 Lite for CMMC Virtual Machine Infrastructure is available in Microsoft's Azure Marketplace.
- Redstor, a backup and recovery platform provider, appointed Mike Hanauer as chief revenue officer. His previous channel experience includes executive roles at Skout Cybersecurity and Datto, where he was vice president of U.S. sales. Redstor, based in Reading, U.K., markets to MSPs.