Datto Sues Slide: A Deep Dive into Trade Secrets and MSP Market Implications

Full transcript and links to extended interviews is at https://businessof.tech/podcast/datto-sues-slide-2025/

What happens when a founder returns to disrupt the company he built, and that company sues him for stealing its secrets? This is the central conflict in the case of Datto v. Slide, a legal battle unfolding in Delaware. Datto, now owned by Kaseya, accuses Slide, founded by former Datto CEO Austin McCord, of misappropriating proprietary technology related to its Hardware Independent Restore (HIR) system. Slide, on the other hand, asserts that it developed its technology independently and that Datto's lawsuit is merely a distraction from the reality that better products will prevail in the market.

 

The lawsuit includes multiple allegations, such as trade secret misappropriation and unfair competition. Datto claims that Slide's technology closely resembles its own HIR, which allows for near-instant recovery of systems across different virtual environments. The complaint details how Datto's HIR operates and the proprietary elements it encompasses, arguing that Slide's founders had access to these trade secrets and used them to expedite their competing platform. Slide counters these claims by emphasizing that its product was built from the ground up, utilizing modern tools and practices that do not infringe on Datto's intellectual property.

 

To provide further context, the podcast features interviews with Slide's founders, who discuss the safeguards they implemented during development to ensure compliance with legal obligations and to avoid using any confidential information from Datto. They assert that their technology is fundamentally different and that their marketing strategies, including a dramatic demonstration involving the destruction of Datto hardware, were intended as light-hearted competition rather than disparagement. The conversation highlights the importance of transparency and trust for Managed Service Providers (MSPs) considering which platform to support.

 

The episode also delves into the broader implications of the case, particularly how litigation can serve as a competitive strategy in a consolidating market. With Kaseya reportedly carrying significant debt, the lawsuit may reflect a defensive posture rather than a commitment to innovation. For MSPs, the ongoing legal battle raises questions about vendor reliability and the potential distractions that litigation can create. Ultimately, the podcast suggests that while the case may settle, the reputational costs for Kaseya could be substantial, impacting its image as a channel-friendly company.

 

00:00 Intro: Founder vs Incumbent

01:45 Case Summary: Datto v. Slide Explained

02:22 Inside HIR: The Alleged Trade Secret

04:47 Slide’s Defense

06:05 Timeline and Next Steps

08:36 Interview: Slide Founders Respond

14:04 Expert Analysis: Bob Zeidman

20:10 Expert Analysis: Prof. Camilla Hrdy

24:10 Market Context: Kaseya’s Debt & Strategy

26:24 Lessons for MSPs

28:33 Closing Take: What This Means for the Channel

 

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