Kaseya CEO On Finalized Datto Deal: Our Job Is To Make Sure We ‘Build The Best Freaking Platform For Our Customers’
Kaseya CEO Fred Voccola talks to CRN about the changes ahead, including the news that Datto’s CEO Tim Weller will be ‘moving on’ and Rob Rae and Ryan Weeks will be staying. ‘Rob‘s awesome. … I tried to hire Rob for the last six years, so we got Rob finally. It took us buying Datto to get Rob Rae to be an employee,’ Voccola says.
With the mammoth Kaseya-Datto deal complete, Kaseya CEO Fred Voccola said the Miami-based vendor is ready to start integrating platforms, lowering costs and hiring more people.
The $6.2 billion deal closed Thursday and Voccola said he’s “super jazzed” about it.
“Now that Kaseya has bought Datto, we can focus on more things,” Voccola told CRN. “And one of the focal points of this transaction is the networking portfolio of IT Complete, which came from the Datto acquisition, will be the No. 1 networking infrastructure platform for MSPs by the end of 2024.”
CRN spoke with Voccola at Kaseya’s ConnectIT conference in Las Vegas about the details of the deal, who’s staying and who’s leaving, and what’s expected going forward.
Voccola also spoke about product updates and rollouts like VSAX, Cooper Intelligence Engine and KaseyaOne.
The Cooper Intelligence Engine, named after Voccola’s 13-year-old beagle/Pekingese mix Cooper, keeps track of technicians’ knowledge and education on modules and recommends and alerts to additional training and content to ensure IT experts are utilizing the most up-to-date capabilities.
“There is no software platform on this planet that has an AI engine that is ensuring that the users of the platform are getting the most value out of all of the features, the integration and the capabilities,” he said.
VSAX, coming in the fall, is Kaseya’s newest VSA tool that will provide extensive endpoint coverage, a modern, automation-first unified user experience, an increase in automation by more than 500 percent and the ability to scale to more than 1 million endpoints.
KaseyaOne is the central hub for the Kaseya IT Complete portfolio.
“You will see Kaseya continuously adding functionality into IT Complete via acquisitions as our customers determine that they need it. It’s always evolving,” he said.
Here’s what Voccola had to say about the finalized Datto deal and product updates and his reflection on his seven years as CEO.
This is Kaseya’s 15th ConnectIT conference and you’ve been with the company for seven years. What has been your favorite part throughout your time? What stands out when you look back?
Having the team and the vision come together and continue to come together. It’s not done, it’s not finished and it probably never will be. It’s like playing sports in high school. The coolest part about sports in high school, not university, is it’s all the guys I grew up with. It’s the guys I knew when we were little kids and we’re playing American football. Sometimes you’re getting your [beat], but you’re with the people that you went to kindergarten with. You’re on the same team and you’re building to something.
We started on our journey seven years ago and had some wins and some losses—hopefully we had more wins than losses—but we’re accomplishing something together as a group, and that’s a unique thing. I get pleasure out of it in business. Whether it’s five people or 11 people in a company or our 4,500 people, we’re doing something together and it’s people that might never come together in life. We’re all on the same team with a similar goal.
Seven years is a long time. A lot of people have grown up professionally, and I’m seeing people mature and grow up professionally doing things now they didn’t dream they would ever have the opportunity or capability to do five, six, seven years ago. We’ve promoted hundreds and hundreds of people. We’ve created hundreds of millionaires. People who started as interns are now running 200- to 300-person organizations. It’s a group of people with a common goal, let’s go get it.
Where do you predict Kaseya will be 15 years from now?
It’ll be one of the top four most valuable software companies on the planet. Everything SMB and software will be provided by Kaseya, period. IT Complete will be as ubiquitous to SMBs as Microsoft Office is to professional workers.
Let’s talk about the Datto acquisition. What’s happening to [Datto CEO] Tim Weller?
Tim Weller is no longer at Datto. Tim always did a great job of stewarding the business after Austin McChord, the founder, left. I got to know Tim pretty well during the process. Great guy, a great human being. He [cares] about people, which is pretty cool, which is not very common [and that’s] unfortunate in the world that we live in. But Tim will be moving [on] .He won’t be coming along on the journey. Tim is a CEO, and a very good CEO. Tim will continue advising me and the company and helping the company. He’s been a true pro during this process. But Tim will be moving on. He’s got other things he wants to do. He’s a CEO. And when I say ‘moving on,’ I want to be very clear. Tim and I will be in constant communication. Tim’s going to help me understand everything about Datto. He’s making himself available. He’s done an amazing job as a steward of the company. Tim has offered on numerous times to help me with anything I need or anything the company needs. He’ll always be available if anyone needs to reach out to him. But Tim will no longer be an employee per se. [He’ll be a] 100 percent unofficial adviser.
