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June 14, 2021 |

Datto Sees Cyber Resilience and Co-Managed IT as Key Opportunities in the “Roaring Twenties”

Speaking at ChannelPro’s SMB Forum last week, business development VP Rob Rae (pictured) said the respect MSPs have earned in the last year keeping SMBs afloat provides an opening for selling security, continuity, and other much needed services.

Datto views security as the most significant among a range of opportunities for partners at the outset of what it believes will be a “golden age” for MSPs. 

“The 2020s are going to be the roaring twenties as we continue to come out of this, and I think managed service providers are poised right in the middle,” said Rob Rae, Datto’s senior vice president of business development, during a presentation at last week’s ChannelPro SMB Forum event in Dallas.

Echoing views expressed recently by other vendors as well, Rae noted that for all the devastation it’s wrought, the coronavirus pandemic has had a net positive impact on managed service providers, whose success in keeping systems up and running under trying circumstances earned them newfound respect from clients.

“In this country alone, tens of thousands of SMB jobs were saved as a result of an MSP,” said Rae last week in a conversation with ChannelPro. “I think the end user understanding of the value of the MSP has gone up as a result.”

The greater trust and appreciation MSPs now enjoy, Rae adds, should translate into increased spending on the security products and services channel pros have long been encouraging customers to deploy in response to ever-mounting threats. According to research published by Datto last November, in fact, some 60% of MSPs saw at least one of their clients get hit by ransomware in the first half of 2020.

Numbers like that have Datto urging its partners to emphasize “cyber resilience” rather than cybersecurity when speaking with customers. Cybersecurity, Rae notes, is about preventing attacks from succeeding. Strategies based around cyber resilience, by contrast, accept the reality that most businesses will eventually be breached, and seek to minimize the resulting damage.

“Cyber resilience would kind of cover the whole spectrum from start to finish based on the different scenarios that can actually happen, and how severe they actually are,” Rae says.

Datto’s emerging cyber resilience platform is designed to address the five core functions in the widely respected NIST cybersecurity framework: identify, protect, detect, respond, and recover. Datto RMM, the company says, helps businesses identify assets, and the software Datto acquired along with Israeli security vendor BitDam in March will help MSPs protect those assets when it reaches market in the future. The ransomware detection feature available in Datto RMM since last December assists with the detect function, and Datto’s BDR products help with recovery. 

A forthcoming continuity solution for Microsoft Azure, first disclosed in March, will allow organizations to recover data in the cloud as well as on premises.

Other vendors have embraced a similar vision and similar messaging. OpenText, for example, has been calling “cyber resilience” the goal behind its acquisition of availability vendor Carbonite, which in turn owns security vendor Webroot, since last year. Acronis has similarly rolled multiple backup and security products together into a single cyber resilience platform called Cyber Protect Cloud (which gained email security functionality last week). Barracuda, meanwhile, has long offered both backup and security products, along with RMM software like Datto’s for managing those systems.

Datto’s emphasis on cyber resilience is something of a departure for the company, which long questioned whether demand for security solutions was strong enough among SMBs to be a meaningful revenue source for MSPs. Now, however, thanks in part to high-profile incidents like the recent Colonial Pipeline and JBS attacks, even small businesses are increasingly eager to defend themselves from ransomware and other threats.

“Organizations in the SMB space are starting to make that proper investment because they understand it a little bit better, and the MSPs understand it and know how to sell it better,” Rae says. “It just takes time for these things to get down into our space.”

Datto competitors such as Kaseya and ConnectWise have been aggressively pursuing cybersecurity spending through acquisitions and new product rollouts for years. N-able (formerly SolarWinds MSP) for its part announced a forthcoming DNS filtering product, based on technology from DNSFilter, last week.

Alongside cyber resilience, Rae highlighted “co-managed IT” contracts in which channel pros work collaboratively with in-house IT departments as another significant “roaring twenties” opportunity during his SMB Forum appearance. 

Many large and midsize businesses with no prior MSP relationship signed co-management contracts last year to ease the unfamiliar and overwhelming burdens of work-from-home computing. Datto and many other vendors expect that trend to persist, and to benefit channel pros who capitalize on it.

“Larger organizations value IT more. Large organizations have bigger IT budgets. Larger organizations pay their bills on time,” Rae notes. “These are problems that we have in the SMB space.”

Datto plans to put more funding into efforts aimed at helping MSPs launch co-managed IT practices in the months to come. 

“It’s a different sale,” Rae notes, “and I think that some of the investment that we’re making is the training on what do you say to the in-house IT guy? What do you say to the CTO? What do you say to the CEO? How do you explain what you’re bringing to the table?”

Readying MSPs to take advantage of opportunities in co-managed IT and security alike is a time-sensitive priority for Datto as well as its partners, Rae continues, because the increased faith SMBs have in their IT providers won’t last forever.

“The window for these things is short,” he says.

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