An Interview with Fred Voccola, CEO of Kaseya

Steve: So, Fred, welcome. Fred: Thanks, Steve. Great to be here. Steve: I'm glad to have you here, man.

So, uh, this has been something that I've been wanting to do for about a year, if not longer. So, I'm honestly, I'm really excited that I get to do this with you today. So, so truly, thank you for coming on and letting me interview you. Fred: Well, like I said, thanks for having me.

We're super pumped to be here, and this should be a lot of fun. Steve: Good. So, uh, you know, this is a show for MSPs. So, if, if you, listener, haven't heard of Kaseya by now, I don't, I don't know what to tell you, because Kaseya is huge, and, and you should know who they are by now.

They probably own at least one of the tools you're working with. Um, Fred, I, I gotta ask, uh, what, what is your strategy when it comes to like, uh, thinking about new acquisitions? Because I, I know you guys, you guys acquire a lot of things and there's, there's probably things that you guys have acquired that people don't know you've acquired too. Fred: Yeah, there's some of those.

Um, so maybe, Steve, the way I can address it is I'll talk about what our strategy is. Because acquisitions are part of it. But the question is why, and the problems we're solving. So it's actually pretty fun.

And it's, it's, it's been, uh, for me personally, it's been 10 years since I've been in the industry now, it's been awesome, man. I, I've loved the last decade in this industry. In the MSP industry. So about 11 years ago, or maybe 10 and a half years ago.

We started looking at, uh, at Kaseya and what we saw in looking at Kaseya was the opportunity to build a platform that could fundamentally change the MSP industry forever. That's a bold statement and maybe a crazy kind of statement to make, but we thought we could do it by changing the unit economics. of the MSP industry in favor of the MSP. And by doing that, just free up a whole world of possibilities for MSPs.

So let me tell you what I mean by that, and then where acquisitions fit into it. So, Kaseya's purpose, we build a platform. Our platform is called ITComplete. ITComplete contains all of the functionality That an MSP needs to deliver all of the managed services that their customers require, as well as all of the internal systems, like PSA and IT documentation and things, for the MSP to effectively and efficiently run their business.

We provide all that in one platform, one screen, if you will, or one series of integrations. And by providing it all in one place, a couple of interesting things happen. Because Kaseya owns all of the different platforms, Are all the different pieces of software it allows us to integrate them in a very meaningful way and allows us to build them as one product. And why that's important is when multiple technologies that are required to do a given task, when they are deeply integrated, is when that process or that task can be automated.

And as you know, Steve, automation is the name of the game Steve: Mm hmm. Fred: It allows engineers to do more and it allows fewer mistakes. Now, add on top of that, the power that AI bring, both large language model AI or machine learning type AI, As well as GenAI. So when we apply the AI capabilities to a fully integrated platform, the ability for that platform to automate upwards of 50 percent of what an MSP has to do is tremendous.

And what that does for an MSP is astronomical. An MSP can automate even a third, if not half, of the tasks that their engineers do on a daily basis. That MSP is substantially more profitable, effective, and makes fewer mistakes. Now, when we talk about what our journey is, Kaseya's journey, like I mentioned, is to change the unit economics of this industry in favor of the MSP.

So, Steve, here's a couple of statistics. When you think about most MSPs, most MSPs are serving companies of 100 employees or less. So, if an MSP has 70 customers, maybe two or three are co managed customers where they have 1, 000 or 2, 000 employees, but the majority of their customers have between 25 and 100 employees. Architecture firms, doctors offices, dental practices, et cetera, law firms.

Now, the business service providers. That are providing outsourced services to the customers of MSPs are predominantly law firms, as well as like tax and financial people. Profit margins of law firms run in the 30 percent range. The profit margins of financial and tax folks run in about the 30 percent range.

Did you know the average MSP in the Western world has an average profit margin of just under 10%? 10%. Steve: I didn't realize it was that low. I thought it was probably in the 15 percent range, but that doesn't surprise me.

Fred: Yeah, the ranges are all over, but the average, and we have about 54, 000 MSP partners and customers, call it 10 percent shade under. And if you think about what the MSPs do, number one, it's much harder. See, in the last seven, eight years, Most of these small to mid sized businesses, they've digitally transformed, or the business and industrial systems and applications that they use drive their business. So if their systems aren't always available and always secure, they're, they're not functioning.