Tim bleeds Datto blue. He loves Datto, and he wants what’s best for Datto’s customers and Datto’s employees, and he’s going to help me make sure we continue to deliver on that.
Where is Tim Weller going?
He’s probably going to spend a lot of time with his family. Tim’s probably the best person to ask. But I’ll tell you this: Tim is a super-talented executive. He’s got a great track record. Tim can write his own ticket. Tim can do anything he wants. He can go run a company. He can go sit on boards. He can go be an operating partner at a private equity firm. He can hang out with his family, and he’s very close to his family. He’s got kids. He can write his own ticket. And whatever he does, I’ve got his back 100 percent.
What about [Datto Senior Vice President of Business Development] Rob Rae (pictured)?
Rob Rae is going to continue as the senior vice president of business development for Datto. Rob Rae is sticking around. Rob’s awesome. We love Rob. I tried to hire Rob for the last six years, so we got Rob finally. It took us buying Datto to get Rob Rae to be an employee.
What about [Datto Chief Information Security Officer] Ryan Weeks?
Ryan Weeks will continue as the CISO of Datto. He’s not going anywhere. We’re excited to have Ryan staying on board. You know, Datto’s commitment to security is second to none. And we’re looking forward to continuing Ryan in his position as the CISO of Datto.
Will Datto keep its name, or will it be Datto, A Kaseya Company?
It’s going to be Datto, A Kaseya Company, just like every other deal we’ve done. We’re keeping the brand, keeping the culture. We’re lowering all Datto prices an average of 10 percent. Some will be more. Some probably won’t move because some of their products are so low-priced. But we are making every product more affordable as we promised. And our job is to help MSPs make more money. And by lowering the price of our kit, we can do that.
What about keeping one-year contracts for Datto partners?
There’s a big misconception. Kaseya and Datto have very similar pricing strategies. We offer one-year contracts to customers. We offer three-year contracts. Just like Datto, Kaseya provides much more affordable pricing if a customer commits to three years and locks their same low pricing. Just like Datto does it. There are no intentions of changing that, 100 percent. The strategy will continue. If customers make a long-term commitment, they will receive huge pricing advantages to do that. And in this time of high inflation, where the average software vendor raises prices over 20 percent per year, customers locking in a low price for three years is probably the best thing they can do. We will continue just as we’ve done before with one-year and three-year pricing across the entire company.
Will Kaseya be offering retention bonuses?
We have. I don’t want to publicly talk about people’s compensation but the answer is 100 percent ‘Yes.’ Prior to Kaseya’s closing of this transaction, Datto had spent tremendous financial resources at their discretion to retain people. Kaseya offers a very aggressive compensation structure. Very aggressive. We believe in paying people very well. Whether it’s cash, stock, retention bonuses, other forms of compensation, we like to think we’re in the 99th percentile. Every tool that’s available is in place to make sure our second-most important asset we have, our people, are there to take care of the most important asset we have, which is our customers. So retaining key employees is a huge, huge aspect of this transaction, particularly people who interact with customers and deliver the world-class customer service that Datto has been known for.
Will Kaseya merge account managers from both companies or will you keep one or the other?
We want to retain every single account manager. We are hiring over 1,000 more account managers in the next seven months. One thousand more. Are we going to hit that goal? I don’t know. We’re trying to net retain [employees]. If five people leave, you know that that’s a negative. We want to have 100 net additions every month into our account management team.
In terms of merging account managers, there’s a lot of customers that have both Kaseya and Datto products. There’s a very specific plan for it. Here’s what that plan is. There will be two account managers on every product until the middle of August. In the middle of August, there will be a unified account management organization, and there’ll be one account manager on every customer. There will be a six-month transition period for any accounts that are changing the account manager. And for accounts that had both a Kaseya and a Datto account manager, there’s a six-month period of transition. And each account manager will be incented financially on that account. So if the Datto account manager is the account manager that is going to continue managing the account, the Kaseya account manager will transition to the Datto account manager and will be financially compensated for up to six months on anything that comes from that account to make sure that, in this case, the Kaseya account manager is incented to make that transition as smooth as possible. We’re investing a ton of money to make sure that the customer experience of account manager transition is very gradual and done very, very thoughtfully. And we’re spending literally tens of millions of dollars to make sure that goes very smoothly. That is on the critical path of what we’re doing in the short term.
So no layoffs in the account manager teams?
There are zero layoffs in the account management organization. I’m not saying people won’t leave. There’s turnover that happens every day. My hand to God, there are no layoffs. People might get fired if they [aren’t good at their jobs]. And people might quit because they want a new job. But zero layoffs in customer support.
