Kaseya’s Fred Voccola: Kaseya 365 Is The Foundation For What Comes Next

A $14 billion investment and 10 years in the making, Kaseya 365 came to fruition this week at the Kaseya Connect Global conference in Las Vegas. It’s a vision that CEO Fred Voccola had from the get-go: an all-in-one license with all the core components for MSPs to manage, secure, and back up their customers’ endpoints.

“That was the vision all along,” Voccola tells MSP Success. “For the last 10 years, it’s been a big part of my life.”

But as monumental as Kaseya 365 is, it’s just part of Voccola’s overarching vision: “To have one license, an IT Complete license. This is the start of that. The last 10 years was getting the foundation ready,” he says. “What comes next will be much faster. It’s a lot easier to build the building once the foundation is built.”

He adds, “We’ll be releasing, in a three- to six-month incremental cycle, enhancements to Kaseya 365. Just like Microsoft has multiple flavors of M365. Same idea. And this is the first stage.”

Corey O’Donnell, SVP of strategy and marketing, likens Kaseya 365 to “the chewy center” of a Tootsie Pop. “If you look at Tootsie Pops and you say, ‘OK, one’s cherry and one’s grape.’ We have that amongst our customer base. When you think of IT Complete, there are more than 40 different solutions in there. And so there’s not an automatic commonality that exists between a wide preponderance of customers that they all have the same modules from IT Complete.”

The commonality can be achieved with the “chewy center” of Kaseya 365, O’Donnell notes. “It’s something that you can almost count on that most people are going to adopt because it has the essential components that you need for endpoints—to be able to manage, secure, and backup up those endpoints,” he says. “And so for us, that’s exciting in a bunch of different ways because now you’ve got something that is a foundational block to build out your IT Complete platform on.”

With that higher degree of commonality, he continues, “when you start thinking about building automations, when you start thinking about how do you make those products even better, you’ve got a much larger audience that consistently all has that same stack of solutions. So it just becomes easy to know that any change you make is going to have much greater impact.”

Pricing is a huge part of the strategy too. At his keynote address on the opening day of Kaseya Connect, Voccola told the 6,000+ attendees: “Our strategy is to charge 30 to 50% less for every component of our kit relative to our competitors. We do that for two reasons. The first, we want you to make more money and we want you not to have to make hard choices about providing proper levels of IT and security versus financial decisions. The second is because we can provide and invest more than our competitors in product innovation, charge less for our technologies, and still make more money because IT Complete is providing a comprehensive solution to you. So if we can have 100% of your business financially, it works for us to charge you less for it. It is a true win-win.”

Kaseya 365 Drivers

For Kaseya 365 specifically, Voccola tells MSP Success the drivers were twofold. “What I hear too many MSPs say is, ‘My business is growing, but I’m struggling financially.’ They’re providing a needed service that’s in demand and they’re struggling financially. And that means that there’s something wrong. There’s a need in the market for something that allows that MSP who’s growing to not struggle financially. The average MSP does 8 to 9% profit margin. That’s terrible. That’s not relative to the value they’re providing. That doesn’t make sense now. So that’s one of the drivers for it.”

He continues, “The other thing we hear a lot from MSPs is, ‘I can’t get my customers to pay for what they need.’ And a lot of MSPs are giving them what they need anyway, despite them not paying for it. Because God forbid, if that end customer gets breached, the MSP’s going to get blamed no matter what. So we think we solve both problems.”

At a price of $3.99 for Kaseya 365 Pro and $1.75 for Kaseya 365 Express (which excludes the MDR), it enables MSPs to protect all the endpoints of customers who don’t want to pay for it, and still make a good profit, Voccola says.

Asked if Kaseya 365 might ever be offered month to month, Voccola says, “No. I mean, never say never. The answer is right now, I never imagine it.”

With monthly licensing, he says, “You can’t invest. It’s very difficult to be a software company and have your business, your revenue stream, be month to month and have no backlog of revenue, and you’re making long-term investment decisions.”

The introductory pricing is available for both existing partners and net-new partners, O’Donnell says. “So for the Pro, $3.99 is the promotional price; $5.25 is the list price for that. We have not set a timeframe on when that will change. … The second part of that price is that it is the lock-in price for anyone who is a current partner … so if they upgrade now they get locked in. So that way they know, ‘OK, today my needs are X, but tomorrow my needs will grow and I can forecast three years out into the future and know pretty much what it’s going to cost me to be able to provide these services.’ So, in addition to all the stuff we announced with our Partner [First] Pledge, we hope that it’s a big help to people to have that kind of economic outlook.”

Shared Risk

The Partner First Pledge, unveiled during the keynote, has several initiatives around licensing and pricing, which Voccola explained on stage.

“Over the last 10 years, when we think about what partnership means, we as a company, we stick our chest out and we say, what do we stand for? What are our values? What does partnership mean? … Two things that we are pledging moving forward. One, we will share in the commercial risk of our MSP partner. And we’ll continue to innovate and invest for your success.”

The Pledge now formalizes how Kaseya has always done business, Voccola says. “When you don’t formalize something, it’s very hard to communicate it to the masses. I’ll give you a great example. Our standard commercial practices, we have one-year and three-year subscriptions for everything that we sell. The way we’ve done business forever. That message got a little bit muffled.”

He continues, “Same with catastrophic protection. If one of our partners had a customer that, say, made 30% of their business, and that customer left them, and the MSP has a bunch of hardware and software associated with that customer and they can’t immediately redeploy it, we would always work it out with them. Same with the FLEXSpend. FLEXSpend is something we’ve been doing for a while. Again, it was always a one-on-one conversation with an account manager. So we formalized it. We want to make sure that everyone can benefit from it, not just the people who are smart enough to ask the account manager.”

He adds, “The important thing I would say there is we have to make sure that an MSP powered by Kaseya makes the most money and has the most technical and financial flexibility.”

The Next Decade

As for his next decade, Voccola says this: “I want to be one of the six most valuable software companies in the world … by the end of this decade.”

Will he take the company public? “No short-term plan,” Voccola says. “Here’s what our bankers would say. Given our size, this company will be a publicly traded company at some point. But nothing has to happen. The chances are that will happen. Does that happen in the next 12 months? No. Does that happen in the next 36 months? Maybe. Is this a publicly traded company in the next five years? Yes, most likely.”

Colleen Frye is executive editor of MSP Success. A veteran of the B2B publishing industry, she has been covering the channel for the last 17 years.



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