So the job of an MSP is exponentially more important and more valuable to their clients. Then the law firms and the tax prep firms that are making three times the profit margin. On top of that, if we look at society, I've seen data that tells us that upwards of 70 percent of new job growth, of economic job growth is happening from small to mid sized businesses, right? New hires, opportunities, et cetera.

Particularly in at risk areas, we've seen small companies just, just the business of small companies exploding. And these small to mid sized businesses are able to compete because of advances in business systems and industrial systems. And keeping those systems always available and always secure is keeping the most important, high growth, and soon to be largest businesses. Part of our economic engine running, and that's what MSPs do.

And MSPs are making one third the profit margin of the other business service providers. So at Kaseya, we constructed this platform that provides all the functionality in one place. We automate it through integration and tremendous AI. So these engineers, these MSP engineers can be much more efficient.

And we charge one third as much as what the MSP would pay if they bought nine products from nine different vendors. So we believe by doing that, we've, we have literally put the foundation in place to change the unit economics for the entire industry. And now MSPs are receiving the financial rewards, you know, 25 30 percent profit margin. for listening.

that they should. Quite frankly, they should be higher given the value that they provide, but MSPs struggle a little bit, and our industry struggles a little bit, because a lot of the customers of MSPs, they don't necessarily understand all the risks of cybersecurity threats and the importance and the costs of making sure they're available. So that's our strategy, and as we've constructed ITComplete, we've made 17 acquisitions over the last 11 years. We spent over 12 billion buying these companies and, you know, the thousands of engineers we have that are integrating them and building it into one platform.

Our platform must be complete because if our platform's not complete. We have a tough time delivering on the promise of everything in one place. So that's our strategy and that's, you know, Steve, that's, that's how M& A fits into it. And again, our mission is MSPs powered by Kaseya should have profit margins three times the industry so they can invest in their business.

To better deliver for their customers and to, quite frankly, make the money that they deserve to make. Steve: I really like that. You know, you mentioned that most of your customers, and you said, I think you said you've got 54, 000 MSPs you're working with? That's a whole lot of MSPs.

Of the 54, 000, do you, off the top of your head, happen to know, um, how many of those MSPs are generating less than 250, 000 of annual revenue? Fred: Annual revenue? I'd say probably 10 of them are two employees or less. So, we measure by number of employees, Steve.

Steve: Sure, Fred: I would assume that number there's also quite a few MSPs, That aren't, you know, we have MSPs as large as Thrive Networks. You know, they're a billion dollar business. We have MSPs as small as Steve's part time gig, right? Where, you know, you, you, you have your day job and you manage your buddy's dental practice and your buddy's law firm at night, and you make an extra five or 10, 000 a month, which is great money, uh, doing that.

So we have all sorts, but I believe. The number of two or less is right around 10, 000. Steve: And, So, so that's a fifth, if not a quarter of your customer Fred: Yeah, about a fifth. Steve: So, I, I would argue that, um, five or fewer is probably half of your customer base.

Uh, and, and that's just based on the, the information that I've, I've gathered over the years, uh, understanding the MSP industry. So, one of, one of the questions I have is when, when you make these acquisitions, Traditionally, there's been a lot of frustration I've seen on the forums and I, I, I haven't run an MSP for a few years, so I don't have any skin in the game, Fred, but there's been a lot of frustration in the forums because it seems like you guys have, uh, kind of your, your play where, um, you know, you, you acquire a company, you change everything to be three year contracts, you raise the prices, you got the, the, um, The dev team, and then the product becomes stagnant.

That's, that's the frustration that I hear from the, the people who want to be loud. So what would you say to those people? Fred: I mean, I'd say I Thank you for the feedback, you know, like it's, feedback is a gift, man. And even if you don't like it, you take it and you try to learn from it.

We, when we bought Datto, we, we, we heard a lot of that. And one of the things that we did, and it's still published, is we published, we called it Just the Facts. And we published the investment in R& D. of every single acquisition that we've done, you know, right before we bought them and then after we bought them.

You know, IDAgent, RapidFireTools, ITGlue, RocketCyber, Graphis, you know, you name them. And the numbers are pretty staggering. And I think the average was we doubled the R& D team within six months. Every single acquisition that we've done, Steve, every.

