Datto CEO Tim Weller: IPO’s ‘MSP’ Ticker Symbol A ‘Shout-Out’ To Our Partners

‘They know Datto, and they know the spirit in which it was meant. Again, we never sell direct. So we have no intention of anything other than aligning incentives, aligning our practice, aligning support and technology creation, all for the benefit of MSPs,’ Datto CEO Tim Weller tells CRN.

Datto’s IPO Wednesday brought the company a solid start as a public company and more resources to build the products and services its MSP partners need going forward.

After the close of Datto’s first trading day as a public company Wednesday, Datto CEO Tim Weller (pictured, fourth from left) told CRN that the run-up to to the IPO was tiring and it was time for a bit of rest before getting back to building the Norwalk, Conn.-based company’s business.

“[I’m] just in need of a little nap,” Weller said. “But first, we’re going to celebrate. A fun day for us, and a fun day for the industry, too, I hope. We meant to salute the industry with our ticker symbol and project that we’re all on a journey together, including our competitors. It’s such a fun place to work in the space.”

[Related: Creativity, Education Key To Growing MSP Business During COVID-9: Datto]

Datto’s first day on the New York Stock Exchange started with the IPO priced at $27 per share, which was at the upper end of the expected range of $24 to $27 per share, for a total of $594 million raised, giving the company a valuation of about $4.25 billion. When trading in Datto started at noon EST, the price per share rose to $32, but by the close of trading share prices fell to $27.10 per share.

That ticker symbol Weller referred to was “MSP,” which is also the acronym for the managed service provider community that forms Datto’s exclusive customer base.

Weller said the ticker was meant to be a recognition that MSPs are what made Datto the company what it is, as well as a reminder that Datto has no intention of selling its products or services directly to its partners’ SMB customer base.

“We focus on the technology, and we focus on helping partners grow and helping partners sell our technology,” he said. “But really, we’re investing in their business.”

When asked whether using “MSP” as its ticker symbol could impact the value proposition of its channel partners who also operate as MSPs, Weller said that he saw comments online which expressed that concern.

However, he insists Datto has had an overwhelming outpouring of support from MSPs on this.

“They know Datto, and they know the spirit in which it was meant,” he said. “Again, we never sell direct. So we have no intention of anything other than aligning incentives, aligning our practice, aligning support and technology creation, all for the benefit of MSPs. So, it’s definitely meant to be a shout-out to the industry, nothing more.”

Now that Datto has held its IPO, Weller said the company will continue to do what it has done since its 2007 founding by Austin McChord (pictured, third from left) in the basement of his parents home: continue to develop and deliver technologies specifically for MSPs.

That technology is aimed at some of the key trends in the IT industry that Weller said will likely accelerate as a result of the COVID-19 coronavirus pandemic, including businesses’ shift to the cloud, work from home, and remote management of digital assets as SMBs shift to more digital transformation.

“We as an industry should be prepared to capture more of that,” he said. “And that means more digital assets. You need to secure, protect, maintain access to, monitor, and view those digital assets, both applications and data. You have to manage those live environments and protect them. And MSPs are on the front line of that as essential workers. And so you’ll see us investing heavily in technology.”

Looking forward, Datto’s technology development will remain focused on the changing needs of MSPs that are seeing their SMB customers continue to move their assets to digital form, Weller said.

“Now the lifeblood of your company is your interaction online with your customers, increasingly mobile, and all of your digital data and your applications become the core of your business,” he said. “In that environment, if that is starting to shift into the hybrid cloud world or remote work world, your digital assets are spread all over the place. And it explains everything Datto does: continuity, remote management, networking, all the different threads of security we put across all of our different products.”

Weller said Datto told its investors that it sees a $28 billion market opportunity, one that will probably more than double over the next five years. “So there’s plenty of room for us, and plenty of room for others,” he said.

While the IPO makes Datto a stronger company from a financial perspective, culturally it remains the same, Weller said.

“So I don’t think it’s going to shift the competitive landscape,” he said. “It’s probably a fair question for competitors. And we would expect other people who served this industry in whole or in part to think about if their evolution involves the public market.”

Datto is not Weller’s first big IPO. In 1999, he was chief financial officer for Akamai when it set the record for the fourth-biggest single big gain for an IPO. However, Weller said, the environment at that time was different than what Datto faced in its IPO.

The Akamai IPO happened at the absolute peak of the internet bubble at a time when investors were looking to make bets on the internet without knowing what the online environment would look like, Weller said.

“I think now you’ve got something going on, which is very cool, which is a broad recognition that Software as a Service, in fact all technology as a service, is where the world has moved to,” he said. “Those were very nascent concepts in 1999 and 2000. And you know, first Salesforce.com, then many, many others, pioneered this road. Datto has been Software as a Service forever. MSPs, even the word ‘managed services’ means they’ll get recurring revenue, be advisers and strategists and operators and procurers of technology for your end clients, SMBs.”

The market today recognizes that it’s not necessarily a healthy thing to have big IPO pops, Weller said.

“We’re a long-term-view company,” he said. “It’s a long race. We’re thrilled to be public. We’re thrilled to trade well today. And then we’ll start moving away from watching the stock minute by minute. But I will admit to being a little hooked for that first hour. You can’t be at the New York Stock Exchange and not feel the palpable energy.”

O’RYAN JOHNSON contributed to this story.