Datasite: Transforming to the Product Model
Innovative Redaction Tool, Acquisitions and M&A Technology Award Winners.
One of my favourite transformation success stories is Datasite. The story comes from Christian Idiodi, who was on Product Circle Chat, and tells the story of what happens when product thinking is treated as a project and outsourced.
Changes to the ways of working do not happen overnight. It requires a longer term commitment and a strong motivation for change.
There was nothing that jumped out of the pages louder than when I read that prior to adoption the Product Model, the company had spent over $6M over 6 years on replatforming that generated less than $30,000 in Revenue.
This hurts me.
That’s why I teach the Product Financials Masterclass covering the Product P&L and how to create a financial Business Case Model for Product People.
But let’s get back on track.
Let’s talk Results
This is one of 7 articles on the organisations positively impacted by moving to the Product Model that is outlines in the book “Transformed: Moving to the Operating Model” and what happened after the book was published.
And, what do the results look like now?
We covered Adobe here. Now let's look at Datasite.
Datasite (part VII and chapter 35)
Category: Financial Services. M&A
Location: Minneapolis United States
Head of Product: Christian Idiodi
The story of Datasite's transformation is one of significant internal and external pressures leading to a seismic cultural and operational shift. Previously known as Merrill Corporation, the company faced a rapidly changing market and an urgent need to innovate. The transition from a sales-driven to a product-centric organisation was motivated by financial struggles, customer demands, and competition, and it revolutionised how they approached problem-solving, product development, and company culture.
Before the Transformation
Before transforming into Datasite, Merrill Corporation was a traditional family-owned business, primarily offering financial printing services. As digital technologies emerged, Merrill's print-based services became outdated, slow, and expensive compared to the tech-driven, agile solutions competitors were offering. The company was burdened by high debt, a lack of technological innovation, and a rigid, hierarchical culture that centred on sales. Engineering was outsourced and treated as a service provider rather than an integral part of the product development process. This disconnection between sales and technology, coupled with their inability to innovate, left Merrill vulnerable in the market.
Merrill’s internal culture exacerbated these issues. The sales team dominated decision-making, dictating what problems the company solved and how solutions were built. Engineering was sidelined, with no autonomy or involvement in key business decisions. A top-down, hierarchical structure discouraged cross-functional collaboration, which stifled innovation. The physical work environment further mirrored this disconnected culture, with isolated workspaces and high cubicles that hampered communication.
Externally, the company faced intense pressure to change. Merrill’s services were no longer competitive as the shift to digital-first solutions accelerated. Competitors like Workiva were offering more agile, cost-effective, cloud-based solutions. Customers began to demand faster, more intuitive experiences, driving home the need for Merrill to evolve or risk losing its relevance.
The Need for Change
Merrill Corporation’s urgency to change came from both internal inefficiencies and external threats. Internally, the company had spent over $6 million across six years on a replatforming project that generated less than $30,000 in revenue. This financial failure, combined with outdated technology, prompted leadership to recognise the dire need for a new approach.
Externally, the rise of digital competitors and shifting customer expectations demanded a transformation. Merrill’s legacy business was being disrupted by more agile, technologically advanced companies. Customers in the M&A space were increasingly expecting faster, more secure, and tech-driven solutions—demands Merrill could not meet with their existing sales-driven culture and technology stack.
Merrill’s transformation into Datasite was rooted in a need to overcome these challenges and reinvent how they operated, decided which problems to solve, and built their products.
How They Changed
The Way They Solved Problems
The first significant shift at Datasite was how the company decided what problems to solve. Before the transformation, decisions were driven almost exclusively by the sales team. The company built features because sales teams requested them, not because they solved meaningful customer problems. This reactive approach led to a lack of focus and innovation.
From Sales-Dictated to Customer-Centric Problem Solving
The transformation began by prioritising customer needs over sales requests. Datasite empowered product teams to engage directly with customers, uncovering their pain points and validating solutions before building anything. Product managers, engineers, and designers worked together in cross-functional teams to ensure that the problems they chose to solve were based on real customer insights rather than internal pressure from sales.