Not like all but one, you know what I mean? Like an absolute every we've lowered the price when we bought the company, everyone. So the idea that we raise prices is simply not factually true. Everyone, even data, every single one.

And it's, again, it's all, we've all made all this information public and the team can share it with you. It's on the websites and everywhere. Steve: But by lowering, are you lowering the prices, but extending the, the length of the agreement? Fred: um, we always offer one and three year agreements for every product that we sell.

The three year agreements are the best price by far, but even on the one year agreements, the prices are lower than when we bought them. Steve: Do you, do you ever offer month to month terms for people that, And obviously that would be at a, at a premium, right? But do you ever offer month to month terms for people that just don't want a contract? Fred: we offer month to month terms in one case, and that case is when people are coming off of, so if someone buys a BCDR appliance, like a DattoBox, right, um, say it's a, they sign up for a one or a three year agreement for that DattoBox and that contract ends, they have the option of extending that DattoBox month to month, one year or a three year option.

No, we do not offer as a standard part of. New business other than the Datto BCDR business month to month degree. Steve: Okay. Um, so, so you mentioned the Datto acquisition.

Um, I feel like you've probably learned a lot over, over the years with all these acquisitions that Kaseya's made. Um, the, the biggest thing that, you know, people complained about with the Datto acquisition was the billing issues. And If we look at, again, a fifth to a quarter of your, your customer base is two people or fewer, um, billing issues really hurt, you know what I mean, like, when, when it's, when it's a multi billion dollar company like yours, you know, if, if somebody accidentally accidentally, Bills you five times what they're supposed to.

Usually for you, that's just a rounding error until the bill gets corrected. But for these smaller MSPs, um, these invoices can be just, they can destroy a business, especially if, if you guys start shutting off services because the invoice isn't paid, even though, even though the invoice was wrong. So. What, what did you learn, uh, from, from the integration of Datto and from, from all of the billing issues that you've, uh, overcome, and, and how are you going to deploy that, uh, learning into your next acquisition?

Fred: Yeah. So Datto was a so the learnings I could write a book. Literally, I could write a book. And I mean that like not in a funny way, but in a real way, because I think it could help a lot of people maybe not make some of the mistakes that I made or that we made.

Um, so a little background. Datto, as you know, and most of your listeners probably know, is a public company. Um, and they were our biggest competitor. So, you know, we acquired them.

And it's not a secret that the management team of Datto I wasn't overly enthusiastic about being inquired by one of their competitors. So it made for a, a interesting cultural time. Um, which, which is not uncommon in acquisitions. Now many of the acquisitions that we made prior weren't competitive.

You know, it was, they weren't competitive. Dato, um, there were a couple of areas that we competed with them. I think, looking back at the acquisition, uh, it's, it's been a financial success. We've made a lot of bumps.

I think when you look at a hundred acquisitions of that size, scope, and complexity, we're probably in the, you know, the, now that we're two, believe it or not, we're over two years past that. Can you believe that? It's crazy. Uh, we're, we're 4%.

of, like, success in all the ways you measure it. Customer retention, customer satisfaction, revenue, profit, all the different ways that that gets measured. But the direct answer to your question, the first part of your question, is on the billing side, and we made mistakes. There's no way around it, and, and, to your point directly, If I'm a two part, I mean, I've, I've started four companies myself.

I'm an entrepreneur who typically started companies without venture money and mommy and daddy's money. It was always, you know, doing it myself and I've been in situations where I've struggled to make payroll early on. You're a two person MSP, you get a bill from a vendor, and that bill's wrong, and it's wrong by a lot. You know, the bill's not getting resolved for various reasons, and you're worried about having disruption of service, and what does that mean to your customers?

These are serious things. These are very serious things for the customers. One of the decisions that we took at Datto or Kaseya during this process was relatively early on during the billing challenges, we decided to take our foot off the gas in terms of collections. You know, so if our system tells us that Steve's MSP owes us 25, 000.

And Steve says he owes us 5, 000. In normal times, Steve would pay us 5, 000. We would, you know, cause Steve believes he owes 5, 000. And we would keep the systems on and we'd work to settle what is, let's, let's dig into and look at the remaining 20, 000, right?

