Datto's Future Unfolds: Kaseya Buys Connecticut MSP Vendor for $6.2 Billion

Datto's Future Unfolds: Kaseya Buys Connecticut MSP Vendor for $6.2 Billion

By Erik Linask

Last month, rumors began circling about the future of Norwalk, Connecticut-based security, data recovery and backup vendor Datto.  Late last month, Datto’s channel head Eric Torres left the company, leaving its MSP business with a big hole to fill.  Today, following weeks of speculation about a potential private equity buyout, we have an answer:  IT software provider Kaseya is buying Datto for $6.2 billion.

The combination of the two MSP-focused vendors will create an entity that, based on current employee counts, will make the combined entity the largest in its competitive landscape – which includes companies like ConnectWise, N-able, NinjaOne and others.

“Datto has always been committed to creating world-class technology for SMBs and delivering it through our global network of MSPs to align our growth with the channel,” said Tim Weller, CEO of Datto.  “Combining with Kaseya brings together a broader array of technology products to create additional opportunities for MSPs.  I’m encouraged by the continued investment in the rapidly-expanding global MSP community, and this transaction is another important validation of the channel.”

Indeed, the market serving MSPs has seen plenty of consolidation over the past several years as the MSP space has continued to grow and vendors and MSPs alike have sought to expand their market penetration.  With the acquisition, Kaseya brings more than 18,000 MSP partners under its fold (not account for existing overlap, which is likely to be sizable given product overlap).  This move should help it continue its growth, which saw the company grow by 25% from 2020 to 2021.

The deal follows on other significant Kaseya acquisitions last year, including managed SOC provider RocketCyber and business transformation company TruMethods.  These deals helped Kaseya build out its MSP solution portfolio.  The Datto deal, on the other hand, feels more like a customer grab.

Both Kaseya and Datto have strong customer bases and many are likely to embrace this move and will look forward to what Kaseya CEO Fred Voccola promises will be “more functional, innovative and integrated solutions... and supercharged product quality.”

Others, who have, for one reason or another, avoided either Kaseya or Datto in the past, may look to alternative vendors – and there are plenty of them.  That includes those who have stayed away from or left Kaseya due to its multi-year contract approach with a limited opt-out window.

That said, the MSP space continues to grow and, if we have learned anything these past two years, SMBs need more help than every managing their IT.  Given that, if it can bring the Datto team and product portfolio under the Kaseya umbrella smoothly, the market is ripe with opportunity.  To that end, Voccola sees this as a win-win situation for Kaseya, Datto, and its customers.

“The alignment of our missions and focus makes us a natural fit, that will help our greatly appreciated customers reach new levels of success,” said Voccola.  “Kaseya is known for our outstanding track record of retaining the brands and cultures of the companies we acquire and supercharging product quality. We couldn’t be more excited about what lies before us – Kaseya and Datto will be better together to serve our customers.”

The deal is expected to close in the second half of this year.

MSP Expo 2022 takes place June 21-24, 2022 at the Greater Fort Lauderdale/Broward County Convention Center.  Part of the #TECHSUPERSHOW – including ITEXPO, Future of Work Expo, IoT Evolution Expo, The Blockchain Event, and more – MSP Expo brings together the MSP community, including vendors and partners, for a week of IT education, networking and partnership-building, and an exhibit hall full of the solutions any MSP needs to succeed.

Edited by Erik Linask
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Group Editorial Director

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