Kaseya's "Game-Changing" Announcement, Labor Market Insights, Updates: SonicWall and SaaS Alerts

[00:00:00] Welcome to the Business of Tech Lounge, the live version of the Business of Tech podcast. It's Wednesday, May 1st, 2024 and I'm Dave Sobel. Today on the show, I can't help but hit some news

[00:00:25] about labor. Want to know how to retain your people with a benefit that pays for itself? We'll talk SonicWall and SaaS Alerts moves. We'll talk going viral with Joe Vizzani of Lunar Crush. A preview of this weekend's interview with Ramsey Sahoon from Evergreen Services Group.

[00:00:42] Plus, your questions and comments. I want to thank SalesBuilder, our Patreon sponsor, whose support makes this show possible. Focus on your IT sales workflow with the power of automation and visit them at salesbuilder.com. That's B-U-I-L-D-R dot com. Want to get your logo

[00:01:02] here? Vendors, you can do so with our Vendor Patreon program. A simple monthly subscription and visit patreon.com slash MSP Radio to sign up. I can't do this show without support and thanks again to SalesBuilder for theirs. Now we'll be taking questions and comments throughout the show

[00:01:20] so make sure to put them in chat. I have a dedicated questions section in the show with listener submitted ones and we'll take chat comments and put them on screen over the course

[00:01:31] of the entire show. And now, our top story. The big news of the week is Kaseya's very much hyped announcement. Kaseya has introduced a new subscription-based offering called Kaseya 365, which includes a range of products for managed services providers at low prices. The pricing,

[00:01:51] starting at $3.99 per endpoint per month, represents a significant drop and may put competitive pressure on other vendors. Kaseya 365 includes various features such as RMM, antivirus, EDR, MDR, patch management, ransomware rollback, and endpoint backup, all in the single license. Additionally, Kaseya announced its Partner First pledge,

[00:02:18] which includes several initiatives aimed at addressing partner concerns and providing more flexibility and affordability. Pulling from the press release, the five key initiatives that were announced to kick off this pledge are all products to be offered in one-year and three-year agreements.

[00:02:36] Kaseya re-emphasized the availability of all its solutions via one-year and three-year agreements. While the option has always been offered, one-year contracts will now be more in line with multi-year contract pricing to give partners more affordability with the adaptability of shorter-term commitments.

[00:02:54] A program called FlexSpend. Kaseya launched FlexSpend for backup last year to account for the ever-changing needs of backup services that make it difficult for providers to make long-term technology decisions. By allowing partners to switch between Kaseya's suite of

[00:03:09] backup solutions, this program allows partners to eliminate their risk, future-proof their business, and tailor their offerings to clients' needs. After the success of this popular initiative, Kaseya has decided to expand the program to its entire portfolio. Now customers can reallocate

[00:03:26] their spend from one product to another, regardless of suite, to keep up with the evolving needs of the market. Catastrophic Client Loss Protection. For many MSPs, losing a large client can be devastating to their business. Kaseya believes that they succeed when their partners do and understand

[00:03:44] the risks taken and want to support them. Kaseya will now allow customers to modify or amend their contracts to account for significant client loss so they can navigate those difficult times. Price Lock Guarantee. Lined with a commitment to offer partners top-tier solutions at competitive

[00:04:01] prices, Kaseya guarantees to lock in pricing paid for its solution. It's designed to help customers be protected against unpredictable price increases that are common among software providers. The Price Lock Guarantee from Kaseya caps any increase in current customers' product pricing

[00:04:20] to a maximum of 5% plus any adjustments necessary for inflation. And Month-to-Month Contracts for Datto's Backup Continuity Disaster Recovery Products. With the reintroduction of month-to-month contracts for BCDR, partners can now purchase new Datto subscriptions or renew an existing contract on a month-to-month schedule that allows them to respond

[00:04:42] to the needs of their clients in a manner that protects profitability and respects the evolving landscape of BCDR. Why do we care? There's a lot to unpack here, and I'll start with the hype. Of course the hype wouldn't live up to

[00:05:01] the actual announcement. It rarely does. But we have to give Kaseya credit for creating the hype. The company has been dropping hints for a while, and the lesson here is if you want buzz,

[00:05:16] you have to create it. We were paying attention to this announcement because of the buzz. Now I'll get to overhype later. Let's talk impact. The price point is disruptive. Hidden in the announcement is an express license which excludes MDR and costs $1.75 per endpoint.

[00:05:39] Now let's not overblow the value, as I would hope that the tools are not driving prices for providers, and there's a healthy margin to be found in services, period. Kaseya contends that the average Kaseya 365 subscriber will experience an immediate 30-50% profitability bump on each

[00:05:58] endpoint they manage despite wrapping more services around that device than they probably do today. If that happens to you, you've already priced wrong. It shouldn't be that impactful. That said, it's impactful on other vendors. Other vendors will now have to respond to that.

