Kaseya Makes Multi-Million-Dollar Acquisition

Kaseya, which specializes in IT systems management software, has acquired ObjAcct Inc., a developer of XML-based accounting software. The deal, expected to be announced November 4, could arm MSPs and corporate IT managers with an emerging type of financial management software. Here’s the scoop.

Kaseya’s move highlights the managed service market’s continued evolution beyond traditional RMM (remote monitoring and management) and PSA (professional services automation) software.

ObjAcct, Inc. develops an XML-based accounting software suite. The software will allow MSPs and corporate IT managers to track and monetize the costs associated with delivering IT services, according to Kaseya CEO Gerald Blackie, who confirmed the deal.

According to an official Kaseya statement:

IT professionals will now be able to analyze and report combined technical and financial data to assist in the alignment of IT with the overall business goals of the organization…

…Kaseya now has all the ingredients necessary to complete its development of a fully integrated IT systems management solution encompassing money, people and IT assets, providing a genuinely new way to look at IT Systems Management and IT Service Management (ITSM).

Financial terms of the deal have not been disclosed, but word on the street says Kaseya had to make a multi-million-dollar commitment to acquire ObjAcct.

Over the past few years, Blackie has repeatedly mentioned his vision for providing an ERP-like financial platform for corporate IT departments and service providers. Part of that vision involved Kaseya’s 2009 buyout of Datatune, Inc.’s assets. Datatune had developed a Billing for IT Services application — which sounds somewhat similar to PSA (professional services automation) software. Lump the Datatune deal together with this week’s ObjAcct buyout, and Kaseya seems serious about linking financial management to the IT services industry.

Beyond Traditional Managed Services

No doubt, the traditional RMM (remote monitoring and management) and PSA (professional services automation) software markets are moving in multiple directions. Among some of the noteworthy moves so far in 2010…

• During the Kaseya Connect conference in June 2010, Blackie mentioned that Kaseya was marching toward the $100 million annual revenues mark. As part of that effort, Kaseya has diversified beyond traditional on-premise IT management software to introduce a range of SaaS offerings. Kaseya has also been developing Business Center PSA software.
• Autotask has pushed beyond PSA to acquire VARStreet, which helps IT service providers with product sourcing.
• CA Technologies acquired Nimsoft to focus more on cloud computing and mid-market managed services.
• ConnectWise has pushed beyond its PSA roots, using its ConnectWise Capital arm to invest in LabTech Software (RMM) and CharTec (hardware as a service). We’re watching ConnectWise closely this week; more moves could be coming during the ConnectWise IT Nation conference in Orlando, Fla.
• Level Platforms has focused increasingly on cloud monitoring capabilities and relationships with Intel, Hewlett-Packard and Microsoft while also preparing the Managed Workplace 2011 platform.
• ManageEngine has launched a “light” edition of its managed services software, while exploring close synergies with sister company Zoho — which specializes in SaaS.
• N-able has been promoting a freemium software strategy that arms MSPs with endpoint security and data protection options.
• PacketTrap, now owned by Quest Software, has been focusing more and more of its monitoring and management efforts on the network rather than basic endpoint management.
• Tigerpaw Software, which focus on PSA and CRM software, has been help VARs and MSPs to connect the dots between  voice and IP opportunities.
• Zenith Infotech has pushed beyond remote management and BDR (backup/disaster recovery) to introduce hybrid cloud services (called SmartStyle) while sister company Vu TelePresence focuses on next-generation video conferencing.
• Did I miss any moves? It’s been a long day so please don’t flame me. Instead, post a comment or email me (joe [at] NineLivesMediaInc [dot] com) your perspectives.

Back to the Future

In some ways, Kaseya’s strategy reminds me of a former strategy at CA Technologies. Around 2001, CA promoted a solution called i-Can ASP. The effort was designed to help service providers meter and bill for their IT services. The effort ultimately failed because the ASP (application service provider) model imploded, plus CA was suffering from management turmoil.

Now, Kaseya is putting a different spin on financial management tied to IT services. And the effort includes key financial management experts. A prime example: It sounds like Lee Mellinger, president and CEO of ObjAcct, Inc., has joined Kaseya as part of this week’s buyout. Mellinger previously held key roles at eLedger.com, Anteq Software Corp. (acquired by Kaleden Online Ventures in 1999) and Solomon Software, according to Mellinger’s LinkedIn profile.

We’ll be watching to see how Kaseya leverages Mellinger’s talents and the ObjAcct code base.

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