January 24, 2025

Episode 59: End Game of End Games

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Erick and Rich are joined by Kaseya Co-Founder and Vice Chairman Fred Voccola in his first interview since stepping down as CEO to discuss why he’s changed roles and what it means for Kaseya partners. That comes after your hosts talk about recent research suggesting there’s a huge latent co-managed IT opportunity for MSPs in cloud management and three tips for helping customers manage legacy systems. And finally, one last thing: “soup you can suck on.”

 

Discussed in this episode:

Rackspace The 2025 State of Cloud Report

Progresso launches Soup Drops, a hard candy that’s ‘soup you can suck on’

Transcript:

[00:00:00] And three, two, one, blast off, ladies and gentlemen. Welcome to another episode of the MSP chat podcast, your weekly visit with two talking heads, talking with you about the services, strategies, and success tips you need to make it big and manage services. My name is Rich Freeman. I’m chief analyst at Channel Mastered, the organization responsible for the show.

I am joined this week by your other co host as I am every week, our chief strategist at Channel Mastered. Erick Simpson. Erick. How goes it? It goes fantastic. Rich, how are you doing today? I am doing phenomenally well thank you very much. And you know, I just noticed something that this will be more relevant to folks who are watching on YouTube than folks who are listening right now.

But we have a very exciting interview coming up on this episode with Fred Vokola, who until very, very recently was CEO of Kaseya. He is now the Vice Chairman. We recorded that. Just a little bit earlier today. So before we’re recording this part of the show and you were wearing different clothing, you, you have changed into your signature red shirt for the podcast, sir.

Yes. Costume change for the podcast. I came in hot off a webinar. I was conducted for one of our channel mastered clients earlier. So folks that are watching this on our YouTube channel. We’ll note the costume change. So if you haven’t seen our YouTube videos you can check it out yourself. I love the attention to detail and the the diligence, Erick.

Thank you for that. It, it is noticed and appreciate it. Back at you, Rich. So let’s dive into our story of the week. And this kind of, as folks know, and I say this all the time, I’m kind of a stats geek. I love research reports. I love diving into them. Earlier this week, as we record this Rackspace published its 2025 State of Cloud report.

And they know the cloud at Rackspace, giant cloud hosting provider there. Ton of interesting information in that report, but I want to call out a few specific things I noticed that I think are especially relevant for MSPs, even though Rackspace didn’t spin it exactly this way. So. There was a point in the research there where they were they asked the the companies they surveyed for this report, and I should say the vast, vast majority, something like 85 percent north of that, of the companies they surveyed, have over a thousand employees.

So these aren’t really SMBs, this is mid market and enterprise companies that they mostly spoke to. They asked these companies about cloud management tools that they have them use and 48 percent of the companies they surveyed have a cloud management platform. 45 percent have a cloud cost management tool of one kind or another.

42 percent have or are adopting a multi cloud management solution. These are all companies big enough to have IT departments. Approximately half of them over half of them don’t have any kind of cloud management tool in place, which kind of tells you that they’re probably not doing a great job at managing their own cloud environment.

Here’s some more evidence that would suggest the same thing. 4 in 10, 40 percent of the companies Rackspace surveyed said that a lack of skilled personnel is a challenge for them. When managing the cloud environment. So 40 percent of the mid market enterprise businesses out there are struggling to get people on board to help them manage their cloud environment.

They don’t have tools and they don’t have people to run the tools. And one in four, 25 percent of these companies said they’re having to change their cloud strategy based on the fact that. These positions are hard to fill and these people are hard to find. So what does this tell the MSPs in our audience, Erick?

Well, we have spoken quite recently on the show, I believe, about co managed IT. Not a new phenomenon in the managed services world. We, we saw a lot of growth in that area during the pandemic. When a lot of these mid market enterprise businesses needed help from MSPs doing remote management and remote support for employees who are working from home.

Here is another giant opportunity, co managed IT opportunity for MSPs in these statistics right here. Larger businesses are struggling either because they’re short on people, don’t have the right tools or both in cloud management and who knows cloud management better than the average MS, SMB focused MSP right now.

So there is a, a big opportunity, I would argue for anyone who is in co managed IT or thinking about getting into co managed IT. In cloud management for these large businesses. And one last observation here. This is not the opportunity here is not just in cloud management. I think that’s the below hanging fruit, if you will.

But here’s some more. One more [00:05:00] statistic from the Rackspace report. They went out and asked people about the state of their cloud strategy right now. And 33%, one solid third of the companies that they surveyed said that they either have it No cloud strategy or they’re in the process of formulating one, but they certainly haven’t gone about implementing it yet.

So again, a third of larger businesses surveyed by Rackspace need help just getting to a cloud strategy. Then they’re going to need help implementing it. Then they’re going to need help in particular managing it. Wow. Rich, those stats surprise me. You know, it’s, it’s nutty how these organizations.

have such a reliance on these cloud platforms and cloud technologies yet a bunch of them have no plan for it. They’re understaffed and they don’t have platforms to manage them. So yes, it’s a, it’s a call out for MSPs. I was going to try to do a Jerry Seinfeld impression like, where are these MSPs? I mean, where are the MSPs that are not, you know, knocking the doors down.

And offering these services because like you said, Rich, this is right in the MSP’s wheelhouse and holy cow, if this is the first time you’re hearing this as an MSP, I would suggest you explore you know, some marketing to these organizations and see if they could use some help in a co managed IT relationship.

As we’ve talked about on the show several times, Rich. You know, the pandemic allowed the opportunity for MSPs penetrate what was, you know, historically a closed garden of internal I. T. departments and support because they feared MSPs being, you know taking over their jobs and things like that. I think that’s gone away, and I think the mature MSPs that are growing and growing their co managed I.

