Kaseya 365 Forces Competitors to Adapt or Suffer

A new report from Canalys says Kaseya 365 subscription bundle isn’t unique but its pricing pressures competitors.

Dave Raffo, MSP News Editor

May 13, 2024

3 Min Read
Kaseya 365 brings more RMM/PSA competition among MSPs

The Kaseya 365 subscription program could change the way MSPs engage with vendors and platforms, and force Kaseya competitors to adapt or face irrelevance, according to Canalys.

Kaseya 365 is an inclusive subscription model launched at last month's Kaseya Connect. It includes remote monitoring and management (RMM), cybersecurity and backup for an introductory price of $3.99 per endpoint, per month.  Kaseya 365 Express costs $1.75 per month per endpoint without managed detection and response (MDR). The introductory prices are tentatively set to run until at least the end of May. The list prices will eventually rise to $5.25 for Kaseya 365 and $2.25 for the Express version.

The Canalys report, "Vendors Must Reckon with the new Economic Narrative looks at how Kaseya 365 could change the economics of the MSP model. Canalys estimates the RMM and professional services automation (PSA) markets where Kaseya plays was worth $1.4 billion in 2023.

Canalys analysts point out Kaseya’s major RMM rivals, ConnectWise and N-able, already offer discounts for MSPs buying multiple products. These programs follow the model that Microsoft used with its Office Suite in the mid-1990s when it bundled productivity products such as Word, Excel and PowerPoint.

According to Canalys, roughly 25% of MSPs struggle with profitability. While this bundled approach can improve profits, “as some MSPs have pointed out, if a partner is relying on this kind of offer to help them with profitability, their business model needs more serious changes," the Canalys report reads.

Still, Canalys says Kaseya competitors have been put on alert by Kaseya’s low prices.

“One can easily see a future in 10 or 20 years where, as long as MSPs and endpoints still exist, Kaseya becomes the Microsoft of small business RMM (if Microsoft has not already done that first), and where its main rivals have been decimated or forced to shift into niche areas.” the report states.

The report claims that Kaseya competitors must switch strategies or spend heavily to compete.

“For competitors like ConnectWise, N-able, NinjaOne, Atera or Syncro, there is a real danger they could become completely irrelevant,” Canalys analysts wrote.

MSPs at Kaseya Connect had a positive reaction to Kaseya 365, which is no surprise as mostly satisfied partners attended the conference.

IT Partners+'s Kevin Damghani

“It’s a unique approach. It’s going to bring our costs of goods down dramatically, especially if you’re a ConnectWise shop. As we add new customers at $4 per month for your core COGS versus what you were paying before, it is a game-changer, said Kevin Damghani, CEO of ITPartners+, which ranked No. 123 on the 2023 Channel Futures MSP 501.

Kaseya 365 Can Dominate SMB Market but Commoditize MDR

“Looking further into the future, it is clear that Kaseya is on a path to dominate the small business managed services market,” Canalys wrote. However, “Kaseya 365 risks commoditizing MDR at a time when the detection and remediation elements need much more investment and education to build customer awareness. There is a fine line between devaluing MDR and making it more available to MSPs in the SMB sector through product bundles. One of the problems is that MDR is not a SKU, but an ongoing relationship between the vendor, their partners and the end customers. MSPs need to be very careful about their responsibilities when it comes to outlining the offerings from vendors.”

Looking ahead, Canalys sees artificial intelligence (AI) for RMM and PSA as a big opportunity for vendors and MSPs.

“The opportunities for AI models in analyzing customer data to build demand profiles and then mapping this existing customer data to new customers are massive,” the report said. “Any vendor that helps its partner ecosystem crack this code will be hugely successful.”

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About the Author(s)

Dave Raffo

MSP News Editor, Channel Futures

Dave Raffo has written about IT for more than two decades, focusing mainly on data storage, data center infrastructure and public cloud. He was a news editor and editorial director at TechTarget’s storage group for 13 years, news editor for storage-centric Byte and Switch, and a research analyst for Evaluator Group. In addition to covering news and writing in-depth features and columns, Dave has moderated panels at tech conferences. While at TechTarget, Raffo Dave won several American Society of Business Publication Editors (ASBPE) awards for writing and editing, including for column writing.

Raffo covers the managed services industry for Channel Futures. His reporting beat includes the MSPs, key vendors and tech suppliers with managed services programs, platform providers, distributors and all key players in this sector of the market. Dave also works closely on the Channel Futures MSP 501 and our live events.

Raffo has also worked for United Press International, EdTech magazine, Windows Magazine and Data Center Intelligence Group (DCIG) in reporting, editing and research analyst roles.

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