Interview: New Kaseya CEO Talks MSPs, Cloud, BYOD

New Kaseya CEO Yogesh Gupta and Exiting CEO Gerald Blackie describe Insight Venture Partners' investment in the company, and what's next for managed services providers (MSPs). Their key points: Don't confuse new Kaseya ownership with the SolarWinds/N-able, AVG/Level Platforms deals. Here's why.

Joe Panettieri, Former Editorial Director

June 25, 2013

5 Min Read
New Kaseya CEO Yogesh Gupta and Exiting CEO Gerald Blackie look back  and ahead  as the company shifts to new ownership
New Kaseya CEO Yogesh Gupta and Exiting CEO Gerald Blackie look back -- and ahead -- as the company shifts to new ownership.

As Insight Venture Partners acquires Kaseya, New CEO Yogesh Gupta and Exiting CEO Gerald Blackie spoke with MSPmentor. Their key message to managed services providers (MSPs) and corporate customers: Kaseya remains committed to both types of customers. Gupta and Blackie also described how the Insight-Kaseya deal differs from SolarWinds’ recent buyout of N-able Technologies, and AVG’s Level Platforms acquisition. Here are sound bytes from the conversation.

Gupta describing why MSPs should not confuse Kaseya with SolarWinds/N-able and AVG/Level Platforms:

“Those deals involved businesses becoming a small part of somebody larger. That’s completely different than what’s happening at Kaseya. We have a new  investor but we are still Kaseya. Ownership changed but the business has not changed. We’re not being merged into a portfolio where you have to figure out what stays and what goes. Our goal is to grow it into an enormous business — serving both MSPs and corporate customers. The MSP market is a wonderful market to be serving.”

On When the Deal was Hatched:

The executives said Insight has been looking on and off at Kaseya since 2007, but it sounds like discussions accelerated in late 2012 or early 2013.

“Periodically they [Insight] would ask to invest in or buy Kaseya,” Blackie said. “We didn’t pay a lot of attention because it wasn’t [a requirement] at the time.”

But by 2012 or so, MSPmentor believes, Kaseya’s thinking began to change. The company was roughly a $100 million business, self-funded and had no debt. Most acquired rivals in the MSP software market, MSPmentor believes, are typically sub-$30 million players.

Said Blackie about the Insight/Kaseya deal: “It’s a challenge to come up with the [financial] resources at our size that allow Kaseya to get to the half-billion or billion-dollar mark. We were at a crossroads the past year. Do we borrow bank debt? Take on investors? Sell to a strategic buyer? Insight was the proper partner. They understand the market. Their specialty is software. We [Kaseya’s founders] can feel good about our kid going off to college and become an adult.”

When Gupta Learned of the Potential Kaseya Opportunity:

After exiting Oracle/Fatwire, Gupta last year began speaking with Insight Venture Partners about potential opportunities. By late 2012, it sounds like Kaseya was on Gupta’s radar, via the Insight conversations. He attended the Kaseya Connect user conference earlier this year and came away impressed. In fact, Gupta has been quietly working with Blackie and Kaseya for about four months — developing the CEO transition plan that’s now activated.

“At Kaseya Connect I saw an amazing group of MSPs and customers. They are all looking for the platform to continue to gain capabilities. And the platform will continue to be enhanced and it will grow, with excellence in support.”

Gupta on Kaseya’s Commitment to MSPs and Long-term Focus:

“The more we looked [at the deal] the more we realized the MSP market is a great customer base. MSPs are looking for someone who will be around for the next five to 10 years. Remember, we’re the biggest market player. By far.”

“We are absolutely, undeniably committed to MSPs. Are we only going to do MSPs? Of course we’ll work with non-MSPs.”

Gupta on the evolving MSP market: “I think it’s an underserved market. The market needs have changed. People are starting to use public cloud services. Think about things like BYOD or Salesforce administration services. Or the social trend. All of those things need to be managed, administered and reliably delivered.”

Insight Venture Partners has investments in Kaseya and GFI Software. Will the companies partner or more?

Gupta’s response: “It’s a fair question. My answer is straightforward. If it makes business sense to partner with [GFI] then we will. We are two independent companies. I’ve known [GFI CEO] Walter Scott for many years. He is one of the reasons I spoke with Insight. I don’t see something beyond a potential partnership with GFI, and any potential partnership would have to make sense. The goal is to do what’s right for customers and MSPs. Businesses exist to serve customers. Without a customer you don’t have a business. If it makes sense to partner inside or outside the portfolio, we’ll do it.”

On whether Kaseya will make acquisitions:

  • Blackie has no direct knowledge of any such plans since he has essentially exited the company. But he offered this nugget: “There are multiple ways to do growth. Look at what Insight did with GFI [making acquisitions]. That’s a decent formula.”

  • Gupta added: “We will do what’s right for the business. If we think certain tuck-ins makes sense we’ll do them. But let’s wait and see. It’s about identifying the right market and capabilities. Acquisitions are just one way of solving a customer need.”

On whether Kaseya will adjust its pricing or business models in the weeks or months ahead:

Gupta said MSPs and customers should not expect a shock to the system. Kaseya’s transition to the subscription model was completed in 2012, and the company will stick with that model, he said.

Blackie on his next move:

Stay tuned. MSPmentor will post a follow-up blog shortly on this topic.

Gupta on his first priorities at Kaseya:

“I think my first priority is to talk to employees. And talk to customers. I’ll be [visiting] seven Kaseya offices in the next six days.

Gupta on the MSP opportunities ahead:

He sees public and private cloud, mobile and social as key opportunities. But he’s also warning MSPs not to overlook continued bread-and-butter opportunities with PCs, servers and traditional IT. Gupta noted that Stewart Alsop predicted in 1994 that the last mainframe will be unplugged in 5 years. Alsop, obviously, was dead wrong. Apply that example to the PC market and MSPs should continue generating management revenues for years to come, even as they pursue new opportunities.

“We [Kaseya] will be there with them [MSPs],” said Gupta. “We want to make sure Kaseya’s single platform — the value of the platform — is extended to manage whatever else MSPs require.”

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About the Author(s)

Joe Panettieri

Former Editorial Director, Nine Lives Media, a division of Penton Media

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