technologyreseller.co.uk 43 Q&A Datto’s product wasn’t right. I’ll save my projections for later in the year, but to give you a sense of the addressable market, the headline of my DattoCon keynote was ‘MSPs, you are in the security business’. You need to own and embrace that. Hardware, service desk and help desk are still very important to your clients, but the core of your brand as an MSP now is ‘we’re going to secure your digital assets because the value of your company is in your applications and data’. TR: Lately, you’ve tended to do an acquisition every year or two years. Is that because you need time to ingest these new companies? Or is there another reason? TW: It’s probably because we’re fussy. We look at 50 things at a high level and then we meet five or six management teams. The cultural fit is very important to us; we don’t want them to be too big or too small; they have to be technologists; and they have to have a passion for building software. It doesn’t do you much good to buy the software and see the team leave, so we’re very careful. If the goal was just to buy more companies, they’re out there – M&A has been a very hot space in the last couple of years – and we certainly have the capacity to buy a couple of things a year. But we have a methodical nature. We’re also very focused on our product set. I’ll give you an example. We were shown a UCaaS video conferencing company a couple of years back and we really liked them. So we talked to a bunch of MSPs and they all said the same thing: ‘small, medium businesses don’t use video conferencing’. Three months later when the pandemic came along I’m thinking ‘Oh, that would have been a nice thing to have purchased’. So, we’re very disciplined. We always talk to partners. We always say ‘Is this something you need?’. We’re very tuned into what they’re selling and today that’s security. TR: Is security now Datto’s main selling point? TW: It is. I think it’s taken people a long time to figure out that Continuity, our flagship product, is security even though we’ve been saying that for years. I wouldn’t spend a dollar on firewalls, antivirus, endpoint, all these other things until I knew I had strong backup and a capability to recover. I’ve been in technology for decades and lost enough data in the ‘80s and ‘90s to know that that’s where you spend your money first – you move into a new house, you get insurance because if the house burns to the ground, you need to be able to replace it. Then you start thinking about door locks and smoke detectors and all those other things. Catastrophe could strike, so you have to have a recovery capability. So, we’ve always been in the security business, even if the tech world defines that as what you are doing in detection and response, what I would call frontline technologies. The Infocyte acquisition is another step in our inevitable move into those frontlines, but we still do thousands of restores every year and increasingly many of those are ransomware malwarerelated. Your heart stops if your small law firm gets ransomwared and you can’t open for business without paying the Bitcoin. If we can restore your environment, we’re your favourite vendor for the next 10 years. TR: You don’t want to get too good at stopping all the cyber threats. TW: I’d be happy to work with MSPs at any point in that stack. As a citizen of the world I’d rather stop the attacks in advance, but there is a certain smile that comes to your face when disaster strikes and you’re able to put somebody’s environment back together. It just feels good. It’s a good reason to go to work every day. www.datto.com TR: Twenty-seven employees doesn’t seem like a great number if Infocyte’s technologies are going to be widely adopted by your very large customer base. TW: BitDam was similar in scope and scale so it’s consistent with the way Datto does things. Our unique take on M&A is that we’re not looking to buy revenues; we want to find people that love to build tech. It helps a lot if they’ve already got some tech, and it helps a lot if they’ve got a small amount of revenue and customers, but if they’re serving enterprises or they have much bigger revenues and we don’t like the tech stack, we would view an acquisition as a step backwards. Believe it or not, small development shops of six or eight or 10 people can move mountains in these areas, if that’s where their passion lies. In Infocyte’s case, the founding team came from the US Air Force where they built some early SOC and early cyber defence tools. So, they’ve been in this industry a long time – a decade plus. And that’s not uncommon – the BitDam team came from the Israeli military years ago. TR: And what sort of take up are you expecting there to be? TW: That’s a good question. I don’t want to get bound to precise forecasts or projections, but I’m somebody that believes every MSP is going to have to put a full security stack in for every single SMB client. Go back a decade and your job as an MSP for a dental practice or a law firm might have been to procure laptops and get Microsoft Windows and Office all set. Today your job is to protect their data, protect their applications. Cyber attackers have figured out that SMBs are good targets because they’re usually more exposed. Ransomware is ransomware, bitcoin is bitcoin and the big company CIOs do a better job of protecting themselves, so I like to think that if there’s anything short of 100% penetration, either the MSP wasn’t going about it right or
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