Bob Godgart, the founder and former CEO of Autotask Corp., likes the looks of that company’s recently announced merger with Datto Inc.
“I think it’s a good thing for Autotask,” he says of the blockbuster deal. “It’s a good thing for the industry. The consolidation that keeps happening builds bigger and stronger companies that can support the MSP better.”
Godgart, who launched East Greenbush, N.Y.-based Autotask in his living room 16 years ago, has had no financial stake in the company since it was acquired in 2014 by Vista Equity Partners, the private investment firm that has now bought Norwalk, Conn.-based Datto as well and turned the two companies into one.
A serial entrepreneur with a variety of business ventures who currently serves as chairman of ChannelEyes, a vendor based in Troy, N.Y. that makes tools designed to help vendors communicate with partners, had no advance warning of the impending transaction, but says he wasn’t surprised when he heard about it.
“I think the industry as a whole is really consolidating and this made some really good logical sense,” he says.
Autotask and Datto have market strength in different parts of the globe, he continues, and little overlap in products. Now they can cross-sell—and efficiently support—a broad, diverse set of solutions to a bigger set of MSPs.
“You streamline the sales. You streamline the support. You can sell more things to one solution provider,” Godgart says.
You can also sell through those MSPs to end users, he notes, something Autotask in particular has done only on a limited basis in the past through products like Autotask Workplace, its file sync and share offering.
Godgart sees Autotask and Datto customers benefitting from the merger of those companies as well.
“It makes a lot of sense for the MSP, because now you can get more product from one vendor rather than have to use multiple vendors,” he says.
As a result, he adds, there’s likely to be more vendor consolidation to come.
“I think you’ll see a lot more of this in 2018,” Godgart states. “I wouldn’t be surprised if Kaseya and SolarWinds and ConnectWise are all out looking right now.”
One company they might be looking at, he adds, is Tigerpaw Software Inc. Godgart, who is a strategic advisor to the Bellevue, Neb.-based PSA vendor and a member of its board of directors, emphasizes that he has no reason to believe Tigerpaw is for sale at present. But he can see why an RMM or BDR player looking to expand into new markets might find an established company with some 1,500 customers and name brand recognition an attractive acquisition target.
“I think that Tigerpaw is really in an interesting position right now,” Godgart says.
Security vendors could be a hot commodity in coming months too, he adds. Neither the new Autotask/Datto combination or many of its rivals, including ConnectWise and Kaseya, have a security solution at present. Other competitors, including Continuum and SolarWinds MSP are making strategic investments in security.
“The security pieces are next,” Godgart says. “I think it’s just a natural evolution.”
Though upbeat on the merger of Autotask and Datto generally, Godgart will be watching to see if the newly enlarged company and its consolidating foes in the market remain committed to openness and integration with one another.
“The interoperability between multiple products from multiple companies is a very, very important thing,” he says.
Godgart takes it as an encouraging sign that Datto is still welcome to attend ConnectWise’s IT Nation conference next week in Orlando.
“I wouldn’t have thought that was going to be the first move,” he says. “They opened their arms, and it was very interesting to see that.”
The question now though, he continues, is how long those arms, and those of other managed services players, will remain open. Companies like Autotask/Datto and ConnectWise may well maintain open APIs, but how much effort will they put into integrating with companies selling similar products to the same MSPs?
“It’s not a small amount of work to make these integrations work,” Godgart observes. And how willing will vendors fighting it out for market share be to give top competitors a close-up look at the inner workings of their solutions for test purposes?
“I don’t see ConnectWise giving Datto access to their product as easily if they now own Autotask,” says Godgart, who looks forward to seeing how that and other matters settle out in the months ahead, albeit chiefly from the sidelines.
“The whole thing’s going to be very interesting as we move forward,” he says
