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Fred Voccola Kaseya 2

Hello Again, Kaseya

In an exclusive ChannelE2E interview, Kaseya CEO Fred Voccola described a rapidly evolving company — one that is growing fast again, engaging more closely with MSPs, focused on net promoter scores (NPS), preparing to announce acquisitions in the next 30 to 60 days, and hoping to march toward an IPO further down the road.

Update: December 24, 2015, 11:00 a.m. ET: In an updated interview, CEO Fred Voccola shares end-of-2015 perspectives and next moves with ChannelE2E’s readers.

Original November 2015 Story

Under co-founder and former CEO Gerald Blackie, Kaseya helped to pioneer the MSP software market roughly a decade ago and grew to become one of the top providers of RMM (remote monitoring and management) software. But enhanced competition, a shifting software licensing model, debates about serving midsize enterprises, and a price war with ConnectWise’s LabTech Software undermined the company in some ways over recent years.

By the time Insight Venture Partners acquired Kaseya in 2013, the company installed CA Technologies veteran Yogesh Gupta as CEO. Kaseya was still well-known with a strong MSP base, but some pundits (myself included) wondered if the brand’s best years were behind it. And frankly, I lost touch a bit with the company during my own MSP industry hiatus from May 2014 through August 2015.

Kaseya: Growing Again, Meeting MSPs

fred voccola

CEO Fred Voccola

Fast forward to present day. What is the current state of Kaseya? CEO Fred Voccola, who succeeded Yogesh Gupta in July 2015, answered ChannelE2E’s questions this morning. Many of the metrics appear strong:

  • Voccola has met with more than 120 customers — mostly MSPs — since his arrival four months ago.
  • The company is growing “north of 30 percent” this year.
  • More than 90 percent of the company’s revenues — close to $100 million — involves the MSP community.
  • In the past quarter, Kaseya has added more than 300 MSPs as customers. That’s roughly 100 per month — a figure that ranks at the high end of metrics I’ve heard while covering the industry since 2008.
  • Customer churn — the percentage of MSPs that Kaseya loses from the platform — has dropped. When churn occurs, nearly all of the cases involve an MSP getting acquired or the MSP no longer in the market.
  • For October 2015, Kaseya had a negative churn rate — meaning that existing MSPs spent more with the company in October 2015 vs. their same spend in Oct. 2014.

The reality check from Voccola: “There are a lot of misperceptions about Kaseya in the market. We haven’t done a good job communicating with the market.” Some of that misperception involves Kaseya’s former approach of taking the high road when rivals make competitive claims about the company. Going forward, the company plans to more actively address competitive claims.

MSP Software, Cloud Competition

No doubt, many rivals remain strong. Among the players to watch:

  • Autotask is better known in the PSA market but now has an RMM platform as well.
  • CA Technologies now promotes a range of service provider tools at the higher-end of the market, with a growing focus on the so-called application economy.
  • Continuum Managed Services is growing nearly 40 percent annually according to sources close to that company.
  • ConnectWise and its LabTech business next week are set to host IT Nation — one of the industry’s largest events.
  • LogicMonitor is winning business at the high-end of the market and will have a presence at IT Nation.
  • LOGICnow is pushing far beyond traditional monitoring software and introducing big data-driven software to help MSPs spot upsell and cross sell opportunities.
  • SolarWinds N-able is still in growth mode amid a shift to private equity ownership.
  • Whom did I miss?

Still, not all of the players are performing well. AVG Technologies’ Managed Workplace platform, for instance, appears to be losing momentum to rivals amid layoffs and an SMB team reorganization.

Kaseya: Priorities, Acquisitions and IPO?

KaseyaNear term, Kaseya’s top two priorities involve becoming a customer-centric and  employee-centric company. “Call them priorities number 1 and number 1a,” Voccola says.

The journey will also involve acquisitions — including new deals within weeks — and a long-term plan for an initial public offering (IPO).

Since Insight acquired Kaseya in 2013, the company’s business value has doubled based on metrics like EBITDA, growth and churn rates, Voccola said. “The challenge is we’re not a publicly held company, so we can’t point to a stock chart that says our shares rose from $10 to $20.”

