Episode 32: Bigger Than Kaseya 365
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Episode 32: Bigger Than Kaseya 365
Erick and Rich discuss Pax8’s budding IT management stack and how MSPs can keep pace with evolving customer expectations. Then they’re joined by Kaseya CEO Fred Voccola for a wide-ranging conversation about trends in security and AI, the initial market reception to the Kaseya 365 solution introduced earlier this year, and the “monster, monster, monster” announcement Kaseya will make in October. And finally, one last thing: why Erick and Rich may be accessories to a copyright infringement crime.
Discussed in this episode:
Pax8’s first IT management stack
Follow-up post on Pax8’s IT management stack
What’s Bigger Than Kaseya 365?
AI’s Most Ambitious Music Generators Accused of ‘Massive’ Infringement In New Lawsuit
Episode 20: Cracking the Code on MSP Relationships (the part about Suno begins around the 1:02:50 mark)
Transcript:
Rich: my name is Rich Freeman. I am the chief content officer and channel analyst at Channel Master, the organization responsible for this podcast. I am joined as I am every week by our chief strategist our fearless leader, my friend of many years.
Erick Simpson, Erick, how you doing?
Erick: I’m doing great, Rich. And just excited to, as we record this, we’re just a couple of days away from Independence Day here in the United States. That’s always one of my favorite holidays. We typically get together with family and friends and do a cookout and things like that.
I just love that. And I’m glad that we’re able to squeeze in this episode before we get to take that day off. How about you? I’m
Rich: right there with you. I went fourth of July is one of my favorite holidays of the year. And as long time listeners know, I’m in Seattle. Weather doesn’t always cooperate on the fourth forecast looks excellent.
So yeah looking forward to it. I will tell you what else I’m looking forward to. We have a very special interview guest on this episode of the show, Fred Voccola , the CEO of Kaseya. We’re going to get into a number of different things with them. So stick around for that, but to kick things off, let’s get into our story of the week.
And Erick, I’m trying to hitting the rewind button here a little bit because some weeks back you and I were both at the PAX 8 Beyond conference. The big news from PAX 8 coming out of that show was the official launch of this next generation marketplace that they’ve been working on for a long time.
And we spoke about that earlier on the podcast. But there was something else really interesting from Pax8 that happened in, at that show. I wrote about it on my blog, Channelholic, but we didn’t really get a chance to talk about it. And so I wanted to bring it up here while we have that opportunity.
The big news is the launch of the Marketplace, but there were three other announcements from Pax8 at that show, each of which involved an alliance agreement with a a new vendor who they added to the Pax8 catalog. And there was a company called Calibrate, a company called MSPbox that a lot of folks in the audience might know SuperOps, which we’ve had on the show here multiple times in the past another familiar name to folks here.
What we and then I should say all those announcement came during the beyond show just a few days after Pax 8 announced a similar Alliance agreement with Aavik and what’s interesting about these four New alliance partners for Pax 8 is each of them Is in the I. T. Management space and Pax 8 for, they’ve got all sorts of different solutions in their catalog.
They have never actually sold tools that M. S. P. S. Use themselves to run the business. Everything has been stuff that M. S. P. S. Can’t offer to their clients. So now there are. Four tools in the catalog that you as an MSP can potentially use yourself. And let’s look a little more closely, Erick at the specific four companies that they named because one of them off it does network management.
Super ops does RMM and PSA calibrate does SAS management. And MSP bots does RPA by golly, Erick, that is a complete stack of tools that an MSP needs to run the business. And it gets me to thinking, is there more to this story coming down the road right now, you can get any of those products from Pax8, there’s no particular integration.
Among those products or nothing really special about the integration between those products and the Pax8 marketplace. But were that to change, Erick, what was Pax8 to work with these companies to integrate those systems more closely, integrate them with the marketplace. It would be a pretty interesting and compelling value proposition for MSPs.
And in particular to newcomers to manage services, maybe solution providers, VARs, Who are either not doing managed services yet, or, making less than 20, 25 percent of their revenue is MRR. You not only get this next generation Pax8 marketplace that is completely stacked with everything that you need to offer your customers.
You also get this pre integrated tool set. That is also integrated with that marketplace. It’s a whole sort of MSP in a box kit. Now I asked, I probed at the conferences this we’re headed and I did not get detailed specific answers or even confirmation that directionally that’s where they’re going.
I was told the closest thing I got to an answer was and this is a pretty close paraphrase. There will be more integration. Don’t know what that means exactly, but there is [00:05:00] some more integration to come. So curious what you’re thinking about this development, Erick.
Erick: Rich, are you foreshadowing another, almost, a cloaked tectonic shift?
Are you foreshadowing perhaps, PAX 8’s recognition as moving into what we Are generally seeing from both ConnectWise is and the Kaseya’s in the industry where there’s a lot of this integration going on, attracting partners to, go all in with one specific vendor.
Is that what I’m hearing you forecast here, Rich? Is that what you’re thinking? It’s first
Rich: of all, I can say when we’re talking about forecasts, I want to, I’m going to double underscore. It’s not like I know something the rest of the world doesn’t. But I and I think, and it’s interesting to contrast where PaxA could go with like a ConnectWise or a Kaseya, I think about this in relation to their primary competitors, Ingram Micro, TD Cinex D& H and so on. Ingram Micro some years back bought a PSA vendor, Harmony Business Systems, so that they could build that functionality. Into their cloud offering and cloud is pretty much what Pax8 does exclusively.
From a competitive standpoint, if you’re Pax8, what they are potentially building here would go above and beyond anything that their primary distribution competitors are offering right now. But it is, there is some truth to what you’re talking about there, Erick, which is if a newcomer to managed services decides I’m going to use this Pax8 tool set, because I also get The marketplace and the the marketplace vendors and all that kind of good stuff.
There is an implication about not being a ConnectWise partner or an enabled partner, et cetera.
Erick: Yeah. And from where I’m sitting, Rich, I’m also, like you are watching ConnectWise and Kaseya and. And seeing them moving into a more competitive positioning against kind of the Ingram and TDCN is kind of distributor model.
I’m not saying they’re going head to head, but I’m saying, you’re getting everything you need from this one source. It’s interesting watching these, these moves. In the channel as it’s almost like this, these mega vendors and mega distributors there’s a little bit of overlap, but there’s also distinction and I think the distinction and the value proposition is where the most nimble and, very strategic reading the tea leaves type of.
Of leadership road mapping is going to win out.
Rich: So if we’re transitioning into your tip of the week, Erick, if PAX 8 does in fact integrate all these tools and create this integrated tool set for MSPs, that could potentially change the expectations that MSPs have with respect to their distributor.
And that’s my segue into your tip of the week, which has to do with adjusting to evolving customer expectations.
Erick: Yeah, good one, Rich. Nice segue. And we’ve talked a little bit about this on the podcast before it’s, MSPs needing to shift towards addressing the needs of the post pandemic buyers, right?
The ideal customer profile. That MSPs had five years ago is probably different than what their ideal customer profile is today for many reasons. Rich, right? Buyers are buying different things. They’re, their challenges are different as a result of the pandemic and cyber threats are on the rise.
