The COVID-19 pandemic has forced companies around the world to transition to remote work, and experts agree that one of the key factors in this successful transition has been managed service providers (MSPs).
In fact, Datto’s annual “Global State of the MSP” report found that SMBs have been increasingly entrusting their IT to an MSP—even before the pandemic. And individual MSPs have seen steady growth over the past three years.
Founded in 2007, Datto provides cloud-based software and technology solutions. The company has headquarters in Norwalk, Connecticut, and Datto has global offices in the United Kingdom, Netherlands, Denmark, Germany, Canada, Australia, China, and Singapore. It recently became the first of the major MSP tool providers—the others being ConnectWise, Kaseya, and Solarwinds—to go public. Datto raised $594 million in the IPO, selling 22 million shares for $27 each.
The company used the IPO profits to pay off more than half a billion in debt, while holding onto about $50 million in free cash. In addition, revenue for its third quarter was 11% higher than a year ago, and Datto added about 1,000 MSP customers since September 2019, with 200 new customers. Subscription revenue was also up 17% in Q3, hitting $122.8 million compared to $105.2 a year ago.
Yet the company said its retention rate saw a drop from about 88% prior to March to around 84% in June. This could be why Datto recently announced that it was expanding its sales team, making several key sales leadership appointments across Asia Pacific (APAC) and Europe, the Middle East, and Africa (EMEA).
“Prioritizing word-class sales talent with experience in forging relationships across the globe is a top priority for Datto,” said Sanjay Singh, Chief Revenue Officer. “Datto has been very clear in its commitment to helping global IT providers transform to the managed services model. Making real investments in regional leadership and resources is a core part of that promise. I’m very pleased to be able to welcome our new sales leaders as they drive our teams to support the accelerated growth of MSP partners in markets across the globe.”