Still, the company has “bigger aspirations. We think our value should increase 75 to 100 percent per year.” Some of the growth will involve acquisitions. And some will involve organic cross-selling across the Kaseya product lines, which include:

  • Kaseya VSA for IT systems management and automation.
  • Kaseya Authanvil for identity and access management.
  • Kaseya EMM for enterprise mobility management.
  • Kasya 365 Command for Office 365 and Microsoft Online Services administration.
  • Kaseya Traverse for cloud monitoring and management.

Meanwhile, Kaseya’s owner — Insight Venture Partners — has just raised another multi-billion fund, and some of that money could flow Kaseya’s way if the company needed it for additional M&A activity, Voccola said while also noting:

“We are generating a lot of cash flow. We’re not burning cash. If we wanted to buy a company for $500 million we can do it. There are not plans to do that, but we have that type of capability.”

Instead, it sounds like tuck-in deals — in new areas — are expected within the next few weeks. “We plan on announcing some acquisitions in the next 30 to 60 days,” he says. “Very, very interesting acquisitions.”

Kaseya’s Employees and MSPs

Kaseya cut about 40 people in the September timeframe amid a reorganization, but the net loss was only about 5 people amid new hires at the time. And more hires are on the way — particularly in the 160-person R&D group, where engineering will add about 15 new positions over the next quarter or two.

Alex Cuevas

Alex Cuevas

Meanwhile, Kaseya launched a Customer Success Program in August 2015 led by Chief Customer Officer Alex Cuevas. At the time, the company promised to hit a range of 90-day milestone goals. Technically, the deadline is due next week — but many of the goals already are in place.

For instance, Kaseya has overhauled its success methodology — the way it onboards training, education, account management, support, configurations and ongoing best practices audits. The company this week also is meeting with roughly 50 customers and gathering feedback on a two-year product roadmap. “We’ve got MSPs from across the world offering feedback — from Australia to New Jersey,” says the Jersey native.

On the MSP front, some folks wonder if the company still truly understands the MSP mindset. Voccola’s response: Half of Kaseya’s executive team comes from an MSP — including All Covered veteran Miguel Lopez. And every month, the company is completing two field events — customer gatherings with MSPs — in North America and abroad.

Reinforcing Kaseya’s Priorities

Until recent months, Voccola concedes, the company had “lost its way a bit — meaning that we need to communicate with the industry, and we need to make the experience of dealing with Kaseya world-class. If someone is working with Kaseya, it should be a great experience.”

Toward that end, the new Kaseya 9.2 release was developed to ensure “every feature came from our customer base. There was no ivory tower product guy” dictating what’s best for MSPs. Next up, watch for Kaseya to evolve its pricing and consumption model, while  also ensuring end customers know how to find Kaseya VSA engineers.

“You’ll also find that we’re making sure there’s no conflict at all with our channel partners and our salesforce,” says Voccola.  “I don’t want to get into the stories about how Kaseya had channel conflict in the past. That’s gone. We need to always, always train existing employees in not just the product. But also in how to be better at what they do so that they enjoy their careers and have upside.”

The ultimate goal? Sure, Kaseya wants to make acquisitions and grow — and perhaps even IPO roughly 2 or 3 years down the road. But the key goal — the metric for success — involves Kaseya’s net promoter score (NPS). The company expects its NPS score to be in the top 15 percent of all service providing companies in the world by next year. Achieve that goal, Kaseya believes, and even more MSP business will flow the company’s way.

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2 Comments

Comments

    chris:

    Fred is a great guy and leader. He has a great vision and we are glad to be associated with his team.

    Joe Panettieri:

    Hey Chris: Always good to hear from you. Thanks for your readership over the years. The interview with Fred was pretty interesting. Each time I asked a question he responded with a comprehensive answer that didn’t sound scripted. It was a mix of facts (“here are our numbers”) and emotion (“here’s why I think we’ve been misunderstood, and here’s how we’ll correct it”). And he didn’t pause to search for answers. They just arrived like a tennis player returning serve.

    I’m not suggesting that Kaseya somehow has returned to its glory days. But Fred did help me to turn the page on some of my perceptions about the company. Some MSPs have started emailing me privately with additional thoughts. Overall, it seems to be a message of progress. Fingers crossed, I’ll be able to share those views in the days ahead.

    Thanks again.
    -jp

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