SaaS applications and platforms are, growing in numbers being used inside of organizations. The need for, increased, if not notably increased support for remote workplace management and things like that. Just more prescriptive kind of a tip of the week this week about how we can meet the needs of these evolving client expectations.
We know that, we’re shifting in a different direction. We’re moving more toward the cloud. We’re moving more toward applications and things like that. And this is where business is going. How do we not only meet. Those client expectations of where we are now, but how do we continue to lead them forward and be that true value added business partner, I was going to say trusted advisor rich, but it’s, sometimes I think that’s a little bit getting tired.
It’s more of a strategic business advisor, strategic business partner. One, Jay McBain, shared with us on the podcast, how there’s kind of seven strategic relationships that every business owner wants to have. And, MSP fills one of [00:10:00] those. So how do we meet those expectations?
Number one. So one of three, many tips within the tip, educating clients about the value and benefits of moving in a particular direction. So focusing our conversations around business outcomes business growth expectations, and rather than. The technology behind stuff, like not how we make the lasagna, how delicious the lasagna is, and how it makes you feel after you had lasagna.
I pick lasagna, Rich, because it is my favorite food. If I were stuck on a desert island, and I only had one thing that I could eat, For the rest of my life, lasagna is at the top of my list. Just quick, Rich, what’s yours?
Rich: You know what pops right into my head is if I stuck on the desert Island and I got all the pizza I want, I’m probably a happy
Erick: guy.
All right. So we are both Garfield is what you’re saying in another, life, okay, so educating them on what the outcome is what the benefits are and then You know letting them know that we are the watcher on the wall. We are going to continue to explore And recommend services and solutions to help clients get there, right whether it’s Delivering technology whether it’s managing vendors right under client, vendor management Whether it’s just being there to help them get more out of the technology they’ve already invested in, right?
Leading them through the perils of, cybersecurity landscape, AI, and how best to use it and whatnot to do that kind of stuff. Number two, delivering more personalized services. Rich, we, we, we have all bought in at a certain point as MSPs, me as a recovering MSPs and in the IT, in the enterprise.
Of the importance of standardization and how it increases efficiency and it, lowers costs and things like that. But when everybody is standardizing, then you get a lot of the same. So how do we tailor our services in a more personal way to meet the client’s needs? Some of us will do that by creating a very vertical or niche market focus and then communicating in a more direct and personal manner with clients.
I, we touched a little bit on a recent tip of the week around that client communication and it was all about retention and client satisfaction, right? The same thing works for us when we are trying to meet our client’s expectations, lead them through change can be difficult and sometimes clients.
need to build another layer of trust and confidence in us in order to say yes to things that we want them and advise them to do. The best way to do that is to deliver that in a more personal manner. Are we doing a QBRs or strategic meetings with clients? Are we reaching out and touching them more often and doing more of an account management or a client success?
Manager type of an approach to managing that relationship, making them feel like they are the only VIP client that we have. Number three, Rich, implementing a system to get regular feedback from our clients and not simply the, expecting the little, frowny or smiley face, rate the last ticket that we closed for you feedback I’m talking about is constructing very specific and unique.
Three or four question surveys that we send out to to the users and maybe in the business owner themselves that are talking about their work and their challenges and their workflow. Sometimes we are so concerned, Rich, with delivering service and managing the infrastructure and the platforms and the, you know, SaaS applications and the risk.
That we miss out on that human feedback because it’s not only building a relationship with a business decision maker, it’s also building a relationship and a connection with the users that we’re serving. And sometimes Rich I’ve had this experience with partners that I work with where, one of the users or a handful of users has been so dissatisfied with an MSP’s service desk or performance or something.
Where the business owner really didn’t feel the same way, but ended up eliminating that relationship with the MSP because they’re influencers and they’re vocal about it. So how do we stay on the right side of the clients of the users? How do we. Ask for their feedback and deliver value beyond closing tickets, right?
And maintaining business continuity with those [00:15:00] users. Asking more specific questions to them, maybe even having a little focus group, little virtual meeting with the users and asking more specific questions, maybe by business unit. So you can ask very specific questions from, a financial unit or an HR unit.
Or a sales unit to determine, what challenges are they having? We are doing everything on Excel spreadsheets, for instance. We could use a CRM or for, financial folks that are like cutting invoices and taking 14 mouse clicks or more. If you’re an MSP wink, wink how can we help maybe recommend an upgrade to their platform or bring in some options, to make their jobs easier. So it’s all about. Understanding where our clients are rich, delivering more value from our relationship than just the day to day, closing tickets and that kind of thing. And then meeting their expectations by connecting with them much more closely, asking the right questions about where they’re going with their business, and then educating on how we can help them achieve those business outcomes rather than just being You know an outsourced I.
T. Department,
Rich: What’s interesting about all three pieces of advice. They’re interesting and maybe challenging for some of the folks in the audience here is not. None of it has really anything to do with technology. Listening to the client being mindful about feedback and user satisfaction.
I’m delivering a more personalized experience, having an outcome based conversation. With the client about new technologies and the business value of embracing those, all those are about how you interact with the client and how you focus your time when you’re interacting with them, which I think is really important advice.
And I also think, for a lot of folks in the MSP world that’s maybe not where instinct leads them naturally.
Erick: Yeah, it’s a good point, Rich. And, I’m sure some of our listeners are thinking, are you kidding me, Erick? I’m juggling 85 fireballs, right now, how am I going to find the time to do this with my clients?
And I would say look at your, look at who you’re serving and look at the clients that you want to make sure that you keep and can build deeper and wider relationships, increasing lifetime client value. And then look at the, let’s call them the C customers. That are probably, you’re less ideal customers and ask yourself a hard question.
Would I be more profitable and able to scale more broadly if I released this particular customer back to industry, because we’re also dealing with, the the the challenge of hiring, technical staff and things like that. And the cost of that today, rich, I look at it from, The perspective of if we’re serving our clients in this more personalized VIP fashion, they will pay for a better experience.
We can increase our rates and the next clients that we’ve been on, that we bring on can fit that ideal client profile that we now present to them, position and sell our services in a very uniquely different manner. To attract the folks that want to drive the luxurious, the most luxurious car of the luxury car class at the dealership and not, the base model.
Rich: It,
It pays to pay attention to customer expectations and precisely the ways Erick recommends folks. Thank you for that, Erick. With that folks, we are going to take a quick break. When we come back, we will be joined by the CEO of Caseya, Fred Voccola . We’re going to talk with him about the results of Caseya’s 2024.
benchmark report, which says some interesting things about the industry. We’ll just get his take on the state of play for MSPs in general right now. And maybe even. Talk just a little bit about the big news from Kaseya earlier this year, Kaseya365 So stick around we are going to be right back
All right Welcome back to part two of this episode of the msp chat podcast our spotlight interview segment where we are very pleased to be joined This week by our special guest CEO of Kaseya, Fred Voccola . Fred, welcome to MSP chat. Yeah. Richard, Erick, thanks for having me. Good to see you guys again.