[00:06:19] Additionally, let's note Kaseya has responded to criticism. It's really easy to hate on the company. We do have to acknowledge when they announce changes. I was never expecting them to go on an

[00:06:31] apology tour. This is probably the closest we get to that version as these policy changes appear to be indirect responses to the community's criticism. Now let's note that what is a well-packaged, easy-to-deliver solution is client loss protection. That's easy to put together. Lose a big customer,

[00:06:51] you get an adjustment to your bill. It isn't a difficult benefit to offer, yet it's still savvy and well-positioned. It identifies a key pain point and addresses it. In fact, the entire announcement is, while overhyped, a response to customer pain points. Kaseya is offering that

[00:07:11] MSPs could cut their prices to be more aggressive. I'm going to boldly say don't do that. Like really, don't do that. Please don't do that. Don't take pricing advice from a software product company because their structure and a services structure are very different. Just don't do that.

[00:07:36] That said, they are putting pressure on their competitors with this move. Consider this, in other offerings you have to ensure that EDR is included. Kaseya has eliminated that sales objection by including it in their base bundle. Now would I use Kaseya's software? Maybe.

[00:07:58] If it meets my technical requirements and I can get a contract deal I'm comfortable with, I will work with most software vendors. Now I can think Fred Vokola is a dick, and at the same time note it's generally irrelevant to the terms of a contract deal.

[00:08:16] Now circling back to the hype, it's possible to overshoot the mark. Vokola said this before, The most important thing that's going to happen in 2024 in the industry and that's a pretty bold statement and it's coming from a pace of humility

[00:08:31] is we're going to make an announcement at Kaseya Connect on April 29th in Las Vegas that will be five times as impactful as the announcement of when we bought Datto. The announcement will fundamentally transform and benefit the MS community bigger than anything it's ever seen.

[00:08:49] Now that wasn't the announcement we got. It wasn't that big. It's not massively changing. There's no new product, no new line of business, no AI for certain. This is the danger of overblowing something. Rarely does reality line up and in this case

[00:09:09] going back and looking at previous quotes shows how much overhype there is. Now then again, everyone is talking about it. That's very hard to buy marketing. Got a question? Your own comment? Put it in the chat if you're watching live.

[00:09:29] Now I want to visit a few labor market stories that have been sitting on my desk. Want to keep your employees? A new study by non-profit Moms First finds that companies offering child care benefits experience higher employee retention rates and increased productivity.

[00:09:48] Working parents face challenges with child care costs and access resulting in decreased productivity. The study reveals that companies with child care benefits can see a significant return on investment as these benefits lead to higher retention rates, improved employee

[00:10:03] satisfaction, and reduced work absences. The cost of recruiting and training new employees is also higher than retaining existing ones. Offering child care benefits can cover the cost of these benefits by retaining just one percent of eligible working parents.

[00:10:20] Additionally, child care benefits have been found to boost recruitment and retention as much as paid time off and health insurance benefits. Employees with child care support are more likely to stay at their company, experience increased productivity, and report higher job

[00:10:36] satisfaction. Furthermore, child care benefits not only support a company's bottom line but also improve the earning potential and career growth of individual employees. According to a study of U.S. CEOs, fewer big company CEOs expect workers to return to the

[00:10:52] office full-time with only 34 percent expecting office-based roles to return in the near future. The study also found that hybrid working arrangements are likely here to stay, with 46 percent of CEOs expecting office roles to be hybrid. CEOs are confident in the growth

[00:11:08] trajectory of the U.S. economy and are exploring new ways of scheduling work. Additionally, CEOs are looking to adopt generative artificial intelligence more widely, with nearly four in ten CEOs expecting broader use within their organizations in the next 12 to 18 months.

[00:11:25] According to a survey by Reclaim.ai, desk workers' time in meetings has decreased by 31 percent since 2021, with an average of 14.8 hours per week in 2024. However, workers still attend an average of 17.1 meetings per week, with the average meeting length decreasing to 51.9 minutes.

[00:11:46] The rise of remote work during the pandemic contributed to the increase in meetings, but many workers are canceling or rescheduling meetings due to conflicts. Managing calendars and attending meetings can be costly, with employees spending 37 percent of their working hours in

[00:12:02] meetings amounting to about $29,000 per worker yearly. Gen Z workers are skeptical of traditional work culture and prioritize stability, flexibility, and autonomy in their search for a good employer. They value commitment to diversity and equity, high pay, and work-life

[00:12:23] balance. Remote work and flexibility are important, and companies that offer benefits and perks like mental health support and parental leave are highly regarded. Gen Z wants to feel heard, valued, and paid accordingly. And finally, from the 2024 Compensation Best Practices Report from PayScale,

[00:12:42] pay transparency is leading to workers expecting higher salaries, with 60 percent of organizations now sharing salary ranges on job listings. However, despite a tight job market and record high inflation, fewer organizations are planning on giving raises. Lack of compensation strategy and

[00:13:01] messaging behind pay reasoning is a problem, as employee engagement relies on understanding the what and why of salaries. Pay transparency has led to some workers leaving for higher paid positions elsewhere. Prioritizing fairness can mitigate the risks of bad feelings.