T. practices. I’ve figured out how to have these conversations to dispel any kind of fear about them being, you know, some sort of you know, a risk to the internal I. T. departments and positioning their services as much either much more strategic, allowing them to, you know, manage the day to day operations or being much more kind of taking care of the noise, allowing the internal I.

T. departments to focus on more strategic activities. So again Opportunity Knox, where are you, MSPs? Totally agreed. Totally agreed. If this is new on your radar, this is something to investigate. If you’re doing co managed IT, but you’re not doing cloud management for those clients, this might be a, a topic to raise.

They, you know these clients might be unaware of how you can assist them in that area. So this is, this is Opportunity. Knocking ladies and gentlemen. Now, one reason a lot of these larger businesses maybe don’t have a cloud strategy and are struggling with the cloud management is they are relying a little bit too much on legacy platforms.

In their case, that would mean on prem platforms doesn’t always mean that for businesses at every scale, but legacy systems have something to do with your tip of the week here. Absolutely rich. And, and it’s all about striking a balance in serving. The end customer and their infrastructure and their users and serving their mission of growth and things like that.

And, you know, as we all know, rich organizations sometimes are slow to adapt and adjust and upgrade legacy hardware move toward strategic solutions and services that MSPs, you know, are, are begging them to move towards. So let’s say you’re an MSP rich. And have a client or two that just has some legacy equipment that, or, or a good reason, let’s say, not because they’re stubborn and don’t want to move off of platforms and things like that, but let’s say there’s a good reason.

That they can’t get off of some sort of a legacy device. And, you know, I remember in my days as an MSP you know, further and further away as, as those days may be now I remember that there were just some applications that would not run on newer hardware and things like that. Or you know, back then, you know, when I had my MSP kind of that, that virtualization was still just kind of new and, and being kind of tested out.

Like that’s how. That’s how far I’m aging myself, Rich, right? So let’s say you’ve got clients that just, you know, for whatever reason, good, bad, right or wrong, you’ve got to support some legacy devices. You don’t like it, but it is what it is. So three quick tips. Conduct regular system assessments. Make sure that you’re doing everything you possibly can to secure those as much as you possibly can.

One. Strategy also, which could be to try to virtualize that device if you can. So it’s running inside of a more secure you know, hypervisor or hyperscaler environment, something like that. Number two, if it [00:10:00] can be upgraded, let’s say we’re doing our technology road mapping with these clients. And now it’s more of a budgeting thing.

Like, yes, we know we need to replace these devices, but we need time. Be that really good BCIO Rich that says, look, we’re going to sit down and we’re going to map out quarter over quarter when we’re going to be replacing these legacy devices, the ones with the most risk, of course, have to be prioritized first, and then give that business owner a plan in a budget to plan for and set aside so that you can incrementally replace these devices over time.

And the third one is. Make sure you’re Johnny on the spot, if you will of providing as much support as possible just to make sure that those legacy devices, because they must be critical to the organization, if they’re still there, right, are operating and you’re maintaining as much uptime and availability as possible that may be challenging just because of what you’re dealing with.

But building that strong strategic relationship with your clients, letting them know that you’re doing everything you can to make sure that things operate with their agreement to replace it at some point in time is the trade off here. And you may even charge more rich, kind of a bonus tip charge more for these legacy devices because they are creating more work for you and creating more oversight, just like I just described, right?

So three or four quick tips to think about this when you’re dealing with Kind of this mixed environment of. Of half, you know current technology and services and maybe some legacy devices in the mix. Yeah, you know, as I, I listen to keep talking about that, it occurs to me that there is both a short term and a long term responsibility to your clients around these legacy systems and a short term and a long term opportunity and the responsibility from a short term perspective, obviously, Is to keep these things operational and secure from a long term perspective, it’s to help the client migrate into something that’s, you know, going to work better for them be more securable et cetera.

And, and that’s, you know, that, that strategic road plan and the conversation with them, how are we going to get you eventually off of these legacy systems? And from an opportunity standpoint, it’s kind of the same thing. I mean, from a short term perspective, like you said, you could charge more for the extra work you’re doing to support these systems now.

And then over time, as there are these projects to migrate and implement and adopt new systems and so on, that’s a revenue for you as well. So yeah, a lot, a lot of things to think about there. In terms of yeah, it’s a more complex topic. I would say these outdated, increasingly outdated systems than just, what do I have to do to get these guys off of this stuff?

Yeah. Yeah. And you know, it’s the one challenge that, that, you know, a lot of MSPs have is that the client will say, yes, yada, yada, you. And then never go ahead and move forward with the, with the migration project. Right. So you’ve got to just be very, very clear about getting that agreement and, and making sure that you hold them accountable as they hold you accountable to servicing this old, you know, equipment.

So that’s, that’ll be the bigger challenge here. You know, having a plan to support it, maintain uptime and secure it as much as you can, maybe virtualize it in some instances if necessary but ultimately you’ve got to have that trust. And an agreement with your client that they will move forward. So that’s why you have to have that roadmap in place.

And you’ve got these milestones and dates that you’re checking in with your client on your regular, you know strategic business reviews or meetings and saying, okay, we’re getting close to the date, right? We’re still good to move forward. Just making sure that you’re doing everything you can to hold them accountable because you know, you don’t want to just.

Continue to have to support this outdated equipment because it is a risk at some point. Okay well folks, without further ado, let’s get to the main attraction for this episode because two weeks ago today as we record this, Fred Vocola of Caseo was the center of a bombshell announcement out of that company that he is no longer the CEO.

He is now the vice chairman. Hasn’t spoken much at all that I’m aware of to the media since then about why the change happened what it means for Caseo and Caseo Partners. You are about to hear him speak about that at length on this show, and we will have that interview for you just a minute after this break during which Erick is gonna change into a sport coat and a white shirt he’s gonna do another costume change, and then we’ll switch back for for part three later on.