I always love talking with you. Thanks for having me. Appreciate it. I’m not going to be so foolish as to think there might be somebody in our audience that hasn’t heard about Kaseya and isn’t familiar with Kaseya, but for folks who don’t know very much about you, perhaps Tell them a little bit about yourself.
Fred: Yeah. So I’m CEO of Kaseya obviously. And for the, hopefully not a lot, but those who don’t know, we’re a provider.
We provide a platform for MSPs to deliver all of their managed services and run their business in one place. It’s called IT complete 5, 000 people around the world, headquartered in Miami. I’m the CEO, lucky enough to lead the company for the last 10 years. It’s been a [00:20:00] great ride. Aye.
Dude, every day Rich, you and I have talked about this, God, man, it’s been like seven, eight years since we’ve actually probably nine years when we first met, I think it was in, in San Diego at the only Connect, Kaseya Connect Conference that was not in Las Vegas. And it’s been an absolute pleasure and honor to be in this community, in this industry.
It’s awesome. And to see it evolve and change over the last decade. It’s been great.
So many people’s lives are impacted in a positive way and see what’s coming for the next decade in the industry. And not just to say, but the industry overall, it’s super exciting. So it’s, I’m just really glad to be here in the community and talking to you folks on the MSP chat.
Rich: One of the I, Completely agree that this community, this channel has evolved hugely in the last nine years. We’re going to get into a little bit of that as it’s reflected in Kaseya’s 2024 MSP Benchmark Survey where you collected a bunch of data for MSPs out there. One of the things that I would say has changed in over that nine year span is security has gone from something that most MSPs think about And take care of for their clients to the focus of entire practices, entire businesses.
This is reflected in some of the data in the benchmark survey. A very large and increased percentage of MSPs rated security. Their top challenge security revenue is up year over year. Talk a little bit about the role that security plays for your most successful partners right now. How are the partners who are growing fastest incorporating security into their business these days?
Fred: It’s a great observation. And I think you hit the nail on the head. And security is. It’s a large catchphrase, right? Cause there’s a lot of things that go into it, but it’s everywhere. So what we find, so maybe before we talk about what the partners are doing, it’s important to understand what’s happening.
The, I think it’s safe to say the MSPs who are not successful are not thinking security first, or they’re not, they haven’t weaved security into the fabric. Of their offering. Here’s what I mean by that. I don’t think I. T. and security are separate anymore. I don’t think M. S. P. S. And we don’t see M. S. P. S.
that are successful that bifurcate those two areas. We believe it’s very difficult for an M. S. P. To be successful in 2024 and it will be very difficult to be successful in 25 26 27 28 etcetera. If security is And the business and the technology of security aren’t intertwined into the fabric of how they deliver managed services, how they sell managed services, how they promote them, talk about them, and think about them.
And here’s some interesting, here’s an interesting perspective or some interesting visibility. One of the cool things About Kaseya is we are, we’re the largest, one of the largest providers of cybersecurity for small to mid sized businesses in the world. We’re the largest MSP facing software company, a dedicated software company.
Obviously Microsoft is bigger and Oracle is bigger for the few that use Oracle. But so we have a very unique set of data and a very unique set of perspectives and experiences that allow us just tremendous visibility to the threat landscape. And the threat landscape is a very horrifying reality in 2024.
The bad actors, the cyber gangs, the commercially incented cyber criminals are targeting SMBs, period. In the news, we’ll hear about the big high profile breaches, Caesars had one and MGM had one and, Colonial Pipeline, things like that. Those are what make the newspapers, but over 99 percent of all cyber attacks and successful cyber attacks happen to companies of under 250 people.
The ransom sizes are, Ransoms that are affordable, it’s unlike anything that the world has ever seen because the intent of the people who are taking the ransom. Is really not to do harm, meaning they’re not politically motivated. They’re not personally motivated. They are purely commercially motivated.
So because they’re commercially motivated, they have an incentive to live up to their commitment to release systems and to not release data when ransoms are paid. They’re trying to incent people to pay a ransom. So the ransoms are quote unquote reasonable in nature. You’re not asking a 1 [00:25:00] million company to pay 100 million ransom, things like that.
It’s things that are painful, but reasonable. The actor, the bad actors are also looking at cyber insurance policies and more often than not. They’re asking for what the face of the policy is very similar to what a trial lawyer might do. If they’re suing a, a drunk driving accident or automobile crash.
How much insurance do they have? Let’s sue for the amount, the insurance company will pay for it because the insurance company likely settle and it’s easy. That’s, it’s becoming a transactional experience and because it’s becoming transactional, it’s drawing a lot of people. To the dark side of the force, right to that.
It’s drawing a lot of very smart, very capable people into this commercially driven cybercrime. It’s like nothing we’ve ever seen. And the other part that makes it another fact to other factors that build into it. One is. Richard and Ericka, we’ve seen over the last nine years or 10 years has been the channel small to midsize businesses are so much more dependent on their technology and their applications, whether it’s an application in the office, an industrial system that runs their factory floor or runs their milling or whatever it may be.
So these applications, the availability of them, yes, the data that they produce in the house, but the availability of the application is what allows that business to function. And that is, that’s the core definition of mission criticality. So combine that with the reality in the ground, that law enforcement.
As wonderful as they are. And the FBI is awesome. We have firsthand experience. They are awesome. Interpol is great. Like all these organizations are great. There’s just not enough of them relative to the number of small businesses that could potentially be attacked. The numbers just don’t add up. So it’s a perfect storm for cyber actors to come in and really hammer.
Small to mid sized businesses. So if that’s the reality, and if you are an MSP, and you are delivering the system experience of always available, which means it has to be always secure, to an architect, to a law firm, to a manufacturing company, to a construction company, whatever it may be, dental office, if you’re delivering that service, It has to be thinking security first.
It has to because if you’re not, what you’re doing is if you’re answering a help desk call in 20 minutes instead of two minutes, or if your ticket resolute, if your first call resolution is 85 percent opposed to 97 percent that doesn’t make a bit of difference. If your client is down for six days. It just doesn’t matter.
The game’s changed. And I think that’s a harsh reality. And MSPs have to understand it. And then they also have to understand how to sell it. What we find is a lot of MSPs I speak about this quite often. And Rich, I know you and I’ve had this conversation a couple of times. I equate, I can speak firsthand what it’s like to have been like been hit by a cyber criminal event.
We had our security incident a couple of years ago. It sucked. It was horrifying. You feel like, especially us, because we’re a software company. I feel like we let everybody down. It was, you just feel scared and I don’t care how much you prepare for it. I don’t care how tough you think you are, how smart your people are.
It’s a scary, bad experience, and we are in the cyber security business, so it’s not like we didn’t, I personally didn’t understand it, but I equate it to experiencing personal loss. Intellectually, people understand it, but until it happens to you, you just don’t get it. Like it just You just don’t get that awful feeling of loss until it happens to you.
And it’s a shitty part of being human, but it is what it is. It’s a parallel with a cyber event, unless you’ve experienced it. You just don’t fully believe and understand why would they come after me? Why does it happen? Et cetera. So MSPs have to, they have a tough job. They have the toughest job in the world.