[00:13:20] Now, why do we care? Steve hits it right on the nose. Swapping a current employee for a new one is very expensive. The time to get a new employee trained and productive in tech jobs

[00:13:35] is surprisingly expensive. That's the key headline here. That's the area that we want to focus on, is making sure that you're retaining your people through smart investment. That's the bit that really is getting me excited about looking at this kind of data. I was intrigued

[00:13:52] really to see that the idea of child care benefits could make such a difference and saw such increases in retention. If you're looking at just the way Steve is talking about, keeping your current

[00:14:05] employees over a longer period of time, investing in benefits like this make a huge difference on par with health care. That's the big headline that we want to talk about and think about as business owners, and that's why we care. Now, a reminder, we continue to take questions,

[00:14:24] and I've got one. We'll bring that up during our question session, and I do watch the chat. Thanks, Steve, for contributing. Anyone else who wants to weigh in, put those comments right in the

[00:14:34] chat. Now, last weekend, I had Joe Vizzani on. He's the CEO of Lunar Crush. Let's do a quick recall from that interview. You look at this a lot. Help me understand the dichotomy here of viral

[00:14:50] versus consistency. The traditional idea in marketing is always the idea of, look, a good, consistent message over time gets heard. We hear all of the folklore myths of like, oh, it's seven touch points before a customer remembers you, those kinds of things. But the real message there is

[00:15:06] about deliver a consistent message over time so that it's heard versus a viral impact. There's this idea of chasing a single viral impact where that's going to make the difference. But you've

[00:15:19] looked at the data. Talk me through what is the right way to approach this and think about the outcome that you want. It's a little bit of both, I would say. You need that consistency in your

[00:15:32] messaging to stay out there. You have your current audience that you're creating content for. Your current audience is maybe a little bit more interested in the changes around the products or the services that you've created. You're trying to keep them updated on little things that you've

[00:15:47] changed. Then you potentially might have a larger brand launch or redesign or something that you do where you're always hoping for some piece of virality in what you're doing there. But what you really end up seeing in that is you don't just start, for most brands,

[00:16:03] just shooting straight up. You don't go from if your baseline is, hey, we get 100 new customers a day and then that's your kind of consistent piece. You might have a viral moment. Maybe you have a

[00:16:13] 500 customer day. You're most likely not going to see that trend continue unless you've just completely changed your product and launched something brand new that the world's never seen suddenly. Then maybe you're going to launch something new and you're going to see that

[00:16:28] increase. But what you tend to see and what's nice about having a little virality that happens in what you're doing is you might see a higher low. You might go from, hey, we were at 100

[00:16:41] was our average a day. Maybe we're now at 120. It comes back down from that 500 to that 120. You're just trying to build on top of that. That's why you see people go after a celebrity endorsement

[00:16:54] or something like that. They see a bam, they see a huge spike in what they're doing. They're probably going to see a little bit of a tail off in conversion because you've got people

[00:17:02] that are just trying something and dusting something off and seeing if they can figure it out. It's still a positive thing to try for both. Obviously, you just have to stay consistent. Social media is all about consistency, staying relevant, staying within the algorithm.

[00:17:18] Definitely go for the virality. Quick thought there. It's virality that we care about. That's why we care. What we want to get from Joe is the insight into the way we do about marketing. Consistency matters more than anything. That's really what our why we care moment is.

[00:17:39] Ultimately, we want to make sure that we're also offering opportunities for virality to happen. That's the other side of this. In fact, that's almost thematic for the day. If we think about what we were talking about with Kaseya and their interest in developing Buzz,

[00:17:55] they made sure there were opportunities for virality to happen with what they were talking about. In fact, I'll point out that there's already memes from their announcement this week. Are they all positive? Not necessarily. That's the point of generating Buzz,

[00:18:10] is putting it into a way where your listeners, your fans can do something to create that buzz on their own. Ultimately, that's the thinking around which answers the question of why do we care.

[00:18:25] The questions are starting to come in and I really do appreciate that. You can submit them in the chat window. We will be taking them just in a moment in our question section.

[00:18:34] We've got a couple of good ones that we'll be talking about. Let's hit up a couple of MSP focused product stories before we do that. Let's go ahead and dive in. SonicWall has expanded its cybersecurity portfolio with managed security services

[00:18:48] and cloud edge security solutions for MSPs and MSSPs. The company will showcase these solutions and its cybersecurity management platform, Sonic Platform at the RSA Conference 2024. Sonic Platform offers a unified interface for managing SonicWall products, streamlining management tasks and providing deep product integration. It's especially beneficial

[00:19:10] for MSPs and MSSPs, enabling them to effectively manage multiple client environments and automate key tasks. Sonic Platform serves as a centralized hub for managing client resources, providing comprehensive insights and enhancing security management and efficient inventory

[00:19:28] management. SAS Alerts has announced MSP Shield