When acquisitions are handled badly, it affects the rest of us too


When acquisitions are not handled with care, all of us in the industry get affected.

Acquisitions, mergers, buyouts, exits…these are intrinsic parts of the business world. Companies get bought and sold regularly, there are schools of thought on how to make mergers and acquisitions successful. No one wants to see a good company getting acquired and then getting gutted for parts or worse. Yet, that too happens. Unfortunately. Even today, even in 2022.

When we launched #GoodbyeDatto, calling out the challenges customers would face considering the unfortunate history of past Kaseya acquisitions, a number of MSPs, Datto customers, and other insiders in the MSP world came out in support. We received brickbats too, as is understandable when one takes a strong stance on any issue. We were prepared for it. We are a young startup just making our way in the world and we had this question thrown at us - does it make sense to take such a stance and be at the receiving end?

It did make sense then and it does make sense still. The MSP world has seen this game being played over and over again. A plucky tech provider builds something that is good and loved by the MSP community. It then gets acquired and it either disappears or it becomes part of a clunky and outdated suite of products and takes on the characteristics of the acquirer. The end result for MSPs is they lose yet another piece of working tech and they need to get on the hunt yet again for a replacement.

Again, I want to underscore that acquisitions and mergers are not wrong. In fact, many products in the larger tech world have scaled and improved because they were acquired by a larger company with deeper pockets. Google’s acquisition of YouTube in 2006 is a case in point. My previous company, Zarget, found its forever home in Freshworks in 2017. We worked on the transition, the team was integrated well, and together we all built up the company. Acquisitions when handled well can create a lot of good; it can result in happy employees, and satisfied customers, and the positive effects for the larger industry also cannot be overstated.

The problem is when a product is wasted or destroyed. 

Unfortunately, that seems to be happening yet again in the case of Kaseya-Datto. Those who know better about what’s happening within Datto, post-acquisition, have written about what’s happening behind the scenes in public forums. Datto’s Founder Austin McChord has posted a detailed GitHub note on the changes in policies, terminations, and all-round destruction of company culture. In it he says, “This sucks. It feels like you just bought a leading football team and are in the process of breaking all the players (sic) legs. This is not a winning strategy. It will hurt the entire MSP industry.”

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Datto’s Founder Austin McChord's GitHub post on the mishandling of the Datto merger with Kaseya

There are multiple posts in public forums by Datto employees, customers, and others. Here’s one such.

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Datto employee's anonymous post on Reddit on the "transition mess"

What we are seeing repeatedly, and this is something we were worried about and called out right when the news came out, is that everything that resulted in Datto being such a great product is getting destroyed.

Now, you would think that we as a competing tech vendor, even if much smaller, would be happy about this; isn’t it one less competition? It isn’t so simple. MSPs spend a lot of time and effort to zero in on and choose the tech stack, their PSA, RMM, IT documentation, project management, password management, and other such tools. When one tech fails or a product stops working properly, all tech vendors get tarred with the same brush. 

It is not a good look for all tech vendors, when MSPs are repeatedly let down by legacy players, when the tools or solutions get destroyed or do not work well, or they are slapped with three-year contracts or with NDAs when a cybersecurity incident occurs. 

It is not just the erosion of trust and faith, there are also instances where MSPs stop updating their tech stack, or use tools that do not fit their actual requirements because it is just easier that way, or use systems that are sub par resulting in lower productivity for themselves and their clients, and resulting in a feeling that “tech does not work”. 

Individual MSPs can only do so much. We wanted to add our voice too, to support MSPs. We are working closely with MSPs to build a robust PSA-RMM that works for today’s MSP businesses, that leverages tech advances to ensure MSP workflows and processes are easy and smooth. It would be great to have other tech vendors who believe the same, so collectively we can improve the market and raise standards. But we are ready to strike out on our own even if we need to forge the path alone. 

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