The value rain collector: Kaseya buys Datto - The Daily PPILL #49

Kaseya is buying Datto, and if you don't know who these two companies are, you are probably not involved in the IT business. Both develop and sell solutions that Managed Service Providers, those who you usually call "my IT guys" can use to manage hundreds and thousands of devices and workloads from a centralized platform, performing basic but also key tasks like inventory, backup, upgrade deployment, user provisioning and a large list of etceteras.

The acquisition is yet another example on how organizations create huge value, by giving a little, many times. MSPs generally service smaller companies and they typically tend to be around the $10M-$50M in revenues. MSPs used these types of solutions for years, finding value in each interaction that save them time, made their customers happier, and avoided just one more security hole or backup disaster. Through this chain of small, finite value interactions, both Kaseya and Datto grew to formidable companies and the deal just announced last Monday, has a sticker price of $6.2B. The move also leaves us with only a few options specifically designed for the MSP, among them ConnectWise and Atera.

This cycle repeats itself again and again with every successful company. Just like a rain collector that accumulates water drop by drop. Take Amazon for example, with each product shipped for free, providing just a little value to the customer, many times over and over again; transforms into a $Trillion valuation. If you pick, for another example an electric tool manufacturer, making the life of every cabinet maker or handyman, just a little better, but where the huge value occurs, is at the aggregation point.

As for the outcome of the Kaseya-Datto acquisition, as with any other one, we'll see good things like increased standardization of tools for the end-user, and a joint "app store" for the MSPs. And contrary to Milton Friedman's doctrine, we can only hope that they maximize value for all their stakeholders, including those who helped them get there in the first place, the MSPs.

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The Daily PPILL?is my personal daily blog project. PPILL stands for #Purpose, #Process, #Innovation, #Leverage, and #Leadership; the themes that I write about, and in my view, indispensable ingredients of any great initiative.