​Kaseya doesn’t believe that managed service providers should waste their investable dollars on professional services automation (PSA). So why did the company just acquire a PSA vendor? 

“It’s real simple: we think customers are getting ripped off. Pure and simple. There’s no reason why a company that does $5 million in revenue should be paying a PSA vendor $125,000 a year,” Kaseya CEO Fred Voccola tells Talkin’ Cloud in an interview. “It doesn’t add nearly the value for that company.”

On Tuesday, Kaseya announced its acquisition of Vorex, a PSA and project management software provider based in Dallas, TX. The company has been working with Vorex for a couple of years to jointly build and develop a PSA technology that forms the basis of Kaseya’s new business management solution (BMS), which Voccola said will cost MSPs around one-third of what they are paying for PSA solutions now.

According to Voccola, the Vorex team is fully integrated and intact, reporting to Kaseya CTO Dana Epp. 

Meeting the Needs of “2nd Generation” MSPs

The way Kaseya sees it, there are two different types of MSPs.

Voccola explains: “What we’ve seen in the last several years is the industry has entered into its second phase. The first phase of the MSP market was pretty much managed service providers evangelising to customers as to why they should have managed services as opposed to just break-fix and things like that.”

“Now with a lot of technical changes – cloud offerings are everywhere, Office 365 has taken over the world, if you will – managed service providers are really evolving, and they have to evolve in order to remain competitive,” he said. 

MSPs spent “a lot of money on first-gen PSA products,” Voccola said, but those products, released 5-8 years ago, were “built for specific usage” and haven’t adapted to their changing needs.

“We have over 5,000 managed service providers, and the majority don’t like their PSA products,” he said. “They don’t like them – not because they’re bad products – but because the products haven’t evolved to the needs of the new MSP.”

“They’re very difficult and stiff and inflexible in terms of the ability to add new services,” he said, pointing to cloud management, Office 365, and other cloud services as examples.  

In an interview on Talkin’ Cloud’s sister site, The VAR Guy, Jim Lippie, chief advisor at Clarity Channel Advisors, predicts that the Vorex deal will bring improved functionality to Kaseya, along with more competitive pricing, “prompting the other players to step up as a result.”

How MSPs are Differentiating (Hint: It’s not PSA) 

While Kaseya obviously believes its PSA solution is better than the rest, in part because it is born-in-the-cloud, has an open API, and has what Voccola calls a “sexy” UI, he acknowledges that PSA has become a commodity and isn’t something that MSPs can use to differentiate.

“I spoke with a European customer, maybe 5 months ago, they [had come] from a PSA vendor conference, and were switching PSA vendors,” he said. “They were convinced that this would massively impact their business; they had a goal of growing 20-25 percent. They thought that by switching PSA products they’d be able to do it.”

“I talked to them about a month ago and they’re still in the process of trying to migrate the solutions and the comment from the CEO was this was the biggest mistake we’ve made,” Voccola recalls. 

Miguel Lopez, SVP and GM of MSPs, Kaseya, said that a recent survey the company did on market prices shows that while services like server and remote management are still prevalent, the top MSPs are offering services that are “clearly different” from the MSPs seeing growth below 10 percent year-over-year.

“One of the things we’ve noticed is that there seems to be a levelling off of server management and desktop management – everybody has to do it,” Lopez said. “If you don’t do it, someone else is just going to come in and replace you. But there are other things out there – things like security, cloud and advanced monitoring, are what these other, higher growth MSPs are offering.” 

Giving it Away for Free 

As part of the launch, Kaseya is offering MSPs using other PSA solutions to try Kaseya BMS for free for a year. So how does the company expect to make money, particularly after spending more than $20 million to develop the platform?

“We believe we have a great product. We want to put our money where our mouth is,” Voccola said. 

“Let’s say a company is spending $100K a year on a PSA product, with us they’ll spend $25K. That frees up $75K for them to invest in their business,” he said, pointing MSPs to Kaseya’s “comprehensive platform for service-ready products for MSPs.”

Customer Success Updates

About 7 months ago, Kaseya created a customer success organization, which Voccola said has seen a lot of early success. Most notably, Voccola tells Talkin’ Cloud that it has reduced its average time to respond by 65 percent, improved its NPS score by about 31 percent, and has reduced time to resolve issues by 71 percent. 

“We’ve got a long way to go but we’ve made some definitive progress,” he said, including hiring over 50 people in that group, which is led by Alex Cuevas, Chief Customer Officer, Kaseya.