Stick around, Erick and I are gonna be right back.

And welcome back to part two of this episode of the MSP chat podcast, our spotlight interview segment, where we are pleased to be joined by a very special interview guest, sort of the the man of the hour, the man of the month here. You probably know him best as the CEO of Kaseya. He’s now the former CEO and current vice [00:15:00] chairman of Kaseya.

And his name is Fred Vokola. He’s back on the show for the second time. Fred, welcome. Thanks, Rich. Thanks, Erick. And, and hopefully this is the second of many, many more but super pumped to be here. A lot of fun last time on the show. So looking forward to it. Well, thank you for coming back. I’m glad we did not scare you away from a repeat appearance.

So Fred, there I was two weeks ago today as we record this, there I was in Southern California on a business trip. I was wrapping up a business lunch with a solution provider down there. Took a glance at my phone just to see what’s new, and by golly, I discovered you have a change of role, a change of position at at Kaseya.

Totally unexpected news for a lot of folks, and so the obvious first question is, why this change, and why now? Yeah, so, it’s I’ll probably go on for a little bit of a soliloquy here, if if that’s okay with your audience, but So I’m skinny, I’m suffering from the winter cold, like I think half of Miami is the, so my Kaseya journey started like over 10 and a half years ago, almost 11 years ago when I started working with insight partners, there’s a partner there called Mike triplet.

And Mike was the one of the founding partners and the partner of Insight. And he’s been my partner throughout the journey of the last you know, 10 plus years at Kaseya. And when we were looking and thinking about Kaseya, the idea of IT Complete and Kaseya, which is now Kaseya 365, you know, we formulated that strategy, developed that strategy with a couple of folks that I, that I brought over when I took over the company a little over 10 years ago.

So we were working on the strategy well before we, you know, we, we officially took over the asset, if you will. And you know, we started the journey and, and, and Rich and Erick, as you know, 10 plus years ago, Kaseya was not in a great place. You know, as, as the phrase that we use the time was Kaseya had lost its way and our job was to bring it back, but our job wasn’t to bring it back to being an RMM company.

Our job was to create Kaseya 365. We believed the thesis for the last 10 years and Rich and Erick, you’ve heard me talk about this for the last 10 years, is to create a platform. Purpose built for MSPs that changes the unit economics of an MSP by bringing all of the functionality, all of the technology kit they have to use.

Bring it together in one place, one interface, one screen, integrating it at a very, very deep level so that it can provide substantial automation for the MSPs and offer that solution at about a third of the price. And we started the journey by calling this vision it complete. And over the last 10 years, we’ve.

God, we’ve spent 12, 14 billion building out it complete organically. We have over, we have several thousand engineers every day that are banging away at it. We’ve made 18 acquisitions, including Datto rapid fire tools and ID agent and graphics and rocket cyber and a number of them. And in 2000 this in 2024, it’s, it’s always weird in January to think about what year you’re in.

Right? So in 2024, The culmination of that monster effort was released on stage at Las Vegas with Kaseya 365. You’re both there. And Kaseya 365 was the reason and the vision that I had when I restarted Kaseya. You know, they now call me the co founder of Kaseya, because we You know, co founded a new company in 2014 when we started this journey.

And at that point, it was a long road. You know, it’s been an 80 hour a week job for 10 plus years. And I mean a legit 80 hours a week. And it’s a lot. So when we released Kaseya 365, it was. Very similar. You never want to say mission accomplished because we have so much more we’re going to do the next five years.

I mean, we have just so much more we’re going to do as a company, which is going to be amazing. I love to talk about that as well. You know, after Las Vegas and after we released, say 365 and after the first day of the show, we had over 300 people. For your partners who had [00:20:00] bought it now we’re well over 7, 000 I think might be over 8, 000 now.

I didn’t check the numbers in the last week You know, we’ve we’ve accomplished it and after the show in Las Vegas And I told you the story, Rich, about being backstage at the show and, you know, not knowing how things were going to go and getting a text from one of my executives saying that the fire marshal saying we have a big problem.

The fire marshal has an issue with with the, you know, the vendor pavilion. I’m like, Oh boy, what’s the issue. There’s too many people in the Kaseya 365 area. We’re having to turn people away. And I was like, Okay. It looks like we, it looks like, you know, it looks like we did something right. And at that point, you know, I shared my financial partners and start thinking about like, I, I don’t know if I want to be the day to day CEO of Kaseya, how much longer I want to do that for.

I didn’t have a timeline. I just knew that there’s a lot of things in life that I wanted to do. And you know, I had some, some personal things. Take place in the October timeframe. And you know, some, some, I lost my father and with my best friend and, and, you know, I think we, you know, I was lucky enough to be there and, you know, spend a lot of time with him on the very, very, you know, end of his life.

And you know, he just, it was time, it was time to say, you know, there’s only so much money you can make in life. Well, no, I guess if you talk to Elon Musk, there’s a lot of money you can make in life, but, you know, Kaseya is. You know, Kaseya is a great asset and a great part of my life. And after we were, Kaseya 365 was the vision and we got there.

So, you know, after Kaseya 365, we started, or I started, I say, we, the board and myself, I’ve been on the board for, you know, since the inception. We started upgrading the executive team’s talent. If you notice we have a new COO, not new anymore. Ryan Corson, it’s been almost 10 months. Since Ryan’s been here we have an outstanding CRO.

We’ve promoted Mike Sanders, our chief product officer, Ranjan Singh. We brought on a new global head of HR. We brought on a new chief marketing officer. All this has been done over the last 10 months. You know, as we knew we were going to be, you know, making this transition. So it’s not sudden.

Someone’s had in the works for a while. Now we made the decision to announce right the first week of January, right after the new year, that, you know, I’ll be moving full time to, to vice chairman of the board in charge of strategy and you know, and, and platform and making sure the vision continues.

