Kaseya and the VAR500?

Kaseya and the VAR500?

var500-09-awardsI've been mulling this item in the back of my head for about two weeks, trying to figure out how to write a responsible blog. Let me start with the facts, then dive in with my own thoughts. The facts: Kaseya, the managed services software provider, landed on the latest VAR500 list -- which tracks North America's largest solutions providers. Then Kaseya issued a press release announcing the VAR500 honor. That's when the industry chatter started.

To be sure, the VAR500 (formerly the VARBusiness 500) is a well-read media report. And generally speaking, landing on the annual VAR500 is a distinguishing achievement for many solutions providers, IT consulting firms, VARs and service providers.

But here's the potential problem: Kaseya issue a press release about the VAR500 honor. And over the past two weeks or so, several of Kaseya's own customers have reached out to me -- expressing concern about the Kaseya press release.

All of the sources expressed the same sentiment: Kaseya's listing on the VAR500, they allege, suggests the software company is going direct in some areas and bypassing MSPs in some market segments.

Kaseya's Channel Strategy

In many ways, the Kaseya direct vs. indirect "debate" is old news. Kaseya CEO Gerald Blackie has told me multiple times the following:
  • For businesses with 100 seats or less: That's a pure play for Kaseya's channel partners.
  • For businesses with 100 or more seats, Kaseya does sell direct but partners are free to sell into those markets as well.
When I asked Kaseya about potential channel confusion related to the VAR500 report, Executive VP Jim Alves reinforced Blackie's previous statements:
"Nothing has changed with our strategy. We are absolutely committed to our MSP partners and their goal to sell managed services to the customers under 100 seats.  Typically the customers over 100 seats are not looking for managed services and we do and have always had a direct sales force selling into the enterprise. In any case where an issue arises, it has always been worked cooperatively and to the benefit of all parties."
Some rivals see the market differently. N-able, for instance, has announced pure channel and mid-market strategies that funnel all sales leads out to partners.

If this was a normal day and a normal blog entry, the story would end here: Some Kaseya partners express concern, Kaseya offers response, and I move onto my next blog as readers weigh in on this entry.

The Other Twist

Still, there's a subplot to this story. Specifically, Alves isn't sure how or why Kaseya wound up on the VAR500 list in the first place. Offered Alves:
"The fact we are on the list is a bit of a mystery to us since we are an independent software vendor. We are not sure how we were qualified as a VAR."
With that thought in mind, why did Kaseya issue that press release about the VAR500 honor? Especially when the VAR500 report lists Kaseya's consulting, services and reselling revenue at a lofty $50 million annually.

Where did that number come from?

Kaseya is a privately held, so I can't prove or disprove the $50 million consulting/reselling figure. But let's just say "I doubt it."

The bottom line: Whether you embrace or question Kaseya's channel strategy, Blackie and Alves have a consistent message for MSPS -- 100 seats or less is pure channel; 100 seats or more and Kaseya's direct sales team could be in the running. But I can't figure out why Kaseya put out a VAR500 press release that ultimately triggered direct sales concern among some of the company's channel partners.

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