Kaseya Is Third Managed Services Vendor to Sell

They say things come in threes, and that’s what’s happened in the segment. Kaseya International Ltd. has become the third remote monitoring and management vendor to sell out in the last month.

New York-based , a firm specializing in underwriting mature technology companies, bought Kaseya for an undisclosed amount yesterday. As part of the deal, longtime CEO Gerald Blackie and founders Mark Sutherland and Paul Wong will exit the company. The new CEO is Yogesh Gupta, the former chief technology strategist at Inc. and former CEO of FatWire Software.

“We have spent over a decade building a successful business from the ground up. I am extremely proud of the Kaseya team, our worldwide customer base and our award-winning, best-of-class products,” said Blackie in a statement. “Yogesh Gupta’s blue chip credentials, coupled with the experience, guidance and investment strength of Insight Venture Partners, bring a strong and committed partnership that will further drive Kaseya’s growth and success.”

This is the third managed services software company to be acquired in the last month. In late May, Technologies was sold to Austin-based for a reported $120 million, providing that company with an extension into the SMB market segment. In early June, Inc. was bought by security specialist AVG Technologies for an undisclosed amount, giving Level global resources and AVG a new product line.

Insight Venture has a history of giving leadership and funding to companies on the verge of accelerated growth. It’s not uncommon for leadership changes following Insight investment, as growth often requires a change in style and experience. The Insight portfolio is replete with robust tech companies, including Ltd., Mimecast, Acronis, DataCore Software and Twitter.

First order of business for Insight and Gupta is no disruption to current operations. The investors and new management say they’re committed to maintaining the foundation built by Kaseya and Blackie’s team.

“Kaseya is the market leader in IT management solutions for and midmarket enterprises,” said Mike Triplett, managing director of Insight Venture Partners. “We intend to expand on that leadership position and bring significant value to Kaseya, its customers and its employees.”

The installation of Gupta as CEO could be a telegraph of Insight’s future aims. A venture capital firm like Insight isn’t interested in building a company to an IPO event. Rather, it wants to build the company’s equity and flip it for profit. This is likely what happened at N-able, which took on venture funding in 2011 from .

Kaseya is a different animal, though. While it provides remote monitoring tools to MSPs, it’s always positioned itself as an “IT automation” vendor rather than a remote monitoring and management vendor. While Kaseya has a substantial MSP ecosystem, it sells more software to small enterprises for internal automation, and this direct-sales approach has been a longstanding source of channel friction.

Gupta, who has a history of managing enterprise products, could be the catalyst for expansion. Selling to the enterprise has advantages over the conventional managed services market; deal sizes are larger, more profitable and more quickly recognized. With Gupta’s connections in the enterprise market, it wouldn’t take much to expand Kaseya’s existing beachhead.

As Gupta said, “Kaseya’s customers rely on its market-leading IT service management offerings, and we will continue to evolve our offerings to meet their changing needs while delivering a compelling value proposition. Industry trends such as BYOD and cloud computing are creating challenges and opportunities for companies. I look forward to leading Kaseya to its next level of success through accelerated innovation, and partnering with our customers to drive their success in this new world.”

Insight’s connections could help Kaseya with such expansion. Insight has a history of leveraging its portfolio of companies to accelerate sales. It’s not uncommon for Insight companies to coordinate sales activity, and, in some cases, they provide special discounts to their brethren for products and services.

Some will speculate the acquisition of Kaseya, Level Platforms and N-able in rapid succession represents the end of independent remote monitoring and management tools — that such companies can’t stand alone in the evolving market. In reality, these companies were built for roll-ups; they are products that belong in a broader portfolio of systems vendors. It really isn’t an argument over the end of RMM, but rather what took so long to get here.

As for the change in leadership, it’s a shame to see so many familiar faces departing following the check-cashing ceremony. But, truth be told, leadership changes are a necessity in these situations.

The title of Marshall Goldsmith’s book says it all: “What Got You Here Won’t Get You There.” People like N-able’s , Level Platform’s and Kaseya’s Blackie did great jobs building their companies, but a new mind and skill set are needed for the next evolution of growth.

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  1 comment for “Kaseya Is Third Managed Services Vendor to Sell

  1. July 24, 2013 at 4:51 pm

    Managed services is an area that is showing strong growth right now. More and more organizations want to pass many IT activities onto someone else so they can streamline their efficiencies.

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