Kaseya Completes Shift to Subscription Software Pricing

Kaseya Completes Shift to Subscription Software Pricing

Kaseya, which develops IT automation software for MSPs and enterprises, has shifted its software licensing model to a subscription approach. The transition was completed in 2012, and the company experienced strong profits and growth amid the transition, according to CEO Gerald Blackie. At the same time, Senior VP Liz Lederer has been helping to round out Kaseya's MSP and enterprise IT business with a more formalized channel partner program. Here's the background.

"Our execution on the move to a subscription model was pretty impressive for us," said Blackie. "I worried about that transition for two years.  You no longer recognize the revenue up front.You’re betting the customer will continue to consume, through the subscription, because they are happy. And our customers are happy. We made the transition. Check the successful IPOs and everyone is going this route. It’s a simpler model. People pay for what they use." Earlier in its history, Kaseya used tiered pricing models where some partners purchased more licenses up-front than were initially needed. That model is now gone.

At the same time, Kaseya has pushed beyond on-premises software to offer a range of SaaS-oriented tools. Some of the solutions run on Amazon Web Services. Others are virtualized, atop VMware, in StratoGen's cloud.

  • Where Amazon Fits In: "In the early years [of our SaaS push] we tried Amazon but Amazon really couldn't implement the Windows platform at the time, and our service is Windows-based. Amazon has gotten a lot better. We do have quite a bit of our cloud services on Amazon. We use Amazon as a quick solution to stand up a supplemental framework whenever needed."
  • Where StratoGen Fits In: "When it comes to our own e-commerce front end and to support all of the infrastructure you [as an MSP] need, and selecting services you want to consume. That's when StratoGen enters the picture."
Overall, Blackie sees the market through two primary lenses:
  1. People -- the MSPs and IT service providers -- who provide services in return for money. "That can be in the older managed services category. But it also goes to opportunities like [managing] point of sale devices, digital signage, medical devices -- and other areas where you get compensated and make a profit by delivering efficiency."
  2. Corporate customers, including IT managers who strive for perfection. "They want fewer point solutions," he said. "They are at the end of their 10- to 15-year lifecycle with older point solutions and suites. A lot are getting swapped out now." Kaseya is increasingly the replacement solution, he said.
Blackie remains on the road visiting partners and customers. Among his most recent stops: A visit to Russia to meet a key partner. In addition to Kaseya's work with MSPs and enterprise IT departments, watch for the company to potentially work more closely with distributors and resellers that, in turn, sell into corporate IT.

Partner Program

Liz Lederer, senior VP of global field marketing & Americas channel programs, has been helping Kaseya resellers to gain more structure and margin predictability. Most of the reseller deals involve midsize customer engagements, she says. The latest Kaseya 6.3 release, she ads, gives channel partners even more flexibility in terms of how they engage customers. "The biggest thing we want to do is make our programs global in nature with a common look and feel," said Lederer.

Lederer also oversees vendor partner engagements for the Kaseya Connect User Conference (April 29-May 1, Las Vegas). I think the 2012 event attracted about 500 people, and this year's event is on track to maintain its growth.

Next Time We Talk

Blackie and the rest of the Kaseya executive team will be at the conference. Prior to our recent call, it had been awhile since Blackie and I had caught up. Our recent conversation answered many of my questions -- including the software licenses model update. But I didn't have a chance to toss in additional questions about potential opportunities in cloud monitoring, big data analysis, mobile and more.

Still, it was good to catch up. And I'm sure we'll tackle those subjects, and more, next time around.
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