That's, that's how most businesses operate. Steve: Mm Fred: Um, and we took the approach for a while where we would even say, you know what, Steve has an issue, it's 25, 000. Don't pay us anything. Let's go and figure out what it is.

To error on that side. And I think it took us a good five months to work through all of the challenges. You know, we're through it now. I think we have, I have the data, the data won't mean anything to your listeners, all the KPIs that we track, but we're back to levels that are better than the pre data acquisition.

And it's the kind of place, the kind of thing where. If you mess up one customer or one partner, that's like one too many. You don't want to mess anyone up. You know, we've, we've done a fairly good job of trying to put customer first.

Now there's people that take advantage of situations like that, things like that happen, but I think the lesson that we learned was over communication is better, and sometimes over communication about hard realities that partners may not like is better than trying to deliver something that may be impossible in a time frame. But it's, it's, it was definitely not lost on Kaseya about the challenges that that poses, especially on the small. Smaller MSPs and we've adjusted. I mean, even today, we've made a lot of adjustments.

We're past the problems, but we made a lot of adjustments today where MSPs of, of certain complexity or, or, or sophistication, you know, like if you're a two person MSP, you don't have a dedicated account payable person. You just don't, right? I mean, that's the reality. So, the engineer who's supporting their seven clients and their, you know, 200 endpoints has to deal with a bill and an invoice and it's a pain in the butt and maybe the partner's on vacation and it gets, that's real life and we're attuned to it and we're spending a lot of time and a lot of money to streamline as many processes as we can and provide automation for as much as we can in that like commercial interaction space.

You know, it's, it's, uh, like a lot of things, like our, like our security incident we had three, four years ago, you learn a lot and you just do your best to apply them, try to be transparent and be better every day if we can be better. And I, I still believe, actually, I believe now more than ever, especially with the release of Kaseya 365. Our customers, our partners, we use the word partner and customer kind of interchangeably, our partners are more profitable than the majority, than the MSPs that are not our partners in the industry.

And that's what we're shooting for. Steve: Okay, I, I respect that answer. Um, earlier you mentioned AI, uh, in passing, and I know, um, AI is one of the topics that was, was floated as, as something that you wanted to talk about, so I suspect Fred: That's what I wanted to talk about. Steve: your, your PR team, when, when you reached out, so AI was one of those topics that was floated, and that leads me to believe that Kaseya is going to start ramping up, uh, discussion, mention of, of AI, machine learning, large language models, et cetera, uh, within its product.

I'm, I'm seeing a lot of companies starting to talk about AI. Uh, how, how their platforms have AI and machine learning. And I, I think, I think MSPs are starting to feel, uh, burnt out already on AI Fred: It's like cloud was in the past, right? Well, here's cloud, cloud, cloud, and yeah.

Steve: Yeah, because, because everyone, you know, every, it's like a buzzword. I mean, you know, if I, if I hear somebody talk about the, the synergies in AI, I'm, I'm You want to go postal somewhere, right? So, um, Fred: from Miami. Steve: yeah, it's everywhere, man.

It's everywhere. So, so all that to say, I, I'm of the mindset that, um, AI can be good, can be useful, but a perfect example of, of where it can go really wrong really quick. I just saw, uh, a Proof of concept where somebody was using Microsoft Copilot and the person not authenticated to the space was able to ask the AI chatbot about, um, uh, downsizing and what, what employees are going to be affected. And it just started answering.

So that obviously. is, is a, you know, data governance issue for that particular proof of Fred: Yeah. Yeah. Steve: So, gosh, I got one of these little flies bugging me.

Um, so, all that to say, I, I suspect Kaseya is going to get into the AI game soon, if not already. What are you guys going to do to put up guardrails to protect customer A from seeing customer B's data? Fred: And what was the second part? Steve: Um, Well, let's, let's start there.

What, what are you guys gonna do to, to protect customer A from seeing customer B'S Fred: Yeah, so let me start by talking about our AI and I'm going to show you something. I don't know if you can see this. See that little guy there, that dog on the back of my phone? Steve: Yeah.

Fred: That's Cooper. Cooper is my dog. He's in a boxing outfit there. I can see it.

