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From Datto 500 to Inc. 500

From Datto Inc.’s Norwalk headquarters, Austin McChord monitors server networks from coast to coast and overseas.

If the 5,500 percent growth Datto Inc. achieved over a three-year period seems almost a figure in the abstract, for tangible evidence just visit its Norwalk offices where crews are readying a second floor for the data backup company’s use.

And if you are wondering how a company puts up that kind of growth in a down economy, wander into the “command room” where in late August a news feed showed Hurricane Isaac pummeling Louisiana, even as others tracked the status of servers under Datto’s watch.

If a coincidence that Inc. magazine ranked Datto 38th in its annual Inc. 500 list on the one-year anniversary that Tropical Storm Irene struck Connecticut, it also hammered home the company’s appeal as an easy way to back up files, while maintaining access to data during events that disrupt entire company networks.

It was not so long ago that founder Austin McChord was hunkered down in a basement office of his father’s Wilton engineering firm, fresh out of school with an idea for a small data storage device – ironically the Datto 500 – that now occupies a museum shelf of sorts at Datto’s Merritt 7 offices in Norwalk.

“Ironically, all those failed,” McChord said. “That was being sold to consumers and what we ended up hearing was that IT service providers … wanted to resell it and they wanted to sell it to businesses. So what ended up happening is we kept tugging at that string because this market was calling us.”

In 2009, Datto abandoned direct sales in favor of those resellers, and revenue shot up, even as competing backup services such as Backblaze, Carbonite, CrashPlan, Dropbox, JungleDisk and Mozy from EMC Corp. also attacked the market.

“From the technology standpoint, we’ve always been ahead of the game,” McChord said. “What’s really helped us, when we made that switch to go channel only, then we started taking feedback from the resellers who said: ‘Well, wouldn’t it be great if the product really could do this or do that?’ And so we got all this feedback in and we kept iterating on it.”

In the event of a downed server, Datto’s SIRIS server can spin out an identical copy in less than six seconds – a short enough period of time that many end users do not even notice their email server died. If a company’s building network goes offline, Datto can reconstitute a company’s IT infrastructure from its own data centers.

“There’s a reseller of ours up in Ridgefield,” McChord recalled. “He actually had a customer and they took a (Datto) appliance from their office and brought it to the CEO’s house, and spun up the (system) there.”

At the touch of a key, McChord can bring up maps that show all the power or network outages in the country where Datto backs up servers, with Hurricane Isaac’s impact clearly visible as a cluster of blue icons signifying down time.

The company has 120 people today and its new floor can accommodate at least 80 more where Webloyalty was once based before its 2011 sale to Stamford-based Affinion Group Holdings, which itself barely made the Inc. 5000 list with single-digit growth.

Asked to describe building a company in a recession and its aftermath, McChord’s response was simple.

“We never existed during good economic times, so it’s hard to really tell you the difference,” he said.

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