They, what are the toughest jobs in the world? They have to tell, and they have to convince, educate, almost scare. Small to midsize businesses about just how much of a threat they’re facing and how much money they have to spend to protect that threat. So what I think about, or when we as Kaseya think about what do, what does this mean for MSPs?
It has to be in every fabric of their business, their positioning, how they sell, how good they are at, how they articulate it, how they deliver it. They have to always be thinking about security in the fabric of what they do. That’s where we see the most successful MSPs are able to [00:30:00] take advantage of this global pandemic of cybercrime that we’re seeing.
And the ones who can build it into their fabric are doing incredibly well.
Erick: Fred I couldn’t agree with you more. I liken what the opportunity to address this threat. And I think back on, when we didn’t know what managed services was. And we were putting it together, figuring it out, and then trying to, help the community and teach others and how to do it.
There was a lot of education that had to be done that there was a mind shift. In the msp community that are in the it community wasn’t msps yet to get them to realize that this is the path forward This is how you add value to your client relationships not A profit when they’re in the most pain but profit by keeping them out of trouble, right?
So today I see this Almost the same thing has to happen. I think i’m Chiming in on where you’re going with this is we have to educate You And influence and convince not only SMB and customers, but the MSPs themselves to adopt this security first kind of position. And for the last two and a half years, I’ve been coaching and consulting MSPs on just that.
It’s okay, pricing, positioning, bundling, packaging, having the security conversation first, how to have that conversation with your prospects and clients. But now we’ve got something else that’s come on the scene to make it even worse a like how can it get worse? We don’t have the staff.
We don’t have the resources to fend off now It’s become this, commercial transactional thing where oh my goodness, it’s just my insurance policy will cover it let’s keep trucking. So people are being desensitized to It sounds like from what i’m taking from what you’re saying in the in your survey You also polled MSPs about their thoughts on using AI and their concerns.
So now we know that these cyber terrorists are becoming much more mature. They’re being much more strategic. And now we’ve got AI on the scene that in and of itself, there’s risk inherent in that, in how you incorporate it into a business, right? These terrorists are using AI as well. So there’s a lot of layers to that conversation, but I just want to focus on what you sense from the response from MSPs regarding AI and what they’re concerned about with it today and how that needs to evolve potentially.
Yeah. So
Fred: AI is a fun topic because. The three of us were, we’re lucky that we’re, I’ll say technology forward thinking, we’re in the technology industry. So technology concepts are not challenging for us. We understand them right away. We get people who are not in technology when they hear AI, they think about Terminator, they think about the, Skynet taking over the world and, oh my God, what’s going to happen.
It’s difficult to conceptualize it. And the good part about us being in the MSP space. Is that the M. S. P. S. They’re the technology literate people, right? So that you don’t have to worry about the hogwash. I think A. I. And I can also talk about we’re doing with a. I. Is an interesting reality, and it has the potential to do more for M.
S. P. S. Than many things that we’ve seen in the past. So let me tell you what I mean by that. So like at Kaseya, for example, internally at our business operations, we use Gen AI for tons of stuff. It’s a great tool. You’re creating marketing content. Gen AI gets 70 percent of it built. You can produce four times as much content.
You want a logo, Gen AI gets you 80 percent of the way a lot faster. There’s, and every MSP can do that. Just like any business can any business can leverage it for all sorts of basic tasks and finance, accounting, processing, all that stuff. That’s great. But what AI can also do for an MSP is if you think about what an MSP is doing, oh, conceptually, a lot of it, not all of it, but a lot of it are repetitive manual tasks.
And that, that simplifies things because what MSPs do is really freaking hard. So I don’t mean that to simplify, but it’s how many password resets do you do a day? How many, there’s so many basic things that may be done. Network scans, security scans, et cetera. And when human beings are doing two things happen.
One, it takes, it’s a math equation. How many manual tasks can a human being do? What is the cost of a human being? Or where does it go? Second thing is if one out of a hundred tasks has an error, [00:35:00] there’s an error multiplier that says for every error, it takes a number a thousand times. The amount of time, effort, and cost to repair the error, right?
That’s manual for Andrew Deming, one on one manual processing. So AI has the potential to provide huge amounts of automation for the MSP space for MSPs we’re doing with Kaseya right now and why it’s so open or why it’s why it’s such a, like a fertile environment. for automation via AI is because there’s so much data available.
So I’ll tell you, I’ll give you an example. At Kaseya, we have a platform, it’s called ITComplete. So we believe we have a platform that has functionality for every type of managed service that an MSP does. As well as the functionality to manage the M-S-P-P-S-A, IT documentation, et cetera, et cetera. We have about a million MSP technicians and users using our platform every day.
So we have, millions of big numbers. We have tremendous amounts of data. In addition, we have all of the the metadata, if you will, or all the telemetry from the product. Itself that’s being used. So we have 40 or 50 million end points that we’re managing. How many million sets of documentation and compliance scans and security scans.
We have a huge whop of data and we put that into our model. And that model allows us to understand the mix of behaviors of the human beings, as well as how the technology metadata or telemetry is acting. So we can build bots. We build proactive bots are called Cooper bots after my dog, but they’re called bots and they’re automating processes for MSPs.
Now, I’d love to think we’re the only people smart enough to do this. I’m sure lots of other people are as well, but what these bots do is if they can make an MSP technician or engineer, let’s just be very conservative and say 30 percent of what they do is now fully automated. That changes the unit economics of the MSP in a monster way.
Monster way. It also eliminates errors, which is probably even more important because human errors cause the bad incidents that lead to churn for MSPs. So if we’ve been able to do that just in three short years at the beginning of this AI curve, imagine what the next three years with Kaseya or others.
Of course, I think we’re the best. I always say that. But so it’s interesting and it’s required and needed because Erick, as you pointed out, the bad actors, they’re smart, they’re financially motivated and they have, they’re licking their chops and getting their hands on this new productive set of technology called AI to make their efforts better and more efficient.
At exploiting uneducated customers, network weaknesses, MSP errors, they’re going after all of the missed items so that the war, if you will continue. And the most productivity and the most efficiency will win. And I think that MSPs I have a lot to look forward to. And again, the forward thinking security first MSPs that are thinking about resource optimization and automation have a monster in it.
Rich: I’m curious, Fred, all of the companies I write about in, what I’ll broadly call the IT management category where you guys play, everybody obviously is introducing AI functionality to their platforming, their portfolio. There’s a whole. spectrum in terms of how rapidly and aggressively they’re doing that.
And there are some companies that are, right on the verge. If they haven’t already gotten to the point of letting the tool see a ticket, diagnose it resolve it record the results of that process and the PSA and a technician is never consulted. And then, it gets more and more conservative from there.
I guess this is a two part question. I do want to confirm that I’m correct as I’ve written in the past that you folks are a little bit more on the cautious side. You want to make sure anything you put out there is effective and safe and secure. And then I’m curious if your speed, your aggressiveness in this area, how that compares to what you’re hearing from the MSPs, are you encouraging them to adopt AI faster, or are they pressuring you, we need, we want more AI faster?
Fred: Interesting question multi faceted question. I’ll try to attack it in a couple of fronts. I wouldn’t classify our approach as conservative or aggressive, and I think I’ve used the words conservative publicly before. And what I mean by that is. We are all about making our MSPs better.