But the day to day operations I’ll be hiring, or we will be hiring, you know you know, or I should say that my fellow board members and I will be hiring my replacement to be CEO. And that process has been underway now and we’re talking to folks and, you know, I get asked this question a lot. It seems sudden.

And there’s a couple of different schools of thought as to how to go about a, like a founder type person, you know, moving out of the day to day and moving into a you know, to a chairman type role. And one of the things that we try to do at Kaseya is try to be transparent with our partners. You know, there’s something super unique about Kaseya.

I love this company like there’s, like it’s my child. And one of the coolest things about it is our partners are They are, they are fully dependent upon us. So when we screw up, it really screws up their business. And then we’ve had a couple of mistakes over the years when we do well, we, it’s exponentially valuable for our partners, businesses, and we’ve had lots and lots of success because say a three 65 for the set for the over 7, 000 partners that are currently active on it, we are generating, or they are generating.

An additional run rate of over 1 billion of incremental profit, 1 billion of incremental profit yearly from the partners using Casaya 365. That’s awesome. And we set out the goal to change the unit economics for MSPs. The average MSP, the non, you know, the average non CASA MSP runs at a profit margin of about 10%.

We, our, our North Star was to build this platform so we can provide the automation, the completeness of a platform, as well as offer at a price point that [00:25:00] changes that unit economic. So from instead of being a 10 percent profit margin industry, the industry should be around 35 to 40%. The value that MSPs provide not just to their customers, but to society overall is among the most important contributions of any industry to our way of life.

Small to mid sized businesses make up over 70 percent of new economic activity. I saw recently almost eight out of 10 net new job creators. Or net new job creations are happening in small to midsize businesses in the Western world. That’s only happening. Because these small to midsize businesses are fully dependent upon the business and industrial systems that manage their businesses and they can’t do it without MSPs.

And if the MSPs that are acting as the enabler for the most important part of the global freaking economy. are running at 10 percent profit margin in aggregate, that’s risky as hell. If you’re a business running at 10 percent profit margin, you can’t make material investments. If you lose one customer, your business runs a solvency risk.

So our vision, the vision going back 10 and a half years that Mike Triplett and myself and Frank Tisolano and Alex Cuevas and a bunch of us thought about was, and Mike Sanders, and how do we fix that problem? And we recognized we fix it by changing the reality that MSPs have to use 15 or 16 enterprise Transcribed products, craft them together, have no automation over pay form and run 10 percent profit.

So when we released Kaseya 365, that was a big, big point in our company. And for me, when I looked at my personal choice you know, as the largest individual shareholder in Kaseya. I said, I don’t know how much longer I’m going to run the day to day operations of this great company. So we started upgrading and changing our executive team.

And then in January, made the announcement. We made the announcement before we’ve hired my successor purposely. So we’re being transparent with the market. You know, like when we had our security incident, we were super transparent, right? Because that’s a big, that’s a, that was a big thing. I mean, that was a, it was a tough time and partners need to know what was happening.

And we shared it during COVID. We had just tremendous amounts of data and we were very transparent with our MSPs about what we see happening and what are the trends and, you know, and, and with our billing issues that we experienced in beginning of 2023. We were transparent about this is what’s happening.

So making a, you know, a founder, CEO change, we wanted to be transparent with the, when I say the market, with our partners. So they knew this is not a knee jerk reaction. This is not, Fred’s not quitting. He’s not just leaving. You know, I’m, I’m hiring my my, my successor. We didn’t believe we had anybody internally that would be the right candidate.

We have amazing talent, but just, you know, we’re 5, 000, we’re over 5, 000 people. There’s not a lot of people that have run a 5, 000 person software company in the world. And we’ve got to be very careful in how we do it. And over the coming months, you know, I’ve been leading the search along with Kevin Thompson, who I brought him, we brought on the board, I think five or six months ago.

Mike Triplett from Insight, Jason Ewell from Insight. Now this is a, this is a very, very careful, well orchestrated process. So we don’t cause friction and we don’t break what’s working. And we figured the best way of doing it was to be overly transparent. You know, I, it’s, that’s funny. We just had our kickoff meeting last week.

And, you know, I gave our keynote at sales kickoff. I ran our, our CEO council, which is now the vice chairman’s council. You know, it’s like the largest 40 MSPs around the world. And we take their advice and, you know, I have probably 25 to 30 speaking engagements over the coming months. And I still do eight customer calls every single month as required.

And we’re just going to make sure that we’re transparent in the process. And that we find the best possible person who can take this just, you know, amazing company that I just, I love this place, man, take this company and take our partners that make the company what it is and, you know, get Kaseya from [00:30:00] 1.

5 billion to 10 billion. I mean, this is a, this is a very unique opportunity. And that’s the process that we’ve, that we’ve gone through. And that’s kind of some of the reasons why I decided I’m, you know, 80 hours a week at Kasaya, 10 years, a long time. And you know, I’m, I’m not going anywhere. You know, I still have all my responsibilities, all my, you know, again, as the largest shareholder and the, and the owner of the strategy and the direction of the business that’s how we’re doing.

Fred, it’s, it’s great to have you on and, and hear how, how thoughtful and methodical your, your approach will be to, to address this change of leadership. And I applaud, you know, the, the desire to become much more strategic in your future for the overall organization. Any kind of leadership change can be.

Disruptive to an organization, right? And it’s great that you’re sharing all of this. How do you get that message out that you’re sharing with us here on the podcast to partners that may be concerned about any kind of a disruption or a slow down and innovation or progress while you’re going through this transition?

Well, hopefully. If I’m not the CEO, things will go better because, you know, maybe I’m, maybe I’m not such a good CEO. Right. Whoever comes next is going to be a hundred times better than me. And I think it’s, you know, without being obtuse, it’s doing things like this. You know, I, we talk to our customers all the time.

