SMB Nation Blog

SMB Nation has been serving the Bainbridge Island area since 2001, providing IT Support such as technical helpdesk support, computer support, and consulting to small and medium-sized businesses.

Datto/Autotask Merger: Sophisticated Investors Only

In late October, fellow MSP blogger Joe Panettieri broke the story, in advance of the public announcement, that there was a merger between Datto and Autotask. I’ll briefly review the multiple transactions that made this happen. It’s surprisingly sophisticated. This almost reads like a Russian spy novel with all the players LOL. Let’s start by following the money and then I’ll offer some community comments.

2004-2014
Autotask raises at least $10M in four funding rounds (see Figure 1)

autotaskfunding

Figure 1: Autotask started taking the money in 2004.

2014
Autotask acquired for $99M by Vista Equity Partners.

2015
Datto completes a funding journey that started in 2013 and ended in 2015 raising $100M. At the time I wrote of Datto being a “unicorn” as it claimed the $100m stake resulted in a ten percent share and a market valuation of $1B.

dattofunding

Figure 2: Datto’s funding rounds.

2017
June/July: I circled back into the Datto orbit by attending the DattoCon conference in Denver in June 2017. In this blog at the time, I opine that the “E” (‘exit”) word has to enter the Datto lexicon because private equity money is not patient money and has to be put to work. I further drill down into the mind of Austin McChord, Datto CEO in a 1:1 interview HERE in early July at the Datto HQ in Norwalk.

austinandharry

Figure 3: Harry’s 1:1 with Datto CEO Austin McChord where M&A thoughts surface.

October: Here’s where things speed up. Vista Equity Partners acquires Datto. Then it merged Datto and Autotask together. In reality, this amalgamation results in a relationship hierarchy. If it were the wild world of Craigslist personal ads, this hook-up would have Datto as the “Dom” and Autotask as the “Sub.” Of course financial terms weren’t disclosed LOL.

Analysis
The merger makes sense in the mature and contracting SMB technology sector. Cloud has squeezed out the value chain many old timey server-side Big Iron fellas remember well. Consolidation is a natural act. The hierarchy with Datto on top (McChord becomes CEO and Autotask’s Mark Cattini will exit) makes sense as I believe Autotask took the smaller SMB MSPs in the beloved SMB Nation community for granted like Clinton viewed traditional core Democratic constituencies in the 2016 presidential election a year ago. It felt like the past few years Autotask courted its big donors ignoring the working class man (this isn’t just my opinion but that of other bloggers and community members – in a recent outreach by myself to the SBS group on Facebook concerning this merger, the responses were a resounding “Meh” reflecting Autotask had lost mindshare in the SMB Nation community. )

So when I had a 1:1 with Datto CMO Peter Rawlinson last week while I was literally on Wall Street (see Figure 4) and Rawlinson was in the Datto HQ in Norwalk, CT, I zeroed on the conflation of the Datto and Autotask partner communities and what that means for our “Joe the ‘puter guys” getting a love tap in the yet to be renamed combined company.

girlandbull

Figure 4: How fitting to be on Wall Street for my chat with Rawlinson.

“Now with a combined partner base of over 13,000 SMB MSPs, we are absolutely making a commitment the smaller MSP and the SMB Nation audience persona.” Rawlinson emphasized. He went to round out the context of the merger. “This is a merger for growth, not cost cutting.” Warning: ten dollar word ahead. What Rawlinson is suggesting is that this merger is accretive which is a fancy way of saying 1+1 =3. My conversation with Rawlinson ended with a couple of unknowns: the new brand name and whether there will be an HQ1 (Norwalk, CT) and/or HQ2 (Albany, NY).

Dilutive v Accretive

My big question moving forward is whether the product overlap will effectively result in portfolio dilution and partner contraction. Other wiser minds in the SMB media have minimized the product overlap so in this sense the merger works. But what about ConnectWise partners that use Datto or Autotask partners that use a different BDR solution such as efolder? I’ll monitor the potential MSP partner churn-and-burn rate from this merger over the next year and report back. [If you’d like insights into the Datto product road map, watch my vid interview with Datto VP, Networking John Tippett here.]

