There should be a virtuous circle that sees small to medium-sized enterprises (SMEs) continuing to become a more important part of the economy, small firms continuing to work with an absence of in-house IT specialists, and managed service providers (MSPs) being used as their trusted advisors.
For those like Kaseya, which depend on the success of the managed services market, the prospects for 2020 and beyond are looking positive because the macro trends are working in favour of the channel.
Kaseya CEO Fred Voccola said the tech landscape was changing, with the approach taken by SMEs – to have a few people or MSPs covering a wide range of tasks – becoming more prevalent.
“What is fundamentally changing tech is that the IT people [in SMEs] are multifunctional IT people. Compare that with the enterprise, where technology grew up, and 95% of the $3tn that has been invested in software since 1992 until today, in the form of private equity, venture as well as retained earnings, has been spent on enterprise-centric technologies. Those are purpose-built for single-function technologists,” he said.
“Look at the SME technologists, whether they are an MSP or the two IT people that support a 200-person company, they are doing everything – backup, compliance and service desk. So their workflow is not one thing, their workflow is the combination of about 15 things, and what they struggle with more than anything is the ‘space between’ because nothing has been purpose-built for their workflow,” he said.
Voccola said it had moved to solve those problems with its IT Complete platform, providing MSPs with a suite of tools they could take out to customers.
Growth plans
In the past few years, the firm has invested both organically, at a rate of $100m a year in research and development, building integrated software products, as well as making acquisitions.
“When you see us making acquisitions, we are buying things to make sure the platform is complete,” he said, adding that its most recent move was to add compliance support, which has become a major challenge the customers base is dealing with.
He added that the firm intended to make a couple of additional purchases in the security area this year: “I think you will see us making a couple of security acquisitions over the next 12 months, and we will be announcing one or two acquisitions this year.”
There are also plans to invest more in the European operations, with this year seeing a significant increase in the number of staff working in the London office and the headquarters in Ireland.
Meeting SME needs
As well as working on IT Complete, there is a feeling at Kaseya that the wind is behind it and the SME market is looking to the managed services model because it is the best way of meeting their needs, and at the ‘S’ end of the SME market the reliance on managed service support was the only real answer.
“Small business is defined as a company that has zero IT professionals, and they receive by definition their technology from an MSP. They have to, because if they don’t, they don’t do anything, in which case they are out of business,” said Voccola.
Touching on Brexit, he shared the view that it could be beneficial for the customer base that MSPs sell into.
“If you are an MSP, and you are running your business in an average way, you’re growing 10-15% a year. Show me [another] industry where an average player is growing 10-15% a year”
Fred Voccola, Kaseya
Voccola is looking ahead, and is keen to be in the driving seat when the business breaks through the $1bn revenue barrier in the next few years.
“This is the best business-to-business market to be in for now and the next 15 years. I can’t think of a better thing than providing MSPs with a platform to help them deliver all technology solutions to all small and medium-sized businesses around the world, and there’s not a bigger market,” he said.
The move by the channel to embrace the MSP model has been a continuing theme over the past couple of years, and Voccola said that although there had been lots of consolidation, the net new number of partners continued to rise.
“If you get into the MSP market now, you could have a 20- to 30-year career. The MSL market is good for one reason: the macro trend to small and mid-sized businesses embracing technology and making up a larger and larger part of the global economy. You have to get technology through an MSP,” he said.
“MSPs should continue to focus on efficient service delivery and they need to continue to offer emerging solutions to their customers – security, backup and disaster recovery, compliance, IoT [internet of things] and network management. If you are an MSP, and you are running your business in an average way, you’re growing 10-15% a year. Show me an industry on planet Earth where an average player is growing 10-15% a year,” he concluded.