We do webinars, you name it, there’s a million communication vehicles that we do to our customer base. And we talk about it. And we’re very open. I mean, it’s, there’s a number of partners who have known this was coming. You know, a lot of the members of the, of our, my CEO council knew it was coming. A lot of them helped us guide what we were doing.

A lot of, a lot of, a lot of our, you know, CEO council member partners participate in interviews of a lot of the executives that we hire. You know, we’re, we’re pretty transparent about it. And I think the, the reality is there’s. No difference from what’s happening at, what is it three, you know, whatever time this is viewing, you know, when we’re recording this particular session to the day before, you know, we’re still looking at all of the daily support tickets, the resolution time, the things don’t change the executives who have been running the business for me are still those executives and I’m still over, you know, overseeing them and we’re still making sure that the organization’s in place.

It’s just, we’re preparing for the next phase, the next leader. So it’s not a, you know, earlier today, I had three partner calls just to give it a, give an idea. Start one of them was two or more escalations on various product requests. And one was someone that wanted to talk just about this. So it’s a great question, Erick.

I think our approach has been one of trying to be as transparent as we can. The alternative approach, which some companies choose to do, and there’s no right or wrong way of doing it, is you wake up tomorrow and there’s a new CEO of the company that is your most strategic partner. It’s like, holy smokes, what just happened?

You know, this, the way we’ve taken this approach is to say, the strategy, the direction, the architect of the strategy, none of that is changing. Kaseya 365, the monster investments we make, the constant innovation, the focus on AI powered automations, integration, you know, the things that we are doing, nothing is changing as trying to alleviate any concern.

You know, we learned this during the security incident that we had. One of the pieces of feedback, and that was a tough time, man. That was, I mean, I’m sure you guys remember, that was like, holy smokes. And one of the things that. You know, our immediate approach is just right away over communicate because, you know, we are, you know, because say a partner spends 7, 8, 10 percent of their revenue with us.

That’s a responsibility we take really seriously. So I think that it really hit the company and myself beyond math, just how strategic and important our relationships are with our partners. It’s just critical. And so that’s really what, you know, drove us to then take the overall approach of over communicating and, you know, to take this approach as well.

So in this new capacity as vice chairman, you’re going to be in, in more of a strategic capacity with the company there’s, you know, you’re not going to be engaged day to day. There’ll be a new CEO who’s. running the company day to day, week to week. Tell us a little bit about what you will be doing a little more specifically about what you’ll be doing strategically as vice chairman and [00:35:00] how sort of engaged with the company on an ongoing week to week, month to month basis.

You’ll be. Yeah. I, I think, you know, my job now is So basically all the strategic stuff I do now will continue, right? Like, you know, like what is the, what is the direction of our products? Where do we take the platform? What markets to enter pricing and all those kinds of, all those kinds of things, acquisitions, M and a, what do we want to add into the platform?

You know, how quickly do you want to build a there’s so many, so many. Interesting strategic things to think about, but the, the day to day management of every department will not be done by me. You know, that will be, that’s what the new CEO will do. And I’ll, I’ll be the CEO’s biggest confident, confidant, biggest cheerleader, biggest consigliere, whoever the phrase is, you know, and, and helping that he or she drive us to the next phase.

But to be clear. You know, we, we have a, we had and have a vision and the vision is not over. Cause say at three 65 is the beginning and the next phase of where we take this business after we get every MSP powered by Kaseya leveraging Kaseya three 65 driving unit economics where their profit margins are 35 to 40 percent where they’re automating.

Literally automating up to half of what they do. There’s so many things that come next. There’s so many things that we can do for MSPs and help MSPs deliver value to their customers. And those are the areas I’ll be working with the CEO and the team on. Like every executive and every owner and every board member at Kaseya, we like to say, we all have our sleeves rolled up every day, all day.

You know, I mean, there’s not a, there’s no such thing as an ivory tower. Cause our culture is a culture of grit. It’s a culture of getting it done. So, you know, as much as I’ll be focused on strategy. If ever, there’s anything that needs to be done, I will be diving into it just like every other board member and every other resource could say has to solve problems.

But in general the day to day, you know, the typical CEO day to day accountability management that will be transitioning to the new CEO. So Fred, it sounds like while you’re transitioning into a much more strategic role here. You’re going to be busier than ever. So let me ask you just kind of a, a different question beyond serving as the vice chairman of Kaseya, like what’s next for you, what’s in store for you beyond that?

Oh, wow. I you know, if I tell you, I got to kill you. I’m joking. You know, I a lot, a lot of things. First is Kaseya, you know, I bleed Kaseya blue. You know, and I, I will forever. So it’s going to, it’s going to, you know, take a little while to find the right CEO and that happens. And, you know, I’ve I’ve spent a lot of time you know, doing a lot of civic work and, you know, there’s some things there I think I can contribute and, and, and focus on.

And you know, that’s, I’m purposely being evasive, Erick, because there’s some, there’s some very specific plans. That will be happening over the next several years. But you know, it’s, it’s first and foremost, it’s Kaseya. And I’m not trying to duck the question. I, I hate when people do that on interviews and it’s such BS when they just give like crap answers.

And, but there’s you know, the next nine to 12 months is, you know, it’s Kaseya. Like, like a lot of Kaseya the three years after that, I’ll be continuing to work with the new CEO. And there’s some, you know, there’s some civic things and some, some other types of things that I’ll, I’ll be starting to invest time in.

One of the things I am most proud of about Kaseya is the fact that the culture we have at Kaseya. Like the Kasaians, they are all about two things or several things. One of them is making the partner successful, like making the partner successful. I tell the story, I tell it with a lot of pride. We had our security incident.