I’ll talk about that in a minute. Making MSPs the most [00:40:00] profitable business service providers in the SMB space, because right now they’re not. And a big part of that is getting the engineers or the technicians of the MSPs to be able to do without working more hours. And like to be able to do more automation is the best way of doing that.
AI is the best way of providing automation. very much. Now, automation, here’s where I think we talk about conservative versus aggressive or, it’s what’s autonomous and what’s not. And our approach on that is we aren’t mandating autonomy. If you want to take one of our Cooper bots and you want it to autonomously take action.
Not just automate, but start to finish, kick off the action, start to finish. We, when I say permit, we prov we’re relevant, like we’ll provide the capability of doing that. Our position and recommendation is once automation happens, it’s gone forever. So being able to have measurement points. In some cases is responsible not because we’re worried about AI thinking on its own and going and, shutting off oxygen to the world and ending the human race.
I don’t mean stupid stuff like that. There could be errors that are being automated. If the automation wasn’t built properly, there could be an error embedded in the automation. If the data sample, in the example you gave, get a ticket, automatically resolve the ticket, move forward. If there’s an error in the data set, if the data set that the model’s using to analyze the ticket, If the historical information is bad, then the model is just going to do what the data tells it to do.
If the data is not great, you’re going to get a bad result that’s autonomously kicked off. So now you have 200 bad results until you catch it. There’s a balance there. It’s not Kaseya’s place. To dictate to our partners how they use our platform. That’s the most arrogant thing in the world. We’re, I would, I hope that we’re not doing that , I don’t think that we do.
So we give the ability, if you wanna autonomously automate, or if you wanna, human kickoff, automate, for lack of a better term. So that, that’s what I mean by concern. That’s our recommendation to people is be very careful about total autonomy because the pain of an error. For an MSP is massive.
And I’m not even talking about a security configuration error that might open up a vulnerability. That’s obviously a given. That’s a horrible thing. The commercial model of an MSP. We all know this. It’s not easy for MSPs to get new customers. It’s not. It’s not like a software company where we’re lucky enough for Kaseya.
We get hundreds of thousands of inbound leads. Most MSPs, it’s a different type of customer acquisition process.
It’s
Fred: business services. It’s different. And the ability to make sure that the customer feels special for an MSP, meaning that the MSPs customer feels special. A lot of that’s predicated on trust.
And a lot of that trust is predicated on not messing up. So automation is a great way of preventing errors, giving total autonomy. Is risky. And it’s not that it shouldn’t be done. It just needs to be thought through. That’s probably our position on it, Rich. How do we stand versus others in terms of our AI investment and where we’re at?
We have 206, over 260 Cooper bots today. No one in this industry has anything close to that. And the reason that we can do that is not only because we have a ton of data, we have Cooper, right? The great model and all that kind of stuff. I look down because Cooper’s sitting underneath my chair as we’re sitting maybe I’ll pull him.
He’s not sleeping. I’ll pull him up for a quick, for sure. Definitely will. He’s not going to I do that, but I’ll do it. I’ll give him a treat later. He just heard me say the word treat. So that was tail plugging. Chris, you’re as well. The fact that we own all of the kit allows us to build integrations inside of our products that are very meaningful and deep.
So we’re able to do cross product automations. And that’s when you think about most of what an MSP does, most of the business processes that they want to automate. Go across more than just one tool or technology. And because our platforms one, we can extend that business process automation all the way through multiple products.
And have the handshake at every element of the process. So I’m pretty confident that we’re not only are we further [00:45:00] ahead. I don’t know if we started before or after everyone or put more or less money in. I think we put more money in. I think we started earlier, but that’s not the point. The point is because we own it all, it’s almost impossible for people that have one or two or three products to compete with that because they might try to do an API based integration.
With three or four other software companies is only so deep you can go. And with us, it’s all one. So we’re very similar to Oh, three 65 or M three Microsoft office, where it goes really deep in the products exist as one.
Erick: Fred you’ve taken a very considered approach in how to implement AI and how it fuels, I think use the term, AI fuels or empowers automation.
For our listeners that are still new to what’s going on regarding, business process automation, robotic process automation and ai. Can you unpack that in terms that applies to how you I, how you’re using this? Get into what the role of the ai is in terms of automating this to deliver these benefits for the MSPs.
Yeah. One ,
Fred: A lot of ways of thinking about it. So one way would be, as I mentioned earlier, we got, now we have a lot of MSPs using our platform, so we see what our, so we have data. We
have
Fred: quote unquote, dumb data about every action that an MSP does. And that’s getting correlated or condensed combined or whatever terminology you want to use with the technical infrastructure, security and metadata.
That their interactions are causing, creating, and leveraging. We can take that to say, what are the most common business processes that an MSP does? What are they doing? And, how are they doing it? How many clicks are they doing? What, where are they moving through? How long does it take? How often are there failures?
How often do they have to restart, redo it? Then you have, I’m right, 45, 000 MSPs. These 5, 000 MSPs did it better than these 35, 000. So when is it working? When is it not? And we take that information goes into the model and it comes back and says, here’s the process that needs to be automated.
And here’s how it gets done and here’s how to build it. And then we say, okay, here’s how to build it. Now our engineering team knows what to go after half of it’s already built. And then we can make those processes actually function. Inside of the products that they exist, and then you get an automation as a result.
Simple example, one of the names of one is called drop a fish cheesy name. We name every one of these business process automations because by naming it, you give it an identity. It makes it easier for people to understand. So think about the process. One of the things that our model told us was if you are an MSP and you want to do a phishing simulation.
You want to test that phishing simulation. It’s a pain in the butt to do it because you have to tell the email, the anti phishing component of the email security module that the phishing email you’re about to send is a simulation. Pretty simple. You don’t want to, you don’t want the email security product to say, Hey, user, this is a bad thing.
It defeats the purpose. You’re trying to teach people in security awareness training, right? So you run your awareness training. Then you want to simulate what they just learned at some point in the next several days. So you run the simulation, you look at the results and you then see did the security of the training work, did it not work, what has to happen, et cetera.
Very common. It takes hours upon hours. To configure that situation, not because remember you’re doing the training first and you’re simulating what you did in the training, a derivative of it, and then you’re scoring it. Then you go back and you look at the people email addresses, if you will, who failed, who did the bad action.
And then you also look at why they did the bad action and the IP doing this tons and tons of time. So the first piece of automation, which is, it’s going to sound basic in our platform. All of that gets configured in about 30 seconds because the email, the anti phishing technology and the security awareness training technology have the same configuration setting component.
So you press up and you’re done. That piece of automation automatically happens and it goes back and it looks and it learns and it says, okay, these are the training modules are the most successful, the least successful, these training modules need to be adjusted, how it [00:50:00] functions. So people were much more productive.
So we’re creating better products. And the users of those products, instead of having a one and a half hour configuration that fails 20 percent of the time, they have a two minute configuration that doesn’t fail. MSP does that 400 times a year. That’s a very like tangible example of it. And there’s 260 of things like that.
