Xeperno finds a sweet spot in NZ local government with Datto

Xeperno finds a sweet spot in NZ local government with Datto

Datto's business continuity technology is engineered for MSPs, but can also be self-managed through partners.

Paul Phillips (Xeperno)

Paul Phillips (Xeperno)

Credit: Supplied

Small and often lightly funded IT shops can find themselves challenged to deliver the range of specialised services, security and robust infrastructure required by their organisations.

Ensuring business continuity can be particularly challenging, especially if existing infrastructure is on the older side.

That is where Datto and partner Xeperno are finding a ready market, particularly among smaller local organisations, including councils.

Many such organisations have invested in back-ups, Xeperno founder Paul Phillips said, but having a backup does not guarantee an IT environment can be easily restored.

After a career in IT management with organisations such as TVNZ and printer Wickliffe, Phillips shifted into distribution with Soft Solutions in New Zealand, specialising in ManageEngine's IT service and operations management software. 

Phillips went on to spend time in Australia, running ManageEngine's regional business and shifting it to a single distributor model before returning to found Xeperno as a ManageEngine specialist nearly three years ago.

The business was built around Phillips' experience of industry, trying to tackle the challenge many IT managers face when attempting to deliver value where a "pragmatic approach to cost management" is required.

Roughly translated, that meant looking for ways to do things without spending a lot of money.

Six months after founding the business, Phillips got introduced to Datto, putting his first device in at Kawerau District Council.

"The more I saw of it the more it appealed to deliver disaster recovery and backing up an environment in order to achieve that," he said.

Datto, he said, was committed to the end result – the ability to restore.

While the core of Datto's market is in managed services, Xeperno is not an MSP, but a solutions and consultancy provider. 

Its clients are generally big enough to have their own IT environments, even if it's "just a rack in a room".

Phillips demonstrated Datto's systems at the 2019 Association of Local Government Information Managers (ALGIM) conference and received some interest, including from Gore District Council, which was also a user of ManageEngine. 

Gore District Council was planning to shift its offices but wanted confidence that if any of its servers or other hardware failed during the move, systems could be restored.

Two weeks later all the servers were backed up to a Datto appliance and replicated off-site. Sure enough and as feared, when a rack was shifted, one of three VMware hosts didn’t start up again. 

Because it had been virtualised on the appliance, however, business continued as usual.

Datto, which claims 350 to 400 channel partners in New Zealand, many of them managed service providers (MSPs), built its business through M&A, most prominently with Backupify and Autotask.

The company mainly "sells to" and "sells through" MSPs, regional vice president of A/NZ James Bergl told Reseller News.

"Everything is designed with the MSP business in mind," Bergl said, including workflows and multitenancy.

James Bergl (Datto)Credit: Christine Wong / ARN
James Bergl (Datto)

In that context, with 95 per cent of the channel being MSPs doing outsourced IT on behalf of clients, Xeperno is among a small minority of partners selling appliances directly to end users.

Bergl said with volume now established, Datto is focusing on more strategic relationships, such as with partners that have growth in disaster backup and security and niches.

Local government has proved one sweet spot in A/NZ as have other users with in-house teams that are not large enough to have expertise in and deliver every single area of IT service now required.

Those organisations can look to partners such as Xeperno for help.

"The sophistication of cyber attacks is higher than ever and it has been really hard for an IT manager or small team to keep up with," Bergl said.

Datto has become more decentralised by default thanks to COVID and has more people on the ground in New Zealand with more recruiting planned.

"We are looking at how to align the best resources," Bergl said. "Having people in NZ has had a positive impact."

While Xeperno is now rolling Datto out to more councils in the deep south, ManageEngine remains the core part of the business.

Datto's technology can be supplied in a bundle with services on a subscription or self-managed with scoped pieces of support work as required.

"They are not just buying a product but the promised value, a commitment to deliver the promised value," Phillips said.

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