Our intention is to increase the amount of R&D engineers on every product. We said this in the lead-up. The value creation—this is so critical for people to get—there’s two primary ways that you can create value in an acquisition. One is you can cut the [heck] out of costs and you make money because you’re saving money. You want to increase your profit, you cut a lot of costs. The second way is you grow revenue, and growing revenue leads to more profit. How do you grow revenue? You have to invest. The thesis for this deal, the $6.2 billion and change that Insight and myself and the investors signed up for is 100 percent about growth, which means it’s 100 percent about investment. It’s not a cost-reduction investment thesis.
Our competition is out there spreading FUD—fear, uncertainty and doubt—saying, ‘Oh, everything about Datto is going to go away.’ … That’s stupid. And when they say that, they’re just trying to take advantage of the fact that we couldn’t come out and say the truth because Datto is a public company. Now we can. Those are facts. Hold me accountable.
What did you feel Datto had in its stack that Kaseya needed?
A couple of things. Datto has amazing products. Datto is known for having great technology. Their networking portfolio is amazing. It’s a fraction of the cost of things from Cisco and other folks. It wasn’t a big focal point of Datto. Their switches, their routers, their access points. It wasn’t a focal point. We’re going to make it a focal point. That’s great technology they have. They made an acquisition of Open Mesh. Austin McChord, their founder, was a big visionary and proponent here. I share that vision with Austin. I think that’s a huge benefit. Last couple of years, Datto wasn’t focused on it. Commercially, they didn’t focus on it. We’re going to focus on it because MSPs can save a ton of unnecessary spend by leveraging the enterprise-class networking gear from Datto.
Datto’s backup franchise is phenomenal. It complements the Kaseya backup franchise perfectly. Datto’s Autotask franchise complements our PSA franchise perfectly. And Datto’s RMM franchise complements the Kaseya RMM franchise perfectly. There’s very little overlap. We’re super excited for it. They serve different segments of the market. I’m super jazzed about it.
But the networking stuff? Oh my god, they didn’t really focus on it. You know, sometimes companies, and this is not a criticism of Datto, but companies focus on different things. Well, now that Kaseya has bought Datto, we can focus on more things. And one of the focal points of this transaction is the networking portfolio of IT Complete, which came from the Datto acquisition, will be the No. 1 networking infrastructure platform for MSPs by the end of 2024.
You talked about VSAX, the Cooper Intelligence Engine and KaseyaOne during the conference. What makes them different?
Cooper Intelligence is the only one in the world. The fact that it’s Cooper makes it the greatest thing in the world. There is no software platform on this planet that has an AI engine that is ensuring that the users of the platform are getting the most value out of all the features, the integration and the capabilities. On top of that, there is no AI engine on the planet that has the intelligence of Cooper. And there’s nothing on the planet in the world of software that has the cuteness of Cooper.
VSAX, it’s VSA version 10 but we’re calling it X because it’s going dominate and it’s going to ‘X’ out every other old, first-generation endpoint management solution that’s worthless and doesn’t matter. Here’s why: When you think about endpoints, the definition of an endpoint has expanded to PCs, servers, laptops, cloud servers, that’s all there. But critical computing now extends to mobile devices, IoT devices, Mac machine and native cloud devices. What most MSPs have to do is they have to buy three, four or five different products to manage all of it because RMMs are focused on first-generation endpoints. They’ll spend money on expensive products that do network management, but why should you have four products to do what one can do? We’ve spent over $50 million into building a unified RMM where every single type of device, every type of endpoint is managed in one place at the same low price per endpoint.
So two things happen: The MSP doesn’t have to have four tools to manage all their endpoints and they’re spending one-third as much because they’re doing it all on VSA. The third benefit is all that automation now goes not only for traditional endpoints, but you can integrate automation between traditional and nontraditional endpoints, which is massive.
Finally, it scales to a million endpoints. There’s no scalability issues. As many MSPs are getting larger and larger with hundreds of thousands of endpoints, it doesn’t matter.
Kaseya invented RMM. We were the first RMM provider. Kaseya has now redefined what RMM means … and we’re looking forward to our customers taking advantage of it.
KaseyaOne is IT Complete. KaseyaOne is how people access the entry point to IT Complete. All the functionality of IT Complete can be visualized at KaseyaOne.
What are you still looking to provide to partners that you haven’t nailed down yet?
It’s IT Complete. IT Complete will never be fully complete. Just like Microsoft Office, Teams is now a part of Office. Before the internet, Microsoft added a browser to Office and Microsoft added OneNote to Office. As the computing landscape evolves, IT Complete, just like Microsoft Office did and does, we’ll always add new things. There are new security threat vectors, there’s all sorts of things that you can expect from Kaseya.
You will see Kaseya continuously adding functionality into IT Complete via acquisitions as our customers determine that they need it. It’s always evolving. It’s our job to make sure that we build the best freaking platform for our customers because they rely on us to make sure it’s complete. They look to us to research the market and to help them in establishing what their kit package should look like. That’s our job.