It was scary. And at the time we had about 30 or maybe 35, 000 partners. I can’t remember the exact number, maybe 25, 000 even. And we spoke personally to about 99 percent of them. Within 30 days, like on the phone or on a zoom speaking one on one saying, you know, Mr. And Mrs. MSP, this is what’s happening.

This is what we’re doing. And we were, we were [00:40:00] putting messages out there every day and, you know, and trying to communicate, but we talked to every single one in a meaningful way. Now, that’s not easy to talk to 30, 000 or 20, 000 people and, you know, in 30 days, we had our, our account management team, our cybersecurity team, our managed SOC team, our technical, everybody was in the office until 11 o’clock, Sunday through Sunday, doing everything they could to reassure.

Communicate over address and they didn’t ask for a single damn thing to do that. And that’s, there are a lot of companies that are like that in the world. You know, it’s a very, it’s a very gritty company. It’s a company where the people really, truly care about the partners. And the second thing that we say at Kaseya is we’re about changing lives.

You know, and we have, we’re headquartered in Miami. We got a whole bunch of first generation AmErickans. We’ve had liquidity events over time. One of the things that you’ll hear, you know, if you, I spent a lot of time in the Valley and, and you know, Boston and other, other places where there’s great technology companies and, you know, when technology companies do well, people have financial gains.

And you’ll, you know, you’ll pull into the parking lot and you’ll see like a Ferrari or a Porsche or some fancy car and at Kaseya, and this is, this is like really heartwarming. It’s so cool when, you know, when we’ve had, when we have been lucky enough to have, you know, financial opportunities for people and, and different kinds of events.

The most common thing that you’ll hear a case is people saying, what are you gonna do with the bonus or what are you gonna do with the, you know, with the equity or whatever I’m going to buy my parents their first house, you know, and it’s, it’s, it’s a different kind of place. It’s a, it’s a wonderful company.

We have our flaws, like everyone else, a wonderful place. And that idea of changing people’s lives is one of the things we have to say. And when I think about. You know, when I, what I want to be doing cause say it was a commercial. It’s an amazing company. We create tons of value, changed thousands of Kaseyans lives.

Hopefully we have changed permanently the unit economics of the entire MSP industry. So three person MSPs don’t worry about going out of business if they lose one customer. We give them the rewards they deserve, the recognition they deserve you know, and the respect that they deserve. And for me, I want to continue to make people’s lives better in various capacities.

Best way I can answer that Erick. I appreciate that, Fred. Thank you. So you, you folks, you and the rest of the board, you’re in the process of recruiting, hiring a new CEO. I can, I can kind of guess the answer to this question based on some of what you’ve said about the division of labor going forward.

But I mean, give us, paint us a, a, a sketch of the kind of person you’re looking for, the skills, the experience, the expertise, et cetera. Yeah. Yeah. Someone who is incredibly, incredibly. Better than me. That’s the best way to answer. Now, honey, look, you know, I don’t know how appropriate it is to go over like what the attributes are.

You know, there’s a, there’s a hiring process that we go through and most. Most CEO searches are, are, you know, there there’s a, there’s a methodology for it, just like there’s a methodology for building software and methodology for, you know, building accounting is a pretty good methodology, but I, I assure you that the candidate and the person that we bring in, whoever he or she may be, will be.

100 percent focused on the channel, on the partners. There’ll be a very partner centric person. There’ll be a very strong operational person. Understanding that the experience of working with Kaseya has to be perfect. Understanding that, you know, providing a platform that changes the unit economics is half the battle.

The other half of the battle is making Kaseya the easiest, simplest, most friendly company to work with, getting rid of any friction. Continuously innovating, never stopping innovation, never stopping the quest to realize that MSPs are the most important thing at Kaseya and we have to make their lives better.

And now, you know, that’s it’s a high level answer but that’s, I mean, that’s really what’s, what’s critical for the person to run, next person to run this company.

Fred, you’ve mentioned several times that you’re looking for someone better than you. Right. So, of course, so my question is what, you know, with, with a new [00:45:00] leader comes change right under their purview. What kinds of things do you predict or expect might change under a new CEO? And, and what things won’t change?

Yeah, I, I look, I can tell you what won’t change is the laser focus. On the MSP, the laser focus on making this industry again, it sounds like a, like I’m saying the same thing over and over, but the industry, it has to change. The unit economics are broken. It is not sustainable for the average MSP. And the importance that they have to have a 10 percent profit margin, the MSPs are the freaking heroes that are keeping this damn economy going.

And I can guarantee everyone on this, listening to this podcast that will never change Ecclesayne period. That is, that is the most important thing. That’s what, you know Mike Triplett and myself and, and Alex Cuevas and Frank Sanders, all of us started, you know, almost, almost 11 years ago. And that is what will continue.

Remember we’ve, we’ve brought on board over the last year, a lot of new executives or promoted some great internal executives. So it’s not, it’s not, there’s not wholesale change. Sometimes CEOs come in. When I was brought into Kaseya, it was a very different type of situation. It was, we need wholesale change because it is broken.

You know, cause saves came off a record financial year. Are there things we can do better? Absolutely. And it’s a quest. It’s a never ending quest to be to be better. We had record growth, record EBITDA. The business is incredibly healthy. It’s, you know, it’s, it’s And it’s in great shape. So I don’t think that we’re going to see the kind of wholesale change a turnaround requires or, or, you know, or something like that, because the business is incredibly healthy, it’s, it’s one of the most desired assets in the world.

But I do think that this person is going to continue the tradition. Always be innovating partner first. You know, change lives that these are the things that make us say great. And that will not change things that to do better than me. Maybe it’ll get better interviews, you know, they’ll definitely be more handsome if it’s a man better style.

But that’s, that’s, I think what we can say. You’re doing yourself a disservice, sir.