Competition
Michael George (CEO, Continuum), who I’d offer lives life out loud, didn’t lack words about the Datto/Autotask merger. “Consolidation of this nature should come as no surprise to anyone in the MSP market. Standalone vendors are finding it increasingly difficult to compete as MSPs move to the few key providers that matter most to them. Today’s news should galvanize MSPs to focus on one or two key platforms, rather than trying to price-optimize with standalone independent vendors.” George said.

“Today’s merger brings together two critical categories in the channel: RMM and BDR. That’s a clear signal that a unified approach to these services is in demand from MSPs, and that’s why Continuum offers partners these solutions as the cornerstone of our platform.” George commented. “But, to stay relevant over the next three to five years, the next major play is security. We anticipate that the next market consolidation will come as MSPs look to acquire the tools and services to secure their clients amid today’s heightened threat landscape. That’s where we’re already moving with our new security offering launched this month, and we can expect that standalone vendors will begin to beef up their capabilities to meet that demand, and MSPs will take notice.” If you’d like to read my recent 1:1 interview with George, look HERE.

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US consumer spending posts largest gain since 2009

 
Consumer Spending
 
(Reuters)
 
WASHINGTON, Oct 30 (Reuters) - U.S. consumer spending recorded its biggest increase in more than eight years in September, likely as households in Texas and Florida replaced flood-damaged motor vehicles, but underlying inflation remained muted.
The Commerce Department said on Monday consumer spending, which accounts for more than two-thirds of U.S. economic activity, jumped 1.0 percent last month. The increase, which also included a boost from higher household spending on utilities, was the largest since August 2009.
Consumer spending increased by an unrevised 0.1 percent in August. Economists polled by Reuters had forecast consumer spending increasing 0.8 percent in September.
The data was included in last Friday's third-quarter gross domestic product report, which showed that growth in consumer spending growth slowed to a 2.4 percent annualized rate after a robust 3.3 percent growth pace in the second quarter.
The moderation in consumption was offset by a rise in inventory investment, business spending on equipment and a drop in imports, which left the economy growing at a 3.0 percent rate in the third quarter after the April-June period's brisk 3.1 percent pace.
 
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Roadmap for Skype for Business capabilities coming to Microsoft Teams now available

By: Tiffany Wissner (WENTZEL) Microsoft

Last month at Microsoft Ignite we introduced a new vision for intelligent communications, which includes Microsoft Teams becoming the primary client for communication and collaboration in Office 365. Today we are sharing more detail on our planned roadmap for adding Microsoft Skype for Business capabilities to Teams, so you can plan your onboarding.

Messaging – Teams offers rich instant messaging capabilities today, with persistent chat, as well as private 1:1 and group chat. We expect to deliver RoadMapadditional messaging capabilities in Teams by the end of Q2-2018. Features will include screen sharing during chat and federation between companies.

Meetings – Teams offers collaborative meetings capabilities today, including screen sharing, meeting chats captured in the channel after the meeting, and the preview of audio conferencing. We expect to deliver additional meeting capabilities in Microsoft Teams by the end of Q2-2018. These features include meeting room support with Skype Room Systems, and cloud video interoperability capabilities that allow third party meeting room devices to connect to Teams meetings.

Calling – Today, Teams offers many calling capabilities. Later this quarter, we plan to ship voicemail for Teams. By the end of Q2-2018, we will enable you to use your existing telco voice line to activate calling services in Office 365.

Beyond bringing existing Skype for Business core capabilities to Teams, we are excited about new intelligent communications coming to Teams. As shown at the Ignite Microsoft Teams and Skype for Business General Session, customers will be able to record a meeting and store it in Teams, have transcription added, and be able to search the meeting for key terms. These features will begin rolling out at the end of Q2-2018.

