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Cloud


Kaseya CEO: We’re Still in Managed Services Growth Mode

  • Written by Joe Panettieri 1
  • March 4, 2011
Kaseya CEO Gerald Blackie sounds optimistic as the Kaseya Connect User Conference approaches (May 1-3, Las Vegas).

Kaseya CEO Gerald Blackie sounds optimistic as the Kaseya Connect User Conference approaches (May 1-3, Las Vegas). On the one hand, I believe 2010 was a challenging transition year for Kaseya — amid the shift to the Kaseya 2 platform and growing competition from a range of established rivals and industry upstarts. But on the other hand, Blackie says Kaseya remains in growth mode, working more closely with managed services providers (MSPs) and corporate IT departments. Here’s the update.

I concede: I’m a bit late with this blog entry. Blackie and I spoke in mid-February, after MSPmentor had suggesting growing competition between Kaseya and LabTech Software, which is backed by ConnectWise Capital. During our phone conversation, Blackie didn’t dwell on competitors by name but he did say competition drives innovation across the managed services market. In both email and during our phone conversation, Blackie focused on the bigger picture.

Here’s an except on Blackie’s thoughts:

“Honestly, I see the IT Automation market – both Service Provider and Enterprise for that matter, as a huge green space opportunity. This market is largely untapped – there are vast opportunities for growth for nearly everyone. We all know markets where you have to fight for every dollar and percentage of market share, (For example, PC space) however I am here to tell you that this is not that kind of market.

Based on our internal research, Kaseya has a sweet spot in the marketplace with service provider customers of $500K- 5M in revenues and 2 or more employees. Last year we went through a data profiling exercise working with an outside firm, and through this exercise, we verified 37,000 service providers that were already in our CRM system. However, using some common attributes from profiling our customers, the market research firm recommended 44,000 new unique prospective companies using that data. Extrapolating out using this data, we believe the US Service Provider Market to be at least 81,000 unique companies which is in the range of other data we have seen from industry sources showing over 9oK businesses in the US engaged in IT where at least half their revenue comes from IT services. Include the rest of the world and the numbers become almost too big to contemplate. With the field that green — there’s room for everyone.

While other companies have struggled in the past years of a difficult economy, Kaseya grew.  And we are growing, in both revenue and customers. While I won’t share financials with you, I can absolutely tell you that we had similar growth to what can be found in comparable public software companies in our size range. One item I can share with you that is exciting — we doubled our customer base last year. This is testament to the effectiveness of our multi-tenant Cloud platform with the various products hosted on it. We now have products to suit all types of customers needing to provide IT services, whether outside or inside.”

Competitive Landscape

I realize a lengthy list of RMM software companies compete in the managed services market. But my early February blog entry specifically focused on the Kaseya-LabTech competition. The reason: Some members of an influential organization — HTG Peer Groups — appeared to be making the move from Kaseya to LabTech.

I asked Blackie whether LabTech was taking market share from Kaseya. His thoughts:

“One of our goals was to be an industry leader in our space. We think we have accomplished that goal. However, that is not enough and have set our sights on getting to a billion dollars in revenue and we’re going to get there not by worrying about a “fledgling company” as you called it but focus on our execution, delivering value to our customers both in the service provider and the enterprise markets.

Of course…We know that competition is healthy, we love our customers and wish that they would never leave, however we also know that there will always be scrimmages in the streets — it’s just business.”

Reality Check

Some readers were upset with MSPmentor in early February for suggesting there’s a “war” between LabTech and Kaseya. Plus, other readers have called on me to make sure we offer equal time to all of the RMM providers. And still others asked us to give more credit to the LabTech management team for recent success.

We’ll explore those coverage angles in the days ahead but I do stand by our original report: LabTech, backed by ConnectWise Capital dollars, is very aggressively targeting the Kaseya installed base and winning some noteworthy converts. And when key industry sources tell us there’s a war on, we believe them.

That said, MSPmentor does need to keep the bigger picture in mind. My best estimate: Kaseya generates $100 million or more in annual revenues. The company’s MSP installed base continues to grow. And yes, there are plenty of growing rivals in the market. I suspect we’ll receive plenty of updates during a range of upcoming MSP-centric events — including the Kaseya Connect User Conference (May 1-3, Las Vegas) and Autotask Community Live (May 22-24, Miami, Fla.).

Sign up for MSPmentor’s Weekly Enewsletter, Webcasts and Resource Center. Follow us via RSS, Facebook, Identi.ca and Twitter. Check out more MSP voices at www.MSPtweet.com. Read our editorial disclosure here.

Tags: Cloud Service Providers Digital Service Providers MSPs VARs/SIs Cloud RMM/PSA

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