So Fred last time you were on the show was last summer, summer 2024. Somewhat unexpected, actually entirely unexpectedly, you revealed during that interview that there was very big, huge product news coming at DattoCon, which was still a few months off at that point. That turned out to be Kaseya 365 user, which was the second big installment of the So here we are a few months away from KaseyaConnect Global your big conference in Las Vegas happening very end of April, Erick and I, of course, will both be there.

I’m gonna test my luck, Fred, and see if I can get anything out of you about what the big news might be, because I assume there will be more news. I’m guessing it’ll be Kaseya365 related. Is there anything you can kind of Tell us to look forward to end of April, you know, me, well, rich, I’ve known you nine, nine and a half years now.

So, you know, it’s hard for me to keep my mouth shut. And I’m not gonna, I don’t care. It’s cool. Cause say a three 65 end point, the first release really started to change. And then we had, cause 65 user, which continued that reshaping of the business model for an MSP. In Vegas, I, or we, you know, I, we, as you know, we will release and announce something that will, the impact will be a five X impact as to what can say a three 65 endpoint and user combined.

This is what we’ve been waiting for. This is the, the end game of end games. This will, I mean, this is, I, I really want to talk about it with you. I just. You know, somebody, somebody let me in ahead with a brick before I could finish, but it is, I mean, it’s, I’ll leave it at that. And this is not promotional bullshit.

This is not, you know, Hey, we’re trying to promote a show and you know, and all that. This has been, I cannot wait to unveil what we are going to be unveiling in Vegas. You heard how excited I was about [00:50:00] K365 before Vegas, Rich. We talked a lot, Rich and Erick, we talked a lot about it. And I do not think that we under delivered.

Over 7, 000 partners using a platform. SAS Alerts, a company we bought, great company, had about 1, 500 customers over four years, and that was one of the most innovative products out there. In eight months, 7, 000 MSPs on Kaseya 365. This is going to make that look small. The value and the change that this will do for our industry will be, it’ll be, it’ll make a say at three 65, the announcement that we did last year.

It’ll look small. It’s kind of like, you know, when you have when you have like a movie trilogy. You know, and the first one’s great. Second one’s great. The third one’s like, Holy frickin, you know, Holy smokes. This is amazing. And that’s what we’re going to do. And it’s going to be, it’s going to be a lot of fun.

So you’re, you’re on a pace to deliver an incremental billion dollars of value to MSPs right now with the first, you know, endpoint and and user. You’re, you’re talking about a five X impact. You’re, you’re, you’re thinking maybe 5 billion. Easy, easy. Yeah. And I mean, it depends on the adoption, right?

It’s K 365 endpoints to give you an example. We’re replacing 25 of spend with 5. We’re adding 30 percent more automation. So leave the automation aside, leave the efficiency gains that you that you provide for the MSP. So when they close five new accounts, they don’t have to hire a new technician.

Leave all of that math aside, right? Leave the fact that technicians don’t have to work a hundred hours a week extra, you know, leave that aside. We’re providing 20 of approximately 20 of pure profit per endpoint for every single, cause they had three 65 customer. I mean, that’s pretty incredible. That’s that’s hard cash.

That’s not efficiency gains or funky, weird, you know, politician math. That’s a hundred percent, same thing with user, right? Except instead of looking at the end point, it’s all the things licensed to the user. What we will be releasing in Vegas is it combines the two and it takes it to such another level.

And it will, it will change how MSPs. Not only their financial model, but their operational model. And you know, it’ll be, it’ll be a lot of fun. Well, we look forward to it. We did before we do even more so now. So we we will see you there. I don’t think we oversold it, right? I think it’s safe to say we didn’t oversell it.

We’re not overselling this. This is going to be pretty cool. You’ve got a pretty good track record of over delivering, Fred. We’re trying. We’re trying. And you know, the, the, the team, you know you know, the board, you know, Kevin Thompson’s been great. Mike, Mike Triplett, that is. Everybody’s been great.

They’ve been so, Insight’s been so, and TPG our investors. I’ve been with Insight the longest, have been so freaking supportive of this vision. It’s I can’t wait to Vegas, man. It’s gonna be great. It’s gonna be great. There’ll be a lot of Bon Jovi songs played by the band at the party night. I promise you that.

Well, I’ll I’ll say now what I said in my blog the last time you, you know, when we spoke to you over the summer and you said there was huge news to come in October at at DattoCon. Let the speculation begin. You know, about what it, we’ve got months now in, in, in our audience for this show, the the readers of my blog to.

But we will all find out in person at the end of April, you, you mentioned before you, you’ve done multiple Parker meetings just today from people who and at least one case wanted to talk with you about your change and so busy guy and a lot of people who want to have this conversation with you.

We appreciate you making time for us on the show right now for anyone in the audience who wants to. Get in touch, learn more about, learn more about Kaseya 365, et cetera, where would you direct them? Yeah, talk to your account managers if you’re a current customer, talk to your account manager ask them about Kaseya 365, ask to do a profit fuel.

If you do a pro, if you’re a current Kaseya customer, or even a pro, a prospect quite MSP who’s not a Kaseya customer, and you go through the exercise of what we call profit fuel. In about three hours time, half an hour of the, of the partner’s time and two hours of our time to do some stuff, we show you two things.

One, how much automation you will get for adopting the Kaseya 365, I mean, specific examples of [00:55:00] tasks that are being done today manually that will be automated. And the second thing is, what is the hard dollar savings you will get from Using Kaseya 365 opposed to the 12 products, other vendors that are, that are much, much more expensive.

And I think when most people go, actually, I don’t think, I know when most people go through this exercise, they come out saying, how do I, how do I do this? So I would encourage everyone to talk to your account manager and schedule a profit tool. It’s the, it’s so easy. It doesn’t cost anything and it can, it will change your business.

