CRN Exclusive: Kaseya Unveils Automated Office 365 Billing Tool To Boost MSP Margins

Kaseya has rolled out an automated billing feature around Microsoft Office 365 to help MSPs improve margins, save time, and capture all end-user activity.

The IT service management vendor, with co-headquarters in New York and Miami, said the Unigma Cloud Billing Manager is fully integrated with Autotask, ConnectWise and Kaseya so that Office 365 invoices can flow through the professional services automation (PSA) platform just like any other recurring bill, according to Jim Lippie, Kaseya's general manager of cloud computing.

Until now, Lippie said Kaseya's MSP customers have, on average, needed to spend 30 minutes per customer per month manually billing them for their Office 365 usage. But with Kaseya's tool, Lippie said the MSPs work is done after they enter the initial client information since the system itself handles the reconciliation on a monthly basis.

[Related: CRN Exclusive: Kaseya Unveils Sales, Marketing Bundle Around Security, Network Monitoring Tools]

"It was an absolute nightmare for them otherwise," Lippie told CRN exclusively.

Some 87 percent of MSPs currently offer Office 365 to clients, and Lippie said Kaseya's new offering will dramatically reduce the amount of time they have to spend manually reconciling backend invoices. Within the next 24 months, virtually all end users will be on Office 365, according to Mike Puglia, Kaseya's chief product officer.

Kaseya's base package to allow MSPs for automate Office 365 billing for up to 25 clients for $125 per month, Lippie said. Each additional client beyond 25 will, on average, cost an additional $5 per month, Lippie said, though MSPs with a large enough volume of users will be able to add clients for just $1 per month.

MSPs that attempt to bill their customers manually typically end up with a lot of leakage since they fail to capture all of the Office 365 licenses in a client ecosystem, Puglia said. But Kaseya's tool will recoup revenue by automatically capturing any missing licenses, Puglia said.

Microsoft Cloud Solution Providers (CSPs) must be able to bill the end customer for instances of Office 365, Puglia said, meaning that MSPs taking advantage of Kaseya's automated billing tool are now eligible to become CSPs.

CSPs buying directly from Microsoft are able to capture 20 points of margin on each Office 365 instance, Puglia said, while MSPs procuring Office 365 through distribution or other means normally only get between 2 and 8 points of margin.

As recently as three years ago, Puglia said virtually all MSP customers were using either a hosted or on-premises Microsoft Exchange server. Monitoring and managing Exchange servers was a major source of business for most MSPs, Puglia said, but that has dissipated with the rise of Office 365.

Becoming a Microsoft CSP and managing instances of Office 365 will help MSPs recapture some of that lost revenue, according to Puglia. Plus the automatic integration into PSA tools means that MSPs won't have to handle loading the monthly invoices into accounting software like QuickBooks themselves, Puglia said.

Roughly 80 percent of Kaseya's customers are reselling Office 365 today, Puglia said, with the remainder instructing customers to buy it directly from Microsoft themselves.

The pervasiveness of Office 365 and the rate at which small business customers have adopted the productivity software made it an appealing option for billing automation, Puglia said. Kaseya plans to look into automating additional Software-as-a-Service tools such as Box and Dropbox, according to Puglia.

The Office 365 billing automation was built on the Infrastructure as a Service-oriented Unigma unified cloud management platform, Lippie said. Kaseya in May said it planned to acquire Unigma, and it took a few months of dedicated development work from Kaseya to build the Office 365 billing automation capabilities into the Unigma platform, according to Lippie.

Adding Office 365 to the Unigma suite creates a bridge between where most MSPs are today and where they want to go around Infrastructure-as-a-Service, Lippie said. As MSPs bring more clients into the public cloud, Lippie said it's only natural for them to use other monitoring, management and billing solutions.

"The majority of MSPs are still trying to get there," Lippie said.