5 Key Statements From Kaseya’s Fred Voccola At DattoCon

‘One of the things that I learned in the first three months of when we bought Datto…I really understood how Datto operated in the MSP community,’ says Kaseya CEO Fred Voccola. ‘We tried to take as much of that as we could if and integrate the company.’

As DattoCon kicked off in Miami this week, Kaseya CEO Fred Voccola took to the stage with multiple announcements and accolades for the channel and what the Miami-based software company is doing for MSPs.

At the top of his keynote, he addressed frustrations “eight percent” of partners were experiencing around billing issues and apologized.

“We did five things right, three things wrong… 10 things right, three things wrong,” he said from the stage, according to a recording of the session heard by CRN. “Every decision that we made, hopefully we made the right ones, but we made mistakes when we integrated our billing, our back office [and] systems. That’s a hard task to do. Datto was a public company.

“Kaseya is a very, very large company [with] very different systems,” he added. “We integrated. There were some external reasons why we integrated them as fast as we did and what happened in that process is about eight percent of our partners experienced issues around billing. Things that seem obvious but got through, and that’s on us. There’s no excuse. It’s not because it was hard. It’s not because it was someone else’s fault. It’s something that we did not do well.”

He said he believes that number is down to two percent and hopes to see it down to one percent by the end of this month.

“But I’ll be very candid, we dropped the ball [and] this was a mess up on our part,” he said. “I want to apologize to the group that’s been affected by it because the last thing we want to do is break things.

“One of the things that we talked about not doing when we buy companies, we don’t want to break things,” he added. “Some of you that have experienced issues, we apologize and believe me, we are 24/7 trying to get better trust and that’s on us. There’s no excuse for that.”

By the end of the year, the experience will be “super kickass with a whole bunch of new things” and in the coming months that follow, he said.

More than 3,500 attendees hit Miami for the conference, which Voccola said will happen every year. In 2022, Kaseya bought rival company Datto for $6.2 billion.

At the show, new capabilities for IT Complete were announced such as Cooper Bots, a business process automation solution that harnesses workflow integrations and AI assistance to act on behalf of partners. Cooper Bots is part of Cooper AI Engine on the KaseyaOne platform.

The second announcement was Flexspend for backup program which gives MSPs flexibility in adjusting their backup spend to whatever configuration is required as they shift workloads to public cloud.

Lastly, Voccola announced secure payments which eliminates non-compliance risk from MSPs’ customers and requires minimal effort from MSPs to implement, manage and generates incremental revenue through payment environment optimization.

Voccola addressed other topics in his keynote regarding culture, pricing and innovation. Check out his five key statements below.

On Innovation

There’s a term that we use internally to say that something partners will notice and receive value from. We probably released thousands of features over the course of the year. Every product team has a quota of X number of killer features, and those killer features either come from customer telling us what to do or they come from the scoring of our product councils. Over 400 of them were released. We relaunched Datto network, we put tens of millions of dollars into Datto networking, we relaunched the product line, we supply the inventory and made the products committed. We integrated all of Datto into the same products into IT Glue. It’s a pretty busy year for innovation.

On Pricing

We’ve lowered the pricing on average 15 percent across the portfolio. Some products didn’t get pricing reduced, some products reduced more. So products will produce more and longe-term commitments than shorter-term commitments. But on average we reduced prices 15 percent. That’s important because that allows Kaseya products to be more affordable and you make more money. We didn’t raise prices either. But the industry raised prices upwards of close to 10 percent last year. Every software company or SaaS company raised prices about 10 percent. We have lots of incentives and creative aspects that make commercial sense for you.

On The Datto Community

One of the things that I learned in the first three months of when we bought Datto…I really understood how Datto operated in the MSP community. We tried to take as much of that as we could and integrate the company. One of the things we did is the Datto partner program became the Kaseya partner program. All the leadership of that group, all the mid-level management is here running that group, the MDF aspects of the partner development funds, we more than tripled the numbers, like $9 million compared to the year before.

It’s a huge investment in our MSP community. Almost all of the leadership are people that joined us from Datto who brought that great culture. In our product and engineering organization across the entire country, about half of product and engineering leadership, senior executives from the product and engineering leadership teams are Datto employees. Of our Leadership Task Force, that’s the cheesy term we use for the top 100 people that guide the strategy and leadership of our company, we have about 5,300 [and] roughly a third of them came from Datto. We also made a commitment to keep DattoCon forever. We brought it to our hometown and we’ll continue this event forever, as long as I’m here.

On The Technology Industry

Here’s what we’re seeing in the MSP market. The category of compounded annual growth for MSPs that are serving small-to-midsize businesses is growing at about 12-and-a-half percent a year. That’s unbelievable. Most people in this room, either own, work at or run an MSP. It’s super competitive. Business is hard. Customers are challenging. As challenging as our business is, it’s better than just about every other sector of the economy. Our customers are valuing us better. We think it’s an amazing market and it’s a great time to be an MSP.

On Increased Sophisticated Competition

There’s a lot of increased competition. Five years ago when we would do MSP conferences, everybody was friendly. There’s a lot more competition, a lot more. Renewables in 2023 are being taken to bid at a rate about eight times what they were a decade ago. There’s more sophisticated competition. The market has grown so much in the last 10 years that almost two thirds of MSPs have dedicated sales and marketing staff. That was less than a fifth a decade ago. Labor costs continue to rise, and I don’t think this problem is going to be solved anytime soon. That hurts margins and it makes it challenging to keep really good people.

Service delivery has gotten more complex. IT security has just simply gotten harder. From a security perspective, there’s more threat vectors than there were five years ago. Our job has gotten harder. The average price paid for managed service since 2015 is actually up about 29 percent. That’s only four-and-a-half percent a year on average.