All right. Fred, a vice chairman of Kaseya. Thanks again for joining us on the show. Folks, Erick and I are going to take a quick break right now. When we come back on the other side, we’re going to chat a little bit about this very interesting conversation with Fred, have a little fun, wrap up the show, stick around, we.

We’ll be right back and

welcome back to part three of this episode of the MSP chat podcast. Very interesting conversation with Fred Ricola. They’re very enlightening. You know you read a press release about something like this, where the CEO is stepping out of that office, he’s stepping into the role of vice chairman.

And we’re, we’re searching for a replacement CEO. It’s not hard. In a situation like that, to think to yourself that Fred, in this case is kind of stepping into sort of a ceremonial role, vice chairman. He’s going to be on the board. He’s going to participate in board meetings. He’s going to provide input, but he’s not really going to be engaged in the company and where it’s going.

And, and so on. And I think. The biggest thing that I picked up on this conversation here is that is really not the case. Here, what he’s basically done is put himself in a position to focus on the stuff that he is most passionate about, most interested in, which is the, the vision, the strategic direction, the product strategy, the market strategy, getting that 10 billion top line goal that he was talking about there and handing off.

The operational aspects of running a company with, you know, 5, 000 employees now and doing a lot of hiring over there. So that’s just a lot of work managing those people you know, keeping the, the books and, and and invoicing and billing. And it’s a lot of work and he’s. Going to hand that off to somebody else who is very, very good at that.

Somebody I’m sure who he will be able to work with very effectively, and he will be able to kind of zero in his time on that more strategic stuff, which is what the press release said. But again, sometimes that sounds like the kind of thing you say in a press release, so that, you know, people don’t think that this, you know, this person is being punished for something.

This is clearly, this is something that he and the board have been talking about for a long time. It is part of a longer term plan. He kind of hinted at that. We, we don’t quite know what exactly. He will be doing eight, nine, 12 months from now. He kind of hinted that there is a plan for some of how he’ll be using his time.

But a hundred percent legit, just like I said, in the press release, he’s now the strategy master at Kaseya. And what they’re really hiring for is somebody to run everything else and keep that business firing all cylinders. Yeah, you’re right, rich. I mean, clearing the noise away so he can focus 100 percent of his time, energy and effort in growth and strategy and things like that.

I can just imagine, you know, well, it’s hard for me to imagine how he juggles all of those responsibilities as the CEO. And it’s a natural progression, right? As the organization grows. You know, he is, his leadership has to also grow and evolve and allow him to focus on the things that he does best. So having someone to manage the day to day operations is, you know, logically the next evolution here, you know, the way I see it.

And, you know, I, I, I mentioned during our interview, I said, well, Fred, it doesn’t sound like you’re going to be working any less at all. It’s just, you’ll be focused more strategically. On growth. So it’s and the other thing that I picked up, which is, you know, one thing that, that Fred said, like many other companies may just release a press release after the transition, the, the, the decision has been made and said, and done, and the new CEO is in place, and this is not the approach that they’re taking.

He was very you know direct about being open and transparent and communicating, you know, not only in this particular. Scenario, but even, you know, in, in other you know, very, you know, critical points in Kaseya’s growth. And he said, look, we’re over communicating. So it, it is a different approach and you know, it’s, it’s something that, you know, has to happen organically for the organization to get to that next.

Milestone that he was sharing with us. Well, he did mention [01:00:00] early on in the conversation, he’s been putting in 80 hour weeks for a little over a decade at this point. So I kinda hope that zeroing in on strategy gives them a chance to cut that back a little bit. What we will see, we will see in the months ahead who the new CEO is there, and we will all find out at Kaseya Connect Global, what this giant announcement that they’re making there is going to be.

We’ve got some time to to think about that a little bit. But in terms of time, speaking of time ladies and gentlemen, this leaves us with time for just one last thing, and here we are in January, Erick. It’s cold and flu season, as they say in the advertisements, and what is it that you want if you’ve got a cold or the flu, right?

It’s soup and lozenges to kind of ease the scratchiness and the pain in your throat. Well, wouldn’t it be great and a time saver if you could get them both? At once. And now in honor of National Soup Month, and I didn’t know there was such a thing as National Soup Month, but apparently we’re in National Soup Month, and in honor of that festive occasion the folks who make Progresso Soup have introduced Progresso Soup Drops, which are basically hard candies, you know, think cough drops, flavored Are you tired?

Like chicken soup. Does anything when you’re ailing with a cold or a flu, Erick sound better than cough drops that taste like chicken soup? Rich, it sounds like something that they put in your, you know, astronaut MRE kits or something, or, you know, when we’re populating Mars where everything will be drops and we’ll just, you know, suck on them and that’s how we will get our sustenance.

You know, for me, like, yuck, that’s, that’s what I think. Well, I will say the the marketers at at Progresso describe this product as soup you can suck on and let’s just not dwell on that image basically, but interesting product innovation from Progresso, just in time for cold and flu season.

And folks, that is all the time that we’ve got for you on this episode of the MSP Chat podcast. We’re gonna be back in a week with another episode. Until then, I will remind you this is both a video and an audio podcast, which means if you’re listening to the show, but you’d like to check us out on video go to YouTube, look up MSP chat.

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This show is produced by the great Russ Johns. It is edited by the great Riley Simpson. They are part of the team with us here at channel mastered. They are ready, willing, and able to create a podcast for you as well. And podcasts are just the tiniest, tiniest sliver of what we do for our clients at channel mastered to get the big picture of what we’re all about.

Go to www.Channel mastered.com channel. Mastered has a sister organization called MSP Master. That is Erick working one-to-one with MSPs on growing and optimizing their business. And you can learn about that at www.mspmastered.com. So once again, we thank you for joining us. We’re see you in a week, folks.

Until then, please remember, you can’t spell channel without MSP.