Interview: Robin Robins And Kaseya CEO Fred Voccola See Opportunities For MSPs

Kaseya CEO Fred Voccola sat down with Robin Robins to discuss his company’s acquisition of Datto, Kaseya’s secret to growth and the overall economic environment.

The interview has been edited and condensed for clarity.

Robin Robins: Give everybody a little overview of what has happened since your acquisition of Datto. It has been nine months (since the date of this interview).

Fred Voccola: With any change, people get nervous. One of the things we said was that we would support all products, lower prices and support the Datto partner program.

The teams have been great. We picked up a ton of great people when we acquired Datto. We picked up a lot of great customers as well.

RR: Kaseya has had tremendous growth since you became CEO. At the time, the company was about $85 million and a few hundred employees. Now you are over $2 billion.

FV: You know, when I took over Kaseya, it was struggling – to say it nicely. You were the first person to reach out to me. You invited me to an event, the Producers Club, and said you were there to help.

The first six months I was just going around the world and listening to customers about how we screwed up, how messed up our company was and how we could get better.

I was also blown away by how many were willing to give us a second chance. It sounds emotional, but it’s true. They were angry, but after 10 minutes of talking, they told us the things we could do better.

(Since the Datto acquisition, Kaseya has increased in hiring, bringing in more than 150 engineers, 100 more support staff and more than 300 project managers.)

FV: Going to Datto, I saw the same thing. We had Datto MSPs who were customers for seven years and they told us the things we could do better. Keep this. Get rid of this. Improve this. It was constructive feedback, and here we are nine months later, and it is going great.

I’d love to think that we don’t make mistakes, but we make a ton of them. The first line of defense to make sure our MSPs get mistakes fixed is our account manager. We wanted more people who would get that first push and jump on calls.

We’ve lowered the prices of Datto products we bought pretty substantially. On average, these products are down 15%, although that varies depending on different things.

We also continued to invest in our partner program. At one of the first meetings after we signed the deal, I got this deep overview of Datto’s partner program. I was like, “This is awesome!” and I turned to my guys and said, “Why the hell haven’t we been doing this?”

There have been a lot of enhancements to the program as well. A lot of our folks did a great job at enhancing the program. It’s been fun.

RR: You guys had a monster quarter, and really a monster year. Is that through the acquisitions or is that organic?

I just wrote an article for the magazine about the massive layoffs going on. We see companies like Nextiva, Microsoft, Lenovo laying people off. Even Liongard said it was one of the hardest decisions he had to make to lay off people. And you guys have 5,000 employees and you just said you added all these people. What’s going on?

FV: I’ll start by saying we’re super lucky.

We provide a platform for MSPs to deliver IT and security management for their customers. So many small to midsize businesses are digitally transforming.

We saw the same thing happen in the enterprise in the late ’90s. Digital transformations (fundamentally change businesses and provide efficiencies and power. It’s astronomical.

Now these technologies have come downstream, so the dental practice can have e-mail. They can have the same marketing and CRM applications that only a huge enterprise could have had 20 years ago.

Now these dental practices and the other small businesses are dependent upon these applications to have a successful business. They need those applications to be available all the time, and to be secure and enterprise-grade.

It’s going to slow down. We’re preparing for a pretty harsh slowdown. I don’t know if it’s going to be moderate, harsh or somewhere in the middle, but our belief is to prepare for the worst and hope for the best.

As of today, our numbers are very strong. We added over $70 million of recurring revenue in the fourth quarter alone. We did over $100 million of EBITDA.

(Voccola expects the company will see an organic growth rate of around 30% this year, along with three or four acquisitions.)

RR: Is part of your growth that your current MSPs are selling more and you’re selling more licenses, or are you adding more customers?

FV: It’s probably both.

We have a platform called IT Complete – not trying to put everybody to sleep with it, but our goal is to have a platform that has software for every type of managed service that an MSP’s customers want to consume. Whether that is security, compliance, endpoint management, backup or whatever.

We also provide the kit for the MSP to run their business. That’s our value proposition to MSPs: you can get everything in one platform. It’s more integrated commercially, like one bill, one invoice hopefully, to reduce some of the vendor fatigue that people deal with.

It is also technically integrated, and every quarter it gets more and more so, making your engineers more productive because they’re working with a platform that’s deeply integrated.

As a result, we can charge less. We can charge one-third less than competitors. So far, it seems like it is working.

RR: We continue to see companies outsourcing their IT to MSPs. One of our spokespersons added $64,000 in MRR by going co-managed. The total addressable market keeps growing.

FV: The market for MSPs is growing in two ways. First, small businesses do not have the internal capacity to do IT. It’s just too hard. They are spending a larger and larger percentage of their revenue on technology.

The second is midsize businesses. They are the 10-person shops that maybe tried to do some IT before. We believe most of their technology spend is going to be moved to MSPs. It is actually already happening and will continue over the next decade.

We think that doubles the entire market size of what’s available for MSPs, so we’re all benefiting from that.

(Click here to watch Robin’s interview with Fred in its entirety.)

MSP Success Magazine is a print and digital publication dedicated to helping the CEOs and owners of managed IT services businesses build strong, profitable, growth-oriented businesses. Written and published by Robin Robins, founder of Technology Marketing Toolkit, this magazine is uniquely focused on the topics of marketing, client-acquisition, sales, profitability, leadership and personal development.



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