Datto partners will enjoy continued support for all of the products they use today, plus lower prices and more integration with other solutions, after the company’s acquisition by Kaseya closes, according to Kaseya CEO Fred Voccola.
“We want to keep everything that’s great,” he said in a conversation with ChannelPro today. “Everything that’s not great, we don’t want to get rid of it, we just want to get better.”
Kaseya announced an agreement to purchase Datto, currently one of its top competitors in a range of key markets, two months ago in a deal valued at $6.2 billion. The acquisition, though still pending, will close “in the very near future,” said Voccola this morning during a keynote address at Kaseya’s Connect IT conference in Las Vegas. He also, in remarks echoing comments made to ChannelPro earlier, emphasized that none of Datto’s products will be eliminated after the transaction closes.
“All products will be supported, period,” Voccola said, adding that Kaseya plans to spend more on those products, by hiring more developers and engineers for example, after the two companies become one.
“We believe in creating value through growth,” he subsequently told ChannelPro. “Growth means investment.”
Both Kaseya and Datto make widely used RMM, PSA, and BDR products. Discontinuing overlapping systems in those categories, Voccola explained during his keynote, would save Kaseya an estimated $20 million annually in product development and support costs, a relatively modest amount in relation to what he said is currently $1.8 billion in revenue and some $500 million in profit. More importantly, he added, canceling Datto solutions would anger thousands of customers, resulting in losses that could easily exceed $20 million.
Kaseya and Datto partners can expect more and tighter integration across the two vendors’ portfolios as well in the future, Voccola said. Integration between the live ticketing feature in Datto’s Autotask PSA solution and Kaseya’s IT Glue documentation platform, for example, will roll out within 30 days of acquisition close, and IT Glue’s automatic documentation backup feature will be integrated with Datto’s backup suite within 45 days.
The two product lines will eventually be “commercially integrated” as well as technically linked, Voccola added, meaning that users will have one account manager and receive one monthly bill for everything they use, and that all Kaseya and Datto products will employ a common licensing framework.
Kaseya’s current offerings are about 43% commercially integrated at present, Voccola said during his keynote. Those products and Datto’s solutions will be 100% integrated, he pledged, by the end of March 2023.
According to Voccola, Datto products will be less expensive after the acquisition is complete as well.
“We are lowering the list price on average of every Datto product by 10%,” he said this morning, stressing that 10% is an average. Products like switches from Datto’s networking line that are already inexpensive will sell for about the same as before, while pricing on other, unspecified, solutions will drop by as much as 25%.
On average, Kaseya claims, its products today cost one-third less than solutions from competing vendors.
Without describing specific post-acquisition plans, Voccola suggested that concerns among Datto partners about being forced into multi-year contracts, something many Kaseya partners have complained about, are misplaced.
“We have very similar, if not the exact same, commercial policies,” he says. “We both do a standard three-year term contract. We both offer a one-year contract, and our three-year contracts are less expensive.” What distinguishes the two companies, he adds, is the size of the discount you get for committing to three years, which is far larger with Kaseya.
“The price differences are massive, like 40% lower,” Voccola says. And that, he continues, is what led to complaints when the new pricing scheme went into effect. Partners, in many cases, had to choose between signing three-year contracts or paying higher rates.
“A lot of MSPs wanted the three-year price on a one-year commitment, and we just don’t do that,” Voccola says. “People got a little frustrated with us.” Kaseya is open, he continues, to changing its contract policies in the future.
“We will listen to anything if we can get better, and if we can figure out a mutually beneficial way to give better commercial terms, we will absolutely do it,” he says.
Voccola’s remarks about Datto followed a discussion of Kaseya’s master strategy: helping MSPs reduce vendor management burdens, boost technician productivity, get more value from the products they use, and stretch constrained IT budgets by providing them a comprehensive, tightly integrated, cost-effective platform with built-in artificial intelligence. Datto, he added, will strengthen Kaseya in all aspects of that mission.
“Datto makes us more Kaseya,” he said.
Datto could make Kaseya more Datto too, he added, in comments that alluded partly to the partner-first culture Datto users prize so highly. “Datto’s a great company. They have great products, great customer support. We want to take that into Kaseya. We want to learn from that,” Voccola said.
In particular, he told ChannelPro, Datto has “amazing cloud engineering capability” and “legendary” customer support. “That’s going to make the overall Kaseya support capability better,” Voccola said.
Also at Connect IT today, Kaseya launched a new “intelligence engine” designed to help technicians discover underutilized product features, gaps in customer support, and new training opportunities, and also previewed a forthcoming release of its VSA remote monitoring and management solution that will support non-traditional endpoints like IoT devices and cloud applications in addition to PCs and servers.