As part of our vision for intelligent communications, we are also taking the opportunity to simplify the naming of our premium communication offerings. PSTN Conferencing will now be known as “Audio Conferencing;” Cloud PBX will now be known as “Phone System;” and PSTN Calling will now be known as “Calling Plan.” We want these names to be more intuitive to both IT and end users as we further integrate communications with collaboration.

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Amazon Launches ‘Business Prime’ to Bring Quick Delivery to Work

amazon logo

 

By Spencer Soper
October 24, 2017, 9:54 AM PDT

Amazon.com Inc. launched a Prime membership service for businesses, looking to replicate in the workplace the quick delivery of online orders that made it a go-to shopping destination for households.

Business Prime Shipping, available in the U.S. and Germany, offers free two-day delivery to companies paying $499 to $10,999 a year depending on their size, Amazon said. The subscription program is looking to win business from office supply stores such as Staples Inc. and Office Depot Inc.

Business-to-business transactions have been slower to shift online than retail, but could be a bigger revenue opportunity in the long term, said Andy Hoar, an analyst at Forrester Research Inc. He estimates the U.S. market will reach $1.2 trillion by 2021, up from $889 billion this year.

 

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Expectations For Smartphone Technology in Near Future

It’s been quite a while since the smartphones, whether the android smartphones or Apple, have not been producing anything special. Looks like in the past few years the only thing changing in the new smartphones is the general look of a phone, and the companies produce a better camera with every successive phone.

So, how will the smartphone future technologies be subject to change or what should we be expecting out of them?

Well, considering the smartphone market in the world of today, it seems like perhaps the Samsung smartphoneamongst all android smartphones might be able to produce something new by the year 2018. Here are some expectations we have from the upcoming smartphones in the following year.

New ways of unlocking:

Keeping under consideration the Samsung Note 8, it unlocks through a finger scanner and an eye scanner at the same time. Although several customers have complained about the finger scanner being at a silly place or the eye scanner hardly working, we hope that in the upcoming Samsung android smartphones, these problems will be fixed and the accuracy of the phones will increase.
Facial scanning sounded almost impossible to us, until this September, when Apple announced that their upcoming iPhone X will be unlocked through facial recognition for higher privacy rate. We hope android phones will introduce this technology as well.

Better displays:

The Note 8 has a display unlike any other though, as it uses an OLED display which can be made thinner, brighter and lighter with a better color accuracy and better contrast than the previous display being used, the LED. The iPhone X also uses the OLED display, leaving the LED behind.
The phones that will be launched in the coming year will probably try to catch up as soon as they can, and will definitely get the OLED display as a distinct feature of their own as well!

Better Battery life:

Better battery life can be expected from the upcoming android smartphones of the year 2018. Have you heard? The iPhone X second edition to be released next September, will be the size of an iPhone 7, however, it is believed that it will have a battery life which will run for as long as 2 days on full charge!

Go completely wireless:

We’re expecting that we will be able to charge our phones wirelessly soon. Wireless charging technology is already available and in use, however we still need a charger (charging pod/dock) and phone needs to be "put to charging". Imagine that simply by walking into a room with such "power router" you would start charging your smartphone. Breaking and losing our wires, or having our plugs get fused is just tiring now. And while we’re at it, we also expect to see wireless ear pods in the smartphone future technologies.

Holograms:

It is hoped that the new phones will have holographic displays. You can have a 3-D display in front of you, so that you can experience and look at from all different positions physically. Holograms today sound like "Star Wars" technology, but they might be closer in future than we believe.

It is believed that perhaps the smartphones have now reached their peaks and new technologies can no longer be introduced. However, these small improvements and changings would introduce a new era to the smartphone technology.

 

Written by: Jeffrey Ulrich, CEO, Chinavasion Wholesale Ltd., tech and cool gadgets enthusiast, creator of the Chinese e-commerce shop in 2004, Shenzhen, China.
For more info visit: www.chinavasion.com 

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