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March 10, 2021 |

Datto Acquires BitDam in Biggest Move Yet into Security Market

The threat detection vendor’s solution, which is designed to defend SaaS collaboration applications from ransomware, malware, and phishing, will be Datto’s first security-related product other than BDR offerings.

BDR and managed services software giant Datto has acquired threat detection vendor BitDam.

Though BDR is widely considered an essential layer in complete security strategies, buying BitDam is Datto’s first move into a burgeoning managed security market that its top competitors have been targeting for years. Terms of the deal were not disclosed.

“Security has always been at the core of Datto’s offerings and we see it as our responsibility and role to help MSPs and SMBs address the heightened security concerns they face today,” said Datto CEO Tim Weller in a media statement. “The addition of BitDam is consistent with Datto’s deep commitment to providing top of the line, cyber resilience capabilities for MSPs and SMBs, and aligns with our mission to shape a security roadmap for MSPs that helps them achieve cyber resilience.”

Based in Israel, BitDam makes a solution designed to defend SaaS collaboration applications like Microsoft 365 and Google Workspace from ransomware, malware, and phishing. According to Datto, the system proactively protects against zero days with no previously known signature.

“MSPs need intelligent security baked into every solution they use, from a partner they trust. In our careful and thorough testing, validated by a third-party testing lab, we confirmed that the robust capability of BitDam identifies known and unknown threats, without a need for prior observation and regardless of the type or delivery method,” said Ryan Weeks, Datto’s chief information security officer, in prepared remarks. “The BitDam team brings enhanced expertise to Datto that will empower our partners and end users to better defend against sophisticated cyber threats, exploitation techniques, and malware infections.”

Other leading managed service software makers have been stocking up on security vendors and services for the last several years. ConnectWise, for example, outlined a sprawling strategic push into security late in 2018, and subsequently added an array of security capabilities to its portfolio through its 2019 purchase of Continuum and 2020 acquisitions of Perch Security and StratoZen. The company introduced a cybersecurity framework for MSPs and security partner community last year as well.

Kaseya’s security and backup purchases extend back to deals involving BDR vendor Unitrends, assessment and compliance management vendor RapidFire Tools, and cloud-to-cloud backup vendor Spanning in 2018, as well as dark web monitoring, security awareness training, and IAM vendor ID Agent the next year. The company added email security vendor Graphus to its holdings last year and managed SOC provider RocketCyber last month.

SolarWinds MSP, for its part, has purchased password management and documentation vendor Passportal, IT service desk vendor Samanage, threat monitoring and management vendor Trusted Metrics, and email security vendor SpamExperts in recent years. More recently, it’s rolled out integrations with Cisco Meraki and EDR leader SentinelOne.

Datto, by contrast, has been far more cautious about entering the security market. As recently as last December, at an online partner conference, Weller echoed a position first expressed to ChannelPro in 2019 that SMBs aren’t yet open to spending heavily on security.

“I think that’s starting to change,” he said, “and we will change as soon as we build or find something truly unique, truly compelling, where we think MSPs can make real profit margins and get real protection, instead of a marketing story.”

Datto’s biggest move yet into cybersecurity comes as global outlays on security technology are rising from $125.2 last year toward $174.7 billion in 2024, according to IDC, and security incidents are spiking just as dramatically. According to Datto’s 2020 Global State of the Channel Ransomware Report, in fact, 60% of more than 1,000 MSPs it polled said that at least one of their clients was hit by ransomware in the first half of last year. Eleven percent of survey respondents have clients who were struck multiple times in a single day.

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