Datto Drive Service Exits Beta With Exabyte Giveaway

Lorna GareyDatto on Monday officially moves its Datto Drive file sync and share product out of beta. Datto Drive will be free for one year for the first 1 million small businesses that sign up for the service. After that, it will cost $10 per month per terabyte, regardless of seats.

Brooks Borcherding, chief revenue officer for Datto, told Channel Partners that the product has been well received by partners and customers during its limited release.

“We’ve taken a very mature commoditized product and are offering it in a unique way as a hosted service,” says Borcherding.

Datto's Brooks BorcherdingDatto didn’t reinvent the FSS wheel — it signed a global license agreement with ownCloud, a well-regarded and feature-rich open-source file access platform that’s compatible with most enterprise file systems and object stores. ownCloud brings security features critical to businesses, including encryption of data in transit and at rest, a secure Web-based admin interface and native authentication services. Partners can generate reports on who is accessing various data, when, and from where.

This is in contrast to some of the consumer-level sync and share services that many SMBs – and a surprising number of large and midsize companies – now use to dodge the cost of standalone enterprise-class services, such as Box or Dropbox. They can cost $15 per seat, per month, a significant outlay over time.

“Current file sync and share services are overpriced solutions for small businesses,” said Austin McChord, CEO and founder of Datto, in a statement. “Datto Drive is just one of many ways we’re empowering our partners to help small businesses run more efficiently and cost effectively. Better yet, we’re going to give away the first 1 million instances for Datto Drive for the first year for free.”{ad}

Still, the standalone FSS space is a crowded and commoditized market with razor-thin margins — especially when you’re giving the service away. Gartner estimates that by 2018, less than 10 percent of today’s standalone enterprise FSS offerings will still exist. Competition is not just among FSS vendors. Microsoft, for example, bundles OneDrive for Business subscriptions with Office 365; organizations are allotted a minimum of 1 TB of free online storage space per user, and some can get unlimited space. Meanwhile EFF vendor Box, for example, regularly posts quarterly losses of over $50 million. Dropbox channel chief Hank Humphreys recently told us that it’s added 150,000 paying customers in three years; Datto is aiming …


… for 1 million.

What makes Borcherding think Drive can deliver on that ambition and stay viable long term?

He points to the Datto cloud, which will host the Drive service and is now at more than 200 petabytes, spread across nine global data centers. In April, the company opened new facilities in Germany, Canada and Singapore.

“Even at $10 a terabyte, at scale that could become a significant revenue stream,” he says, adding that the product will also give the Datto brand a major boost, and that partners will benefit — Drive is one more tool to help MSPs engage and retain customers while building recognition of Datto’s slate of offerings.

“Partners can bill the service on their own paper,” said Borcherding. This strategy is in line with what he told us in a February interview, in which he stressed branding — to create demand, to get Datto better known in the SMB space, to create awareness of what’s possible today from a business-continuity perspective, and to help partners generate demand.

As with all of Datto’s products, Drive will be sold only through the channel, though SMBs can sign up on their own now to receive that year of free service.

After the initial trial – or for customers that need more than the included capacity – the cost is $10 per terabyte per month, per company, again regardless of seats. The math is favorable for customers with a lot of employees that work on smaller-size files, such as Office documents. In fact, Borcherding says many partners give the Drive offering away as a value-add, and a way to add stickiness.

He says Datto plans to offer partners ready-made marketing campaigns around Datto Drive. Partners that bring customers in will own that business going forward, after the free trial period is over.

Follow editor in chief @LornaGarey on Twitter.

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