UPDATED 19:20 EDT / FEBRUARY 09 2017

CLOUD

Low-profile unicorn Datto thinks big as it muscles into network market

In a world of prominent “unicorn” startups, Datto Inc. keeps a low profile.

In part, that’s because the Norwalk, Connecticut-based company isn’t interested in courting enterprise customers. It sells its line of data protection products and services exclusively through a network of managed service providers, or MSPs, which then resell them to their customers.

“The special sauce for Datto really is the channel,” said Matt Richards (pictured), Datto’s vice president of product marketing, in an interview on SiliconANGLE’s video studio theCUBE. “The managed service provider is our path for delivering all our products to end customers.”

Datto’s business hasn’t suffered from lying low. Founded in 2007, the company today employs 750 people and has raised $100 million in venture funding, bringing its total valuation to more than $1 billion. It says annual revenues exceed $100 million, and the company was profitable before a recent expansion push.

Datto provides an end-to-end approach to backing up and securing data on-premises and in the cloud. It supplies a local appliance that continually captures full server images and provides instant verification and restoration in the event of a failure. It also backs up the data to its own cloud. that means that if a server goes down or is hit by malware, the appliance can take over as a temporary backup server. Customers can even run their operations directly from the Datto cloud.

Its approach, which the company calls “inverse chain technology,” shortcuts the more typical backup process of taking incremental snapshots and rebuilding server images piece by piece. Datto says that it can restore a full server image in as little as six seconds. “The ideas that if you lose a server, we can reboot and get you up and running instantly,” Richards said. “If your office is underwater, we can reboot and run from the cloud.”

‘Disaster Demos’

The company dramatizes this resilience through a stunt it performs at its road show events called “Disaster Demos.” It has attacked servers and appliances with chainsaws, set them on fire, blasted them with shotguns and immersed them in liquid nitrogen. “The whole point is to take a workstation and destroy it to demonstrate that we can bring up an image on our appliance,” Richards said. “Then we destroy the appliance to demonstrate that the cloud can also pick up from there.”

Founder and Chief Executive Austin McChord started Datto fresh out of college, seeing an opportunity to serve the then-fledgling MSP market. As that channel has exploded, Datto has grown with it. The company just added its ninth office and operates nine data centers globally. It has built most of its own cloud infrastructure and even manufactures its own appliances.

But it has never succumbed to the allure of direct sales. “One of the things we often hear in the company is ‘partner first,’” Richards said. That’s reflected in policies like sending replacement parts to MSPs before asking that the original parts be returned to the factory. “We built the company on the assumption that [the MSP’s] relationship with the customer is the most important thing,” Richard said.

Datto further supports MSPs through an online cloud management facility that partners can use to monitor the status of the data they’re managing for customers as well as file support tickets, buy products and get access to a full line of training and documentation materials.

Next target: networks

Now the company is expanding into the networking market via the acquisition last month of Open Mesh Inc., a maker of plug-and-play wireless mesh networks. The company thinks its MSP-focused approach will transplant well to that business. “When we looked at the networking market driven by MSPs to small and medium businesses, it looks a lot like the market for business continuity and disaster recovery did 10 years ago,” Richards said.

Datto last week launched a line of switches, Wi-Fi routers and integrated network appliances with the same kind of ease-of-management features it brings to business continuity. With 90,000 deployed networks and 300,000 access points, Open Mesh plugs an important technology gap for small businesses and also brings along a list of more than 5,000 MSPs that overlaps little with Datto’s network.

The company is also applying technology in its high-end appliances to battling the ransomware epidemic. A new feature launched in November tests every backup image to look for signs of ransomware, such as missing files. “If we find ransomware, we notify the partner so they can tell the customer and fix it immediately,” Richards said. “It’s all part of improving the MSP-customer relationship.”

Here’s the full interview:

Photo via theCUBE

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