From Top-Down to Empowered Teams
The company dismantled its rigid hierarchy. Previously, decisions cascaded from the top, with little input from lower-level teams. The new model empowered product teams, giving them the autonomy to make decisions and own the problem-solving process. This shift enabled faster, more agile responses to market changes and customer needs. Teams became more collaborative, involving not just product managers but also engineers and designers in the problem-solving process.
From Outsourced to Internal Engineering
One of the most significant changes was the decision to build internal engineering capabilities. Outsourcing had limited Datasite’s ability to innovate and respond quickly to customer needs. By bringing engineering in-house and making it an integral part of cross-functional product teams, Datasite created a more agile, responsive environment. Engineers were now part of the problem-solving process, contributing to decisions and taking ownership of technical solutions.
The Way They Built
The transformation also brought a complete overhaul in how Datasite built products. The old model, where technology was seen as a service provider for sales, was scrapped in favour of a more integrated, product-centric approach.
From Legacy Systems to Microservices Architecture
Datasite recognised the limitations of their outdated legacy systems. These systems were slow, fragile, and unable to meet modern demands. They decided to invest in a new microservices-based architecture, which allowed them to build and deploy features more rapidly. This shift to microservices improved the stability and scalability of their platform, enabling faster iterations and a more flexible response to market changes.
Embracing Agile and CI/CD
Datasite also adopted Agile development methodologies and implemented Continuous Integration/Continuous Delivery (CI/CD) processes. This move marked a departure from the slow, waterfall approach they had previously relied on. The Agile and CI/CD frameworks enabled them to release new features quickly, gather feedback from customers, and iterate on their solutions. This flexibility was essential in maintaining their competitive edge and meeting evolving customer demands.
Building Internal Engineering Expertise
The shift from outsourcing to building an internal engineering team was crucial. By hiring and retaining skilled engineers, Datasite ensured they had the technical capabilities to support their new product model. The internal engineering team worked closely with product managers and designers, allowing for a more cohesive and efficient product development process. This change not only improved the quality of the products but also enabled faster problem-solving and innovation. This meant bugs and customer issues were found and resolved quickly.
The Way They Decided Which Problems To Solve
The most profound aspect of the transformation at Datasite was the cultural shift that accompanied the operational changes. Before the transformation, the company was characterised by a siloed, sales-driven culture where innovation was stifled, and collaboration was minimal.
Context and Insight
They took a more holistic view of customer needs, market trends and the reasons behind specific challenges. Datasite began making decisions based on a combination of insights (data-driven observations) and context (knowledge and experience).
From Micromanaging to Empowered Problem Solvers
The culture of micromanagement and blame was replaced with a more empowering, collaborative approach. Product teams were no longer dictated to by sales but were given problems to solve, not features to build. This cultural shift required hiring and coaching professional product managers and insourcing engineering talent. Product teams became responsible for their outcomes, fostering a sense of ownership and accountability.
Collaboration Across Teams
Datasite fostered collaboration by breaking down the silos that had previously existed between departments. Cross-functional teams composed of product managers, engineers, and designers worked together, leveraging their collective knowledge and experience to solve customer problems. This collaboration not only improved the quality of solutions but also accelerated the pace of innovation.
Cultural and Physical Changes
The physical office space was redesigned to encourage collaboration. High cubicles and isolated workspaces were replaced with open, collaborative areas that promoted communication and teamwork. This physical transformation reflected the deeper cultural shift towards a more open, innovative, and customer-focused company.
Redaction Tool – Tackling a Critical Problem
When Datasite set out to develop its redaction tool, it was driven by a critical need to improve document security during M&A transactions. Existing redaction tools could hide text or images, but the hidden metadata—often filled with sensitive information—remained intact and vulnerable to forensic recovery. A notable incident in 2019, where poorly redacted legal documents leaked confidential data, underscored just how inadequate many of these tools were.
Key Challenges for Datasite
Deep Redaction: Datasite needed to create a tool that didn’t just hide visible content but also stripped away the underlying metadata, ensuring that no sensitive information could be recovered. This had to work across hundreds or even thousands of documents, without compromising their integrity.
