Six months into the job Datto EMEA MD Mark Simon is reporting that the business has grown very well in EMEA with strong double digit growth. But it is not a one-size fits all, and plans for the future show differing strategies by country.
“On the ground in EMEA we see very subtle differences in the markets,“ he tells IT Europa. For one thing the routes to market vary: Datto sells directly to MSPs in UK&I, DACH, Nordics and Benelux, via two-tier in other places. And there are other differences among the MSPs: “So the UK seems to have larger MSPs -– even bigger than the US. This may be consolidation. And we don’t really see that consolidation in other markets yet.”
And there is a clear distinction between lifestyle companies and those who are commercially oriented, he says. “The fastest growing ones are necessarily the larger ones. Revenue growth is sometimes a lower priority than in EMEA than else – this came out in our state of the MSP report earlier in the year. Is that because there are more lifestyle companies, or are they trying to get going in the evolutionary cycles?”
“[There is a] Tendency for smaller MSPs to be focused on core customers and not so good with new customers. The challenge at a certain size is growing beyond the core. Some are happy where they are,” he says.
The challenge can also be to move beyond the start point, building skills. Datto comes in with a portfolio that can be taken as a wider range of services but partner enablement in Europe is still being improved. Building that sales pipeline and marketing to prospects are key topics. “DattoCon is the most visible aspect of that but we are seeing a huge demand for sales and marketing training and how to put together sales strategies. We have a well-structured sales and marketing system. But how do we get that extra 10-15% in the market and what drives individual markets?”
The differences are clear: “The Nordics, for example where we are starting to see continuity strategy is straight to cloud, skipping devices in some situations – an interesting difference.”
“Going forward – we are really just scratching the surface in EMEA; we are in the four main markets, we see a lot of runway within the geographies. In DACH, which is the biggest addressable market, it is early days, we are investing heavily there in headcount. And we are not just putting salespeople in the markets – we are resourcing with every part of the business, including engineering, sales and marketing, and other functions. We will grow by investing in those market, we have good distribution in the other markets with the likes of distributor BMSP – a pioneer in the French market.”
MSPs *do* share information, he agrees – they are unlikely to be competing yet, give the size of the addressable market. “I have seen consistent levels of transparency in UK&I, Germany and Benelux. Markets that are a bit less advanced such as France and Italy may be a little less open.”
“From a community point of view we are seeing buying groups and sharing skills. We see the network group in the UK with dedicated experts and there are informal groups. Sometimes it is about sharing best practice and advocacy.”
And the process of consolidation goes on - Larger MSPs are buying expertise and for resources – “acquihiring” Also interestingly, some of the MSPs that are doing well are being led by people who are not MSPs – some from vertical industries and that seems to be happening quite a lot, he reports.
"Continuity is still at an early stage in Germany and France, and we won’t engage in the vanity of opening an office in every country. We will make sure Germany and Nordics accelerate rapidly next year and we investigating other things. In terms of product adoption it will be interesting to see how Cloud Continuity will be adopted in Europe – we think it will accelerate rapidly just as in the US pilot. The fastest growing product - SaaS Protection – backing up Office 365 and Gsuite, plus the ability to support Microsoft Teams from early next year will be another major driver in EMEA.".
