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Kaseya boss looks back on his time at the helm
As he moves into a vice-chairman position, the boss at the managed service provider tools specialist reviews the progress made under his leadership
It has been a few weeks since the announcement was made that Kaseya’s CEO was moving upstairs into a fresh role.
That change means Fred Voccola not only remains with the business, but gets the opportunity to help develop strategy and identify long-term opportunities for the firm and its managed service provider (MSP) community.
For him, the move is just the next chapter in a story that started 11 years ago, and has seen him guide the firm through to a position where it has developed a platform approach, acquired rivals and more expertise, as well as provided an opportunity to get a wide perspective on the state of the MSP market.
“When you look at this, almost 11 years ago … one of the trends that we saw that was just so obvious, where small to medium-sized businesses [SMBs] were becoming more and more important for the global economy,” he said.
“The trend was in the beginning stages. You saw SMB making up a larger portion of GDP employment.”
Voccola said the other trend the firm spotted at the start of his tenure was an explosion in productivity, starting in the enterprise and moving down into SMBs, driven and supported by technology.
“All the technologies that were only the domain of the enterprise started coming downstream, becoming more consumable, so small to mid-sized businesses could use them,” he said.
Solving problems
Having established the trends were supporting MSP growth, Voccola and his team then looked more closely at the channel, and set out to solve the problems it perceived were holding back so many partners.
“The average managed service provider, providing IT and security services for small to mid-sized businesses around the world has a 10% profit average,” he said.
“That means some are as high as 20 or 30%. Very many are in the single digits. There are a lot that don’t make money. And we said, ‘Wow, what a problem to solve’. Because not only is this industry going to continue to become gigantic, because small to mid-sized businesses are making up a larger and larger portion of the economy, they’re dependent on technology, which means they’re dependent on MSPs to do it.”
Aiming to solve that problem has been the driving force behind the evolution of the Kaseya 365 platform, and an approach that drives down costs and liberates time for MSPs to increase their profitability.
“We look at it and say, if our society, the UK, Ireland, North America, Australia, New Zealand, Central Europe, Southern Europe, everyone who’s dependent upon small to mid-sized businesses for their economic stability, [its] MSPs that are the vehicle that’s allowing it,” said Voccola. “They’re like Atlas, holding up the economy. And if Atlas, in aggregate, is running a 10% profit margin, that’s a lot of risk because they can’t make investments, they can’t invest in the business, they can’t invest in their own capabilities to make sure they keep the economy going. And we said, ‘That’s a problem we want to solve’.”
In the past 18 months, he has become more vocal about the inequalities in the economy that place MSPs providing critical services under such unfair margin pressure, and Kaseya, under his leadership, has followed a strategy of aiming to remedy the situation.
“We said we are going to build a platform, one screen, one platform, that contains everything an MSP needs to deliver all the services they have to deliver to run their business,” he said. “To make sure that … most of the manual tasks are automated, so we can make engineers more efficient. We believe we can change the fundamental economics of this industry, and we believe we can drive the average profit margin up 20 to 25% so the average MSP will be doing 30 to 35% profit.”
Annual recurring revenue
As Voccola looks to move into a fresh position as vice-chairman, the Kaseya 365 platform is used by more than 8,000 MSPs with around $200m annual recurring revenue delivered in the past eight months.
“What we have successfully done is launched a platform that will forever change this industry,” he added.
Voccola will help shape strategy and be part of the search for his replacement as CEO.
Even as he moves aside from running the business day-to-day, his determination to change the economics of the MSP market are embedded in the firm’s outlook.
“If MSPs don’t do their job, SMBs can’t compete and exist,” he added. “Most MSPs that I know are overworked and underpaid relative to the value they provide.”
More is to come, and Voccola is expecting announcements at an event in May to add even more depth to its strategy to improve the economics of the MSP market, with increased automation helping them use their resources more effectively.
“My job is to help make sure that we get this company to $10bn by the end of the decade, and make ‘Powered by Kaseya’ something that every single small to mid-sized business demands their IT and security service provider delivers,” he said.
