Efficiency gains and accelerated business growth contribute to ROI of 256% when using Datto integrated solutions
With work returning to normal after more than a year of limitations on business operations and the furlough scheme due to end in September, many organisations will be taking stock of their options.
What lessons have they learnt during the pandemic? What’s worked and what hasn’t? Which changes are worth keeping and which need to be reversed? Where is additional investment needed and where can costs be cut? Should digital transformation and the transition to the cloud be accelerated or slowed down?
Justine Harris, Sales Director UKI at Datto, points out that managed service providers (MSPs) are well poised to help answer these questions.
“In the early days of the pandemic, many assumed the mantle of trusted advisor, helping clients to keep operating securely and productively during the transition to working from home, and they are likely to have an equally important role to play as organisations update IT strategies and assess future requirements.
“MSPs are businesses too and they will be asking many of the same questions as their clients; analysing what they could be doing better to generate profitable, sustainable growth.”
Datto’s own research shows that the fastest-growing MSPs are those that generate a higher proportion of total revenue from managed services*. Such organisations are often also more resilient as recurring revenue from managed services can help absorb the shock of an economic downturn, as the last 18 months have shown.
Faced with growing client demand for managed services and the need to secure sustainable growth themselves, MSPs will be assessing what technologies, tools, and headcount they need to deliver services efficiently. In doing so, one of the key questions they face is whether to adopt a multi-vendor strategy or implement unified solutions from a single vendor.
Datto believes there are big advantages in the latter approach – so much so that it recently commissioned Forrester Consulting to conduct a Total Economic Impact Study on the use of Datto RMM (remote monitoring and management), Autotask PSA (professional services automation), networking, and business continuity and disaster recovery (BCDR) solutions.
According to Forrester’s analysis, the benefits of using integrated solutions are so great that a representative MSP can look forward to an ROI of 256% over a three-year period and payback on its investment within six months.
For its study, The Total Economic Impact™ Of Datto: Cost Savings And Business Benefits Of Using Datto Integrated Solutions, Forrester interviewed four Datto MSP partners that had previously used solutions from multiple vendors and had limited RMM and PSA capabilities.
Interviewees highlighted several problems with their previous set-ups, which meant staff had to spend more time managing backup and recovery for clients. These inefficiencies also made it hard for the MSPs to improve service levels or grow their client base with their existing headcount.
Do any of these complaints sound familiar?
*Inadequate visibility into ticket tracking due to a lack of dashboards or widgets for ticket management, forcing engineers to spend hours on the phone with clients.
*Confusion with engineer availability due to the use of a calendar-driven ticket allocation system rather than a queue based one. *Unreliable solutions leading to timeconsuming technical outages. *Being unable to recover information on backup servers due to technical failures.
*Having to commit several engineers to data recovery and maintenance for just one client in the event of downtime or an outage.
*Lack of confidence in the ability to restore client data due to poor visibility into the success or otherwise of backups.
*Lost revenue from poor tracking and capture of billable time.
The use of Datto solutions has helped the MSPs interviewed overcome these problems and grow their businesses by providing an efficient platform for managing operations and client service delivery, with greater visibility of client endpoints and ticketing, enhanced automation, and secure and reliable BCDR.
In particular, Datto’s integrated PSA, RMM, and BCDR have enabled the MSPs to:
*track work orders better, meet SLAs, and give clients timely, comprehensive service; n
*take on and support additional clients thanks to the efficiency of Datto’s integrated PSA, RMM, and BCDR management services;
*reduce the amount of time spent managing backups and protecting data compared to previous arrangements based on tape storage and/or a combination of hard drives and off-site storage that required constant oversight and tracking by staff.
Harris says that a lot of these efficiency gains are a product of increased levels of automation and integration.
“Some of these are attributed to a particular solution, while others are a benefit of using integrated products from a single vendor. For example, one interviewee noted that new wireless access points sold to a client were automatically pulled under their Datto RMM instance, which, if there was a problem, would automatically create a ticket for engineers.”
Return on investment
To quantify the financial impact of Datto solutions, Forrester analysed the characteristics of the four MSPs interviewed and created a single composite out of its observations, to whit a global MSP with more than 100 small and medium-sized clients, each with 25 to 100 users; operations in the Americas, EMEA and APAC; annual revenues of $5 million; BCDR services from multiple vendors; and limited PSA/RMM capabilities so that employees have to keep track of service request tickets individually.
Next, it calculated the impact of implementing Datto solutions, including the deployment of Datto RMM and Autotask PSA to all clients in the first year (including training for all employees) and the migration of one-third of clients to Datto’s BCDR solution in year one and two thirds in year two.
Based on feedback and insights from the MSPs in question, Forrester suggests that such an organisation could look forward to financial gains and productivity improvements across the board. These include:
*$100,000+ of annual client base growth over and above what it would have experienced otherwise;
*$50,000 in extra billing, thanks to accurate time tracking and documenting of billable work by Autotask PSA;
*50% faster resolution of work order tickets thanks to Datto RMM and Autotask PSA dashboards and widgets that enable MSPs to manage client work in one centralised location, prioritise jobs, and gauge the time needed to resolve them, and, in time, improve self-service for clients through automated services and FAQ pages; and *a 90% drop in productivity losses from downtime. Forrester singles out Datto’s patented Screenshot Verification that alerts MSPs if a backup is experiencing difficulties as a great time-saver during disaster recovery procedures, helping reduce time to recovery from three days to a matter of hours.
Overall, Forrester calculates that its composite organisation would experience benefits with a value of $1,101,844 over a three-year period against costs of $309,432 from annual fees, the expense of migrating clients’ data to the solutions, and employee training. This adds up to a net present value (NPV) of $792,412 and an ROI of 256%, with payback in less than 6 months.
- Benefits over 3 years
- MSP client base growth $432.2K
- Productivity value with RMM/PSA services $372.0K
- Productivity value from reliable BCDR services $175.7K
- Recaptured value from reduced billing leakage $121.8K
- (source: The Total Economic Impact™ Of Datto: Cost Savings And Business Benefits Of Using Datto Integrated Solutions, March 2021)
Harris adds that these savings are just the starting point and that there are many other benefits mentioned by the MSPs that Forrester didn’t quantify for this study.
“An important one,” she says, “is greater client satisfaction, which improves client retention rates and services spend and gives everyone involved greater confidence in the security of their data.
“They also praised Datto for the support that it offers MSP partners, from technical support and help with sales and marketing to networking events and popular industry events, like Datto MSP Technology Days and the DattoCon conference, next scheduled to take place on October 11-13.
“Finally, Datto received plaudits for its commitment to innovation and product development. This not only gives MSPs something new to take to clients but also increases organisations’ confidence that Datto is continuing to meet their changing needs. A good example is the launch of new Virtual SIRIS (vSIRIS) data protection software – a software-only version of the Datto SIRIS business continuity and disaster recovery solution that gives a rapid, hardware-free deployment option for MSPs, including those that haven’t been able to install hardware on client offices due to remote working restrictions.”
Assessing all the savings and benefits possible by standardising on Datto solutions is clearly no easy task. Forrester’s The Total Economic Impact™ Of Datto: Cost Savings And Business Benefits Of Using Datto Integrated Solutions is a good starting point. To download a copy, please visit here.
- * For every 10% increase in the proportion of revenue from managed services, MSPs’ annual growth rates increase by 0.25 to 0.75 points. So, increasing the percentage of your managed services revenue stream from 20% to 70% improves annual growth by 1-4 points (source: Datto Global State of the MSP Report 2020).