There’s. So
Rich: Fred the last time we spoke was during the Kaseya Connect event a little over two months ago the bombshell news coming out of that show is the launch of Kaseya 365. I can tell you that the the article I wrote about that product when you launch it is one of the Highest traffic posts I’ve ever put on Channel Holic.
A lot of curiosity out there at launch about that product. It’s been a little over two months. What kind of adoption have you seen? What kind of feedback have you gotten? What kind of pushback maybe have you gotten? Yeah.
Fred: Kaseya 365 is the first step of a four step journey that we’re doing at Kaseya.
First, why did we do Kaseya 365? And I’m talking about the results of it and everything else. I get asked a lot. One of the questions I get, Rich, is, so why do this? What is the strategy of it? Why are we doing this? And a lot of people think about it. I made a couple of statements where I said, I think that Kaseya 365 will be more impactful, a bigger piece of news than when we acquired data, which was a very large thing.
And I mentioned that because. Acquiring Datto was an inwardly facing big event. If you’re a Kaseya employee or a Kaseya shareholder or Datto employee or Datto shareholder, that’s a, it’s a big deal. It’s a lot of work to go and buy a big company and do stuff. But for the industry, it’s okay, you bought somebody.
I get it. Like it’s big news, but it doesn’t transform the industry. Kaseya 365, we believe does. And like I said, it’s the first of several steps to come. Here’s what we’re trying to solve. The average small to mid sized business customer the customer of an MSP, they have three primary service providers.
They have their legal service provider, their lawyers they have their financial service provider, those are taxes they’re accounting for, and they have their IT and security service provider, MSP. And you can argue a marketing service provider in certain industries. Without a doubt, by far, the most strategic and most mission critical is the MSP.
Hands down 10 years ago, rich. That wasn’t the case. Not always now without a doubt. And the reason for that is because there’s very few businesses now in the world that are not 100 percent reliant on their business systems, their industrial systems or manufacturing systems, whatever it is. If you’re talking to a construction company or if you’re talking to an architecture firm, if their lawyer goes on, doesn’t show up for a week, business continues.
If the MSP goes away for a week, business doesn’t continue. And what the MSP does is really hard. It’s. I think MSPs most underappreciated, most critical aspects of our economy. There are the dif MSPs are the protection against the largest organized crime, most impactful organized crime syndicate, or grouping of bad actors that has ever impacted the global, modern global economy.
This cyber terrorism stuff has taken like a four to five percent hit out of the global economy. It’s huge. It’s huge. Just think about how much money organizations pay for it. The tax is just huge. And here’s the sad part. Here’s a stat. The average law firm has about a 35 percent profit margin. The average accounting firm, about the same, around 35%.
Average MSP, average profit margin is around 10%. That’s 10%. That’s wrong. That’s not cool. MSPs are doing much more valuable stuff. That’s much harder to do, and their profit margins are less than a third of what lawyers and accountants are. I’m not saying lawyers and accountants are bad, although most people might have an issue with lawyers.
Lawyers and accountants aren’t necessarily bad. They do good work. They work hard. But what we do in this, what MSPs do in this industry is a lot better. So our goal as a company, we think that we have The right playbook, the right technology, the right platform, where we can get the entire industry to have profit margins into 30 to 35 percent range.
That’s what our mission is to do. And [00:55:00] Kaseya365 is the first step in that direction. Kaseya365 is a single, as you guys know, but a single subscription that everything to manage, secure, and back up your client’s environment. Kaseya365. com it’s the functionality of RMM the functionality of patch management EDR, MDR, managed sock, antivirus, ransomware, rollback, endpoint backup, all of that for 3 and 99 cents per endpoint.
That is, that’s normally 15, 12, endpoint for that. Normally the average MSP is running 10 percent margin, 10 percent profit margin. And let’s say for make the math easy. They are charging 100 per month per endpoint. That means they’re making about 10 a month per endpoint. We’ve just saved them another 10 a month per endpoint.
So K365 immediately has doubled the profit margin of that MSP. That’s phase one of what Kaseya is doing. We’ll talk about that in a minute, but that alone, it’s not just the cost of it. Kaseya 365 now, even more than when we launched it, Rich, We have about 45 automations built into that platform. 45 cooper bots come with it.
So not only is it a fraction of the cost, it’s a better piece of kit because it all works together and the automations are there. So it’s, That’s the first step on our mission to change the unit economics of this industry. So MSPs get what they should be getting in terms of profitability for the value and the hard work that they do and the complexity of it.
So the results have been a lot better than what I expected. Rich, it’s funny. I was telling this to my management team today, we went over the results of the quarter. We just closed our, our Q2. And the results were just phenomenal. And I was asked how, how, Fred, you’ve been doing it, this has been your, this has been our vision for 10 years.
This is like the big coming out of the first phase of that vision. Did you had to have known it was going to work. And of course, supremely confident it was going to work until two hours before we announced it. Then I thought it was going to fail. No one was going to like it. It was going to suck.
We’re gonna throw eggs at me and my reputation will be ruined. And I just. I’d go home and hang out with Cooper and go away. Mike Tyson said it right. He knows he’s going to win every fight till an hour before, then he cries because he thinks he’s going to lose. Then he goes and he fights it, same.
And so after, after we came off the stage at connect and we announced it, Kathy Wagner was our chief strategy officer. She texted me like 45 minutes after we announced it. And I was getting ready to go to a bunch of partner meetings. And she said, can basically. She asked me for something because the line was around outside of the building for people to sign up for Kaseya 365 and the fire marshal wanted to shut down the vendor hall at connect.
And Rich, you were there, you saw it, right? So the results have been great. We have over 4, 000 partners on Kaseya 365 in eight weeks. There’s about, there’s over 4 million end points. Being managed by K3, Kaseya365 right now, so that’s well beyond I think what, I’d love to sit here and say, Oh yeah, that’s what we expected.
I’d be totally full of malarkey. Trying not to curse Richard, totally full of malarkey. This isn’t a print interview, so you can’t just edit it out. But it’s been great. The feedback from the partners has been great. Positive feedback. There’s things that we could do better.
A lot of things that we could do better. And we will, we need to make sure that we’re getting better at onboarding. A lot of these people are, they’re going on the platform. And now they’re, they have a whole bunch of new things. They have to learn how to use huge volumes for us.
We have to make sure that we’re dotting our I’s. We’re crossing our T’s. The documentation’s perfect. And. We’ve made a hundred adjustments based on this volume in the last two months and we’ll continue to do but the feedback’s been good. It’s actually been wonderful. And another interesting statistic, this is extrapolating a little bit rich and Erick.
So it’s not, I don’t know how to prove, but we think that if you take the math and you say, it says 4 million end points. Let’s say we’re generating $10 a month of additional profit, $10 a month times 4 million endpoints is $40 million a month of additional profit times 12 months is almost $500 million a year of annual run rate profitability that we have enabled [01:00:00] our community to recapture that is, that’s, maybe know it’s that’s fake math, right?
Or funny math. I dunno if the numbers. 500 million run rate of 300 million, but it’s huge. And that’s impacting a lot of MSPs for the better. It’s not only allowing them to put more profits, if you will, in their pocket. But in the very beginning of this session, this meeting, we were talking about cybersecurity and what makes an MSP good and how they can embed cybersecurity into their essence, into their fabric.