Technical Feasibility: Developing this kind of deep redaction required an innovative approach. Datasite’s engineers needed a way to remove sensitive data and its metadata while ensuring the redacted information could still be restored, with proper permissions, within the system.
User Experience: It was essential that the tool was not only secure but also easy to use. The team focused on making it a seamless part of the Datasite platform, running multiple prototypes and tests to ensure the tool was user-friendly and effective.
Overcoming the Obstacles
Inspired by Google Maps: One of Datasite’s engineers found a creative solution by drawing inspiration from Google Maps. This approach enabled precise removal of both data and metadata without disrupting the rest of the document.
Prototyping for Success: To prove the concept, the team developed an early prototype, which they used to demonstrate the tool’s capabilities to the broader product team and leadership. This early validation was crucial for moving forward.
Collaborating with Customers: Datasite worked with 12 customer discovery partners across Europe and North America to test and refine the tool. This real-world feedback helped ensure the solution meets user needs in different markets.
The Results
Datasite’s innovative tool now automatically redacts entire documents, including virtual data rooms, eliminating the risk of forensic recovery. The technology is so advanced that it even allows users to unredact content when needed, giving them full control. This groundbreaking solution, now patented, offers unparalleled security and has become a standout feature, giving Datasite’s clients peace of mind during high-stakes M&A processes.
After the Transformation
Before the transformation, Merrill Corporation was slow to innovate, with outdated technology and a rigid, sales-driven culture that made it difficult to respond to market changes. It took a long time (and cost a lot) to deliver new capabilities, which left the company vulnerable to faster, tech-driven competitors. The company was losing market share, and its legacy services were becoming irrelevant in a digital-first world. To understand the culture change needed read The Freedom to Grow.
After the transformation, Merrill rebranded as Datasite and became an industry leader. The company’s new, agile product model enabled rapid innovation, allowing it to introduce new features almost daily. One of the most significant achievements was the development of a state-of-the-art redaction tool, addressing a critical need for secure document handling in M&A transactions. This tool provided complete data redaction, including metadata, which ensured clients’ confidential documents were fully protected.
As a result, Datasite saw a 30% increase in revenue by 2019, facilitated over 10,000 M&A deals annually, and solidified its reputation for speed, innovation, and security, positioning itself as a leader in the global M&A market.
Note, to assess the change readiness and conduct Lewin’s force field analysis, we would need to interview employees who were at Datasite before and during the transformation. Learn more about the Datasite Transformation at "Transformed: Moving to the Operating Model"
What Happened Next?
Datasite was acquired by CapVest by the end of 2020. Recently Datasite Cloud Won the M&A Technology of the Year in M&A Advisor’s 15th Annual International M&A Awards (Aug 2024) and has recently acquired Ansarada.
Product Commercials Masterclass
Need to understand more about these longer term business viability goals?
Join the Product Commercials Masterclass.
I take you through how to read an Income Statement or P&L in the Product Commercials Masterclass - P&L for Product Managers
The lessons are bite sized over a few days so you get a chance to practice and use what you’ve learnt in your day to day work!
Want Future Product Transformation Change Stories?
While Adobe’s results are impressive, there are more great examples in Transformed. The other great examples that Marty takes us through are Almosafer, CarMax, Datasite, Kaiser Permanente and Trainline.
Want to go deep into the other Transformation Stories and
View the change from a Force Field Analysis Change lens and let’s get into the HOW of delivering transforming to the Product Model
Find out whether the results continued after the book was published?
Subscribe and be notified when the next Transformation Story drops.
Are you new to Product Management and want to learn from me?
I created a Course. For people new to Product Management.
Aligned it with the Learning Outcomes created by Product greats like Jeff Patton and others. Had it certified by the globally recognised ICAgile.
Choose to spend 2 days learning from me - either face to face or via Zoom - withICAgile Certified Professional in Product Management (ICP-PDM).
And if you’re looking for a sneaky discount, send me an email at irene@phronesisadvisory.com