And Cooper is our AI engine. So it's the Cooper Intelligence, Cooper Artificial Intelligence Engine. We launched Cooper three years ago. So we've been in this game for a while.

Not that that's good or bad. 'cause I agree with you. I think AI is a great word. A lot of companies put AI in their, in their corporate summary, and they get a 10% increase in their valuation just because the words AI are in there.

You know, it's, it's, it's crazier. You go to a party and you say, what do you do? I work in ai. Everyone thinks you're smart.

Um, so our approach to AI is very simple. So let's look at the fundamentals of ai. There's two types of ai. Gen and, and, and, uh, language model or, or, or machine learning.

Let's break it into those two. So the most common for productivity usage in sophisticated workflows isn't Gen AI. It's really language models and processing and, and the, um, machine learning type of AI. So machine learning and the models that, that are associated with it are all dependent upon how good and voluminous the data sources are that can be analyzed.

So, if you think about Kaseya, we have about, let's make the math easy and say 50, 000 MSPs to round the math. And say the average MSP has 20 employees or 20 engineers. Some have 1, 000, some have 1. So let's say 20 is the average.

That means I believe there's about a million employees. We have a million engineers using our products, MSP, a million MSPs using our platform every day. So, we get a tremendous amount of data, denormalized data, non uniquely identified data, so we're not tracking what Bill Smith does, we're tracking what MSPs do in aggregate, right? And looking at what they do, how they use technology.

How many keystrokes do they do for this? What, what workflows are they doing to accomplish a particular objective? How do they respond to particular instances or other types of things that take place? We have all that data in our model.

Inside of cooper. So that data allows us to really model out what MSPs are doing, what they're not, how effective they are, how to make them more effective, what steps can be done, what pieces can be built, how to leverage that huge source of information. We also have Upwards of 50 million endpoints that we're managing. I don't know how many hundreds of petabytes that we're managing.

We do millions of compliance scans a month, millions of security scans, hundreds of millions of documentation. So much stuff, so much data that we have. And we plug that in and we built two applications out of that. Two tools, because I believe AI, we believe AI is a tool.

Very, it can be an effective tool. To help people be more productive and from a machine learning piece, the two, the first two applications we built, one we released about three years ago was called Cooper Insights. All this is available in our platform and has been for years. What Cooper Insights is, is Cooper is watching you.

Let's say you're using our RMM product. Cooper is watching you. That sounds kind of creepy, right? Cooper's in the background, sniffing around, seeing what you're doing.

And if he notices that you're doing something that may not be optimal, or if you're not leveraging an integration or leveraging a feature that most people like you are using, or if you have a security setting that's not properly done, Cooper will give you what's called a Cooper Alert. Now, It's not clippy. Never that clippy crap from Microsoft. It's not annoying clippy.

I Steve: Why the, uh, okay, hold on a second. Clippy. I mean, now, today, Clippy is cool. I wish I, I wish somebody would make like a new version of Clippy Fred: Yes, we did.

Steve: if I had a little AI dog on my, on my Fred: That's what it is, baby. It's Cooper. It's Cooper, Cooper. I don't know if you can see.

You see the little, you see the little, uh, Cooper. It's hard to see it, but he has a pound. When you do what he says, he gives you a pound. But Cooper's insights tell you, hey, you're not getting the most out of your IT glue.

You're not, you know, you're setting whatever you're integrating right with your RMM. Why are you doing three steps? You could do two, use this shortcut, all that stuff. And here's the cool thing.

Um, about 60 percent of Cooper's insights were actually actioned upon. 60%. Clippy, it was turn the damn thing off back in the day. So it's super, it's super powerful because MSP, the technicians and the engineers, they're overwhelmed.

And these guys got so much to do every day. It's not, it's not like they're, they're working at Citibank and they're working hard, but they have a lot of time to, you know, drink coffee and hang out. MSPs get beat up. It's tough.

They have a lot to do. So that's the first piece of Cooper Insights. Then, last year, at DattoCon, we launched Cooper Bots. So, as the marketing says, Cooper had some kids, and those kids are the little Cooper Bots.

It's so cute, you gotta see it. I love my dog. But, Cooper Bots. These represent end to end multi process or multi function business workflows, and those Cooperbots are taking advantage of the deep integrations that we have between the different modules in our platform.