One of the most common challenges that we hear MSPs say that Kaseya 365 is alleviated for them. They have a customer, an architecture firm, and they have, the architecture firm is paying 100 a month for their basic IT management service. And they won’t pay the extra 35 a month for the advanced security.
I see a smile on Erick all the time and MSPs, man, I love them. They’re not salespeople, right? They’re engineers. They’re technicians that they’re not salespeople. Just like a dentist. Isn’t a salesperson, an architect’s not a salesperson. They’re there. They’re an architect and it and security person.
They’re an engineer. So if they’re dealing with a stubborn, cheap. 80 person law firm. No one’s going to attack us. We’re a law firm in Fargo, North Dakota. No, nobody in Russia or Ukraine or China or anywhere cares about us. We’re not going to, those cyber gangs aren’t coming after us. That’s exactly who they’re going after.
And the MSP has to sell them and MSPs aren’t great at selling. In this case, lawyers ain’t great at listening, right? So it’s not going to happen. With Kaseya 365, that MSP can put the full security suite onto that customer, even if they don’t pay the extra money because their margins protected. So now the M.
S. P. Doesn’t have to worry about having a naked customer, and that’s a big benefit that we’ve seen as well. So K 3 is going very well. And like I said, it’s the first step. And we think we’ll we think we’ve gotten 10 points Of margin or profitability back. We got 15 more points to go and we have a couple more things.
We think that can help facilitate.
Erick: I’ll tell you what, Fred, after you made that announcement, what I witnessed was able after table during lunch, where your partners were doing the math of how much. Yeah. A three C three 65 was going to save them. And I’m not even exaggerating. I didn’t walk by one table.
In this giant hall during lunch where there weren’t partners figuring out how much more profit they would realize with K three 65.
Fred: Yeah it’s fun. And it’s, when I say it’s fun, work is fun. I we do, we all do. Cause we’d like it. It’s obviously we have to pay the bills, but we like what we do.
It is super badass and cool to sit down with a partner and talk about how we are literally putting capital into their business. They want to, buy their spouse a car if they want to, whatever that person wants to do it. But it changes, it fundamentally changes Their business and they can it’s fun.
It’s actually really fun. It’s hard as hell. It’s been 10 years in the coming, a lot of really good engineering work to be able to get our costs down, but it’s been a lot of fun.
Rich: Fred, the very first little hint I ever got about to say a 365, I got at DattoCon 2023, the very end of the interview, you just said, FYI Rich we’re going to announce the biggest thing in the history of managed services next April.
And then you made me wait until April to find out what it was. Just before we started recording this interview you suggested there might be an potentially an even bigger announcement coming at this year’s, the 2024 data cut. I know you’re not going to tell us what it is. But what can you tell us about that?
Fred: Our, so this is the first time we’ve talked about this in public. Rich and Erick, we have an announcement. That we will be making in the end of October in Miami. It’s actually Miami beach is at the fountain or Fontana blue, or I say fountain blue, but I don’t speak French on time blue or whoever’s a resort down there.
Miami is our hometown. It’s where I live. It’s where companies based and it’s a monster announcement. This announcement will be as big, if not forget big, as impactful, if not more impactful. Then the Kaseya 365 announcement for our partners are, it’s the second step in a four step process that we are doing to where, again, as I said a couple of times, we [01:05:00] believe that we have the playbook and we say this humbly, we don’t say this from a haughty position at all.
We say it very humbly. We think that we have a
playbook.
Fred: That can get this industry’s profitability to be 30 to 35 percent on average. We believe that some be higher, some be lower, just like law firms. Some are higher, some are lower, but the whole industry where it should be. And it’s pretty cool to have the company rally around that.
Because it’s now we have a common enemy, and that enemy is market forces that prevent MSPs from getting their fair share. We want to fix the whole, fix the industry. It’s cool. It’s pretty neat. And this announcement will be, it’ll be as large, it’ll be as impactful, if not more impactful for, look, Kaseya part this one may be an acquisition last
time.
Rich: Yeah. You indicated there might be an acquisition and I got to do it, Fred. Before Kaseya 365 came out, as I’m sure Reddit was just loaded with people speculating. You’d bought connect wise. Have you bought ConnectWise? We’re gonna have a really big
Fred: announcement in December, Rich. And again, I don’t want to say big because big means big doesn’t make it doesn’t mean shit.
The announcement will be impactful in a massively positive way for Kaseya Partners. I, did I answer your question, rich? No I’m being facetious. If we were to buy ConnectWise or someone else, ConnectWise is a great company. Jason runs a great company. Jason’s a great guy. I think they have, they got good stuff there.
If we were to buy them, it would be lucky to buy ’em. If not, they’re a good competitor. We like competing ’em. So that’s the politically correct answer. But the announcement will be, people will not be expecting it and it is, it’ll change the game again. And then we have two more after that.
And it’s, it’s not a mystery. We’re not trying to be evasive. We’re just trying to make it so these things are, can be consumed. The announcements can be done. This is all the last 10 years. We’ve invested like 12 billion in this thing. Literally 12 billion dollars a lot of freak. I don’t care who you are.
There’s a lot of money It’s a lot of money. It’s a lot of money are we put 12 billion dollars into our community? The MSP community and that 12 billion is there so that we can take that profit margin from 10 35%. We think we’ve got the cheat code for that. The first part of the cheat code was Kaseya 365.
The next part will be announced in In in Miami at DattoCon. This one I’m not ruling out. Last time I said definitively it wasn’t an acquisition because I didn’t think it was cool to companies that, oh, say he’s going to buy you. That sucks for them, if something like that. The noise is just distracting.
I’ve been on the other side of it before my career. It sucks. This one, no they’re, we’re very active and very acquisitive as a company. But it’ll be great for partners. And, I encourage people to, to tune in, to show up. It’ll be a lot of fun. And it’s just like you said, Erick, watching, in Vegas, watching MSP, sit there and say, forget about how, like the things that they’re doing, they’re all sitting there saying my business can be how much better, right?
It’s not, Oh, this neat, new, cool product or this neat, cool feature, or how cool is that? Or it’s hold on. How much is my business being made better? That’s. That’s really unique. And that’s, we’ll have that same, we will have a greater impact in December, in I’m sorry, in October than we had in April.
Rich: So the last time you hinted at something huge, I had to wait about six or seven months.
This time it’s only about three. I guess that’ll make it a little bit easier. Fred, we’ve held you longer than we we you offered to let us hold you before. So I thank you for that. But quickly, before you go, let’s upset Cooper.
Erick: Yes, we must see Cooper, please. If he’s available, sign us out with you and Cooper in the frame.
True buddy.
Fred: I know. All right. Can you see him a little closer? Hi Coops. That’s awesome. This is modern AI right here. And a comfort
Erick: friend as well. All right.
Fred: Guys, thank you so much, man. This is awesome. Rich Erick. It’s always awesome. You guys do a bang up job. It’s we’re lucky to have you in the industry.
Super, super cool. And I really appreciate it.