So a workflow. That may go across different technologies can be automated by a CooperBot. Um, some people call this RPA. It's a free RPA module, but the RPA isn't being done by just sharing APIs.

It's done because the products. Inside the application layer are built and indexed and the databases are merged. I'll give you an example. For those in your audience, most of you folks probably know what security awareness training is and simulations are and anti phishing technologies.

Well, one of the chal so hopefully everyone's doing security awareness training for their customers. And then you'll do simulation tests and you'll simulate a phishing attempt. And you'll monitor what users fall for it and what users don't in your report on it, right? And the bad people get, you know, get paddled a little bit in the backside, and the good people get a little certificate saying how smart they are.

Hopefully you and I are never one of those that click on a link and enter our credentials. God help us. So, it takes a lot of time to tell, to have your simulation technology Thank you. Talk to your anti phishing technology to say, turn off the banner that's going to come across on your screen because this phishing attempt is really a simulation and we don't want to warn the user, right?

Pretty common thing. Takes about an hour to do that with most products because these products aren't integrated together. So you got to really get in. You really, if you're using KnowBe4 for your security awareness training and you're using MimeCast for your You know, for your phishing, you really got to know those products well.

They don't have a native capability that does that. You'll get it done, you know, one out of three times. You might mess it up and have to do it again, but it takes time. With Kaseya, it's all pre configured and done.

There's a Cooper bot for that. It's called Drop A Phish. You press it, automatically configures every event to it, done, your results come out. It takes two seconds, four seconds, like some number.

That's an example of a CooperBot because the CooperBot took the data and it understood what people are doing. People being the engineers. What are the engineers or the technicians doing? And it automated it.

And because these modules are all integrated, it allowed a single workflow to get done. There's about 230. Cooper bots in the platform. So that's super, super cool.

Now, the next phase of AI that we're doing, and we released some of this at our conference in Miami, uh, when we announced Kaseya 365, and this is called Cooper Copilot. This is the Gen AI stuff. Now, my personal belief is I do not think that Uh, the Terminator times are coming and I don't think that AI is gonna, you know, Skynet's not gonna come and like, take over the world. I don't know, maybe it will.

If it happens, you and I, it won't matter anyway, you know, we'll Steve: Now, you know, somebody, somebody said, you know, everybody's worried about it being Skynet, but look at what AI does today. It's, if anything, it's more like minions. Fred: Yes! Steve: So, so yeah, I'm, I'm Fred: That's really Steve: in the Fred: I might, Steve, I might steal that from you.

That's actually really good. Steve: I didn't create it, so I don't care. Fred: Yeah, so, but so when we think about the Cooper Copilot stuff, if you look at closing tickets automatically or preemptively proposing solutions, so from our PSA, our ticketing solution, being able to open up the RMM and push a change out that'll close a ticket automatically, we have that capability and that capability is being built pretty aggressively and it's getting smarter because we're tying in our Gen AI with our language model so we can see what's being driven.

Now, and we can also pre write responses so the technician, instead of them having to write an email back, maybe Gen AI pushes the email out to them and the communication is done and it saves, if an engineer, instead of writing a hundred quick little emails to a user, if they don't have to write any, that saves 45 seconds per email. That saves them 60 minutes a day. That's an hour a day. There's lots of that in our platform.

I will say this. It is, it is our belief that in August, you know, where we are right now in 2024, I personally am not fully comfortable turning Gen AI on to handle things like security permissions, IT settings. I think Gen AI is not as accurate as, as automated humans. Non automated humans make a lot of mistakes.

Automated humans, you know what I mean, like through automation, that's, I think, safe. I think that, you know, I think each company has to determine do they want their Gen AI to be fully autonomous? Or Human Intervened Partial Autonomy. But as it applies to Kaseya, we're three years, we're 50 people for three years, so 150 person years, I guess.

Into this we have some super badass AI driven applications in the form of Cooper Insights, Cooper Bots, and the Cooper Copilot stuff is, it's pretty cool. And I think, you know, I think that when you look at what, uh, what MSPs have to do, you can make them 9 percent more efficient. It continues to change the unit economics. So an MSP, instead of having a hundred endpoints managed or a hundred users managed per, per engineer, it gets to 140 or 150.

That combined with paying, the average MSP right now pays 14. For all the kit that goes on an endpoint and 8 for all the kit that goes in a user, if they pay 5 for all of that with Kaseya for more automation, that changes the unit economics and it allows MSPs to have more financial resources. To invest and to do things in their business they otherwise just aren't able to do. If you run a business at 8 percent profit margin, you can't make a mistake.

You know, like, you can't make a mistake. It's really hard. That's why gas stations that run at like 5 percent profit margin, it's really hard to steal gas from a gas station. You know, because if they, if someone goes and steals the gas, it takes away the whole day's profits.

That's, that's kind of what we're doing there. Steve: I'm, I'm really impressed with what you guys are, are building with Cooper and, and all of the different AI and machine learning stuff that you're working on. Um, you know, the one last thing that I want to ask you about, uh, another one of those things that I always see people, uh, jabbing Kaseya when, when you guys aren't even looking, what's with the, the stadium, what, Fred: Oh, the arena. Steve: Yeah, the arena.

What was the thought process behind that? Fred: Yeah. Wow. So, so two.

primary drivers. So, you're a lot younger than I am, so you might not remember this. Steve: I don't think I'm a lot younger. Fred: You're a lot younger than me, brother.

I'm an old, I'm old as shit. Um, I don't know if you remember, and if your listeners will remember, and it's a great, Business case study. Like it's like a Harvard business case study, a famous corn fairy case study. Intel, Intel just got whacked recently.

Their stock got crushed, but Intel is one of the great, they're a great company. Innovator. Great. So if you go back to the beginning of the PC revolution, like the late eighties and particularly the early nineties, 92 to 96, The average human being, average American, didn't really know what a computer was.

So in 1992, I believe the statistic is one out of every five office workers had a computer. You go to an office and there were no computers on people's desks. They didn't have them. 1996, it was like 1.

2 computers for every, every knowledge worker. But Intel, Intel produced the chips, right? The microprocessors and, and they're Intel. We know Intel is a giant company today, but back then nobody knew Intel because no one knew what a freaking processor was.

Like, what the, what is a processor? You know, like a keyboard I get, I don't know what a processor is. So Intel was brilliant. Intel was selling to Dell, you know, IBM, Gateway, Acer, Asus, I don't even remember all these, Toshiba, all these old computer manufacturers.

Steve: hmm. Fred: And so Gateway wanted people to realize how good their processor was. So they went to a direct to consumer advertising campaign called Intel Inside. I don't know if you've ever seen the commercials, like, Steve: I remember Fred: Intel Inside.

And it was basically, what they said is, if your computer doesn't have Intel Inside, it's shit. If your computer has Intel Inside, it's great. Safe bet. So, I can remember my mother going, my mom and I went computer shopping.

You know, I had a good summer job, so we had a little bit of money. So I went computer shopping, because I was a computer science guy and I needed a computer. And I remember we were at Egghead Software, and then we went to Sears, because those are the two places that sold computers back in the day. Neither one of those companies.

And I remember my mother saying, and my mother, bless her soul, is one of the sweetest women you'll ever meet. I mean, she's just a, she was a saint. And she's like, Fred, just make sure you get Intel in your computer. And she had no idea what Intel was, no idea what a, I mean, no idea about anything.

So Intel did such a good job. And everyone associated a good computer's Intel. So, fast forward to us. I am not comparing my company to Intel because I would love to be thought of as good as Intel someday if we're ever blessed and lucky enough.

But here's what we want to do. We want to build the brand of Kaseya beyond just MSPs. We want business owners and business technology decision makers To hear the name and be familiar with the name Kaseya. Kaseya is Native American to defend and protect.

That's actually where it comes from and what it means. It's pretty badass. So we want, it's a weird word. It's not a common word.

So if people are familiar with the word Kaseya, and an MSP comes knocking on your door, and says, Hey, we're an MSP, we want to manage your IT and security, and we're powered by Kaseya, We want that business owner, that dentist, the lawyer, the architect, the IT manager at a, at a small bank to say, Oh, okay, you're powered by Kaseya. You're the best. You're safe. It's a seven year plan to build that brand.

And we started it with the Kaseya Center. Uh, the, the brand recognition of the word Kaseya is exponentially higher since we've done it. And we believe that powered by Kaseya has a meaning. Where if you are powered by Kaseya, you're powered by a name brand that provides protection and security for your IT and security, you know, posture.

And MSPs that are doing it, not only are they the most profitable, not only do they have the most successful, but they're using kit that everyone has heard of. It's a seven year plan. We're in year two of it. And so far, it's working pretty well.

I mean, hell, we got really lucky. The first year we did it, the Miami Heat went to the NBA Finals. You know, like, so, that helped a lot. The, um, there's a distant second benefit, and that is, we're headquartered in Miami, the Kaseya Center, and the building behind me, one of our buildings here in Miami, it's a Kaseya building.

You know, we're looking to hire another three, four thousand people here the next five years. We want to get the best in the world. And most people don't know IT and security companies, you know what I mean? They're not like name brands and we want to be one.

So when you get really smart people, they say, Oh, I would love to work at a company like Kaseya. So those are the two reasons we've done it. And so far it's, it's going pretty well. I can tell you right now, I've been to the Kaseya Center twice.

I went to both UFC fights that were held there. Big UFC fan, big fan of Dana. I think he's built a great company there. Um, but I, I, you know, it's not a, someone asked me, you did it for the executives to go to games.

We give all of our tickets away to either customers, um, you know, employees that win contests. And we do a lot for like the local kids, you know, cause we have a box and a bunch of seats when we get that. So it gives us the opportunity to give back. But, uh, the main reason is we are building that brand.

And we want MSPs powered by Kaseya to be the best and for people to want to be powered by Kaseya. We've probably distributed over a thousand leads to MSPs because people now hit our website saying, Oh, I want MSP services because they associate Kaseya with it. Steve: Fred, I gotta say, you are a hell of a businessman. Fred: I just got a really smart people around me, man.

I just, I just tell me, I just speak and tell, I just say what they tell me to say, Steve: Well, but, but let's, let's be honest. You are smart enough to, to find people that are smarter than you to surround yourself with, with those people who are, are experts at that one little thing. And, and you're smart enough to set, you know, surround yourself by all those people, uh, in order to come up with all these great ideas. So, you're still, you're, you're a hell of a businessman.

Fred: No, I appreciate it. I appreciate it. Thank you. And, and I think that the, the people in the company appreciate it cause it's really them and they're freaking awesome.

Very, very lucky. Very blessed. Got a cool crew. Steve: Oh, Fred: So when are you coming down to Miami to visit?

Check out a basketball game if you want, Steve: You know, that sounds like a great time. I will definitely, uh, I'll, I gotta talk to the boss, the, the wife, and, and figure out, yeah, I gotta figure out when I can do it. Fred: one of the cool things about the Kaseya Center is there's so many pictures of Cooper in there because, you know, we get to. Do it.

So we're, now we do a lot of work for animal charities and dog charities, and that's a big personal cause of mine and our companies, and it's, it's a great experience. So we'd love to have you down and, and really appreciate the opportunity to be on your show. Steve: I would love that. I, I so much for coming on.

Uh, thank you for being a guest, and I, I look forward to what Kaseya has to come. I think you guys have a big announcement later this year. Fred: Yeah, we have, uh, we have a big customer conference in Miami at DattoCon, and I assure all your listeners, The, the announcement that we're going to make will be the largest announcement impacting the most MSPs, impacting the profitability of the most MSPs possible, and there'll be some nice, there'll be an acquisition with this one as well, so this'll be a lot of fun.

Steve: Awesome. You, you know, everybody's speculating it's ConnectWise. Fred: ConnectWise is a great company. Uh, Jason McGee is a great guy.

I'll tell you a story about Jason McGee. This is going back a long time ago. He and I were both in New York City in the late nineties, like just starting our careers. We were like young whippersnappers.

And Jason was my younger brother's first boss, uh, at a company called Interactive Futures. It was a, it was a VAR run by a guy named Steve Scherr and, and McGee was really good then. He's, he's a talented guy and he was so good to my younger brother. I will never forget that.

So yeah. ConnectWise, great company. I'd love to work with Jay again. Steve: Well, thank you so much, Fred.

Uh, I, I really appreciate you coming on the show. Fred: Awesome. Thanks for having me. Take care.

Bye bye.