Rich: Thanks, Fred. And thank you very much again for joining us on the show here, folks. Erick and I are gonna take a break right now. We’re gonna be right back very shortly to chew over some of what we’ve discussed here with Fred Voccola , CEO of Kaseya. Have a little fun, wrap up the show.
Stick around. We’ll be right back.[01:10:00]
All right. Welcome back to part three of this episode of the MSP chat podcasErick ric, we just made some news or broke some news right there. Welcome to my world, the world of journalism. We got something out of that interview with Fred Voccola . We did not anticipate going in there was no discussion prior to that, that they might announce something they haven’t said anywhere else, but we got a few very interesting facts and previews, let’s say, out of that.
And I’ll start with the it’s a very interesting thing, maybe not the most important or relevant. We are approximately, as we’re recording this, we’re approximately 10 weeks into the Kaseya 365 era. And they’ve got 4, 000 partners using it, and those 4, 000 partners are managing 4 million endpoints.
With it, which is actually pretty decent momentum, I would say for 10 weeks. As you heard Fred say the Kaseya’s estimate is that MSPs are saving 10 for each one of those endpoints that they have on on Kaseya 365. So you do the math on, just today, where they’re at today 4 million endpoints, times 10, times 12 months, you’re looking at half a billion dollars.
Of money that they’re putting into the MSP channel, not their own pocket. This is a profit that that MSPs are making. So it looks like encouraging early results from K K365 for Kaseya. I’m sure we will hear and learn more about that. The bigger thing obviously, Erick is that Fred told us that at that DattoCon coming up in a few months, they’ve got an announcement coming even bigger than the Kaseya 365 reveal just ten weeks ago, and needless to say, we don’t know what that is, but it sure sounds like there’s an acquisition involved.
I came flat out and asked him did you guys buy KinectWise because I know I’m gonna get asked that by I did before the Kaseya365 announcement and he didn’t say yes. He didn’t say no. It is a possibility. I would say that the key thing that I zeroed in on is when he was talking to, and this is before we got into, we’re announcing something big, even bigger, at DattoCon.
He was talking about the importance of the Kaseya 365 launch from his perspective. And he said it was much bigger. Then the Datto acquisition in his mind, because it impacts the MSP. The Datto acquisition impacted Kaseya and was great news for Kaseya, but it doesn’t make an MSP more profitable necessarily.
And so he was much, much more excited about the industry impact that Kaseya 365 could have. And he likened whatever it is they’re announcing at DattoCon to that. Which doesn’t sound to me like, if data’s, impactful for us, but not the channel buying connect wise feels like the same thing.
So I don’t think they bought connect wise. They it sure sounds like they bought somebody. And he was setting us up for the fact that this might, who we bought, what they do might surprise people. So we’re going to have to wait a few months to find out what it is, but it’s going to be big,
Erick: whatever it is.
You heard it here first. Absolutely. Rich here on the MSP chat podcast. And I. Yeah, I’m with you. I don’t believe that it is related to connect wise. It does sound like it, hint, it may be an acquisition. And now rich, I’m like you, I’m like scratching my head, something that has as much or more impact to MSPs.
And that is a movement that I can get behind being a recovering MSP or it’s it’s a vision that Fred shared with us during the interview that says, Hey, this is, the K three 65 was one, four steps that we were taking, or four phases in this master plan to increase the profitability of MSPs to targeting between 30 and 35%, that is huge.
I think effort and. So far they’ve executed phase one, phase two is coming. So beyond that, what can possibly be phases three and four to get MSPs to be more profitable MSP to say, yeah, MSP partners. Let me be clear. Yeah. As stay up partners to be 30 to 35 percent more profitable. Boy from just what he shared and the data and the statistics, Phase one seems to be going as planned.
Rich: Yeah, you’re,
Erick: you’re right.
Rich: It’s important to flag, as he did, this is going to make Kaseya MSPs much, much more successful. So whatever it is they’re announcing which I think involves the announcement itself might not be an acquisition, but it [01:15:00] certainly sounds like it involves an acquisition and whatever it is, when you bundle that in with.
Everything that Kaseya is doing now, particularly Kaseya 365, it’s going to enable MSPs to sell more or keep more of what they sell. Let the speculation begin. You’re exactly right, Erick. We’re going to spend weeks now just trying to theorize. What could it be? What kind of, I don’t know.
I don’t know, but it’ll be interesting to find out. And like I said, I don’t have to wait quite as long this time to see what it is.
Erick: I look forward to having further debates about this for the next 10 weeks on the MSP chat podcast until we are both present at DattoCon and hear it for ourselves and report back to our listeners.
Rich: All right. Folks that leaves us with time for just one last thing. And Erick, I, we might be an accessory to a crime. Our new story that regular listeners might recall that we had a little fun on the podcast, some episodes back with a an AI platform called Suno which allows you to just prompt a song, the kind of song you would written for you.
And in a matter of seconds, Suno will spit out a really. Pretty good song. That fits what it was you asked it for and we created a couple of different theme songs for the podcast here. Guess what this week? The Recording Industry Association of America sued Suno and another company that does a similar thing called Udio or Udio.
I don’t know how you pronounce it. Exactly and the idea basically is you know that these companies are hoovering up An entire recording industry’s worth of music and training on it and then using it to spit out New songs and not they haven’t licensed any of that. They’re not cutting the artists or the labels in on any of that, it’s going to be a very interesting we I will be really interested to see how the courts parse out what is or is not copyright infringement in this kind of case but for right now, at least there is an allegation, Erick, that we, we did something elicit, we stole intellectual property from the artists whose music inspired our theme songs.
Erick: It’s very interesting, Rich, because, we know that these, LLMs, these AIs are going out there and grabbing, data that they can have, that they have access to, which, can be a risk, it can infringe on IP. So it’ll be interesting to see what happens here, because on the one hand, Is it infringing on IP, or on the other hand is, getting sued by the music industry because your AI was too good at making hit songs, like getting fined for being too good at karaoke?
Who knows?
Rich: Yeah. No, that’s an interesting point. Maybe the RIAA is. Is doing Suno’s marketing for it here, whether that’s our intention or not, but yeah, something to keep an eye on and just something to keep in mind if you’re having fun with Suno. You may or may not be stealing intellectual property. Folks that is all the time we’ve got for you this week on the MSP chat podcast. We thank you so much for joining us. We’re going to be back in a week with another episode. Until then, I will just remind you that this podcast goes out in both video and audio format. So if you are listening to the audio version of the podcast, but you’d like to check us out on YouTube, you’re going to find us there.
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We appreciate It’s going to help other folks just like you find and enjoy the program this program is produced by the great russ johns who is part of the team with us here at channel mastered he would be delighted to produce a podcast for you, too. There’s a lot more that we can do for our partners at channel mastered if you want to learn more about any of that You Go to www dot channel mastered.
com channel mastered has a sister business called MSP mastered in which Erick works directly with MSPs to help grow and improve their business. You can learn about that organization at www dot mSP mastered.com. So once again, folks, we thank you very much for joining us. We’re gonna be back again in a week with another episode for you.
Until then, please let me just remind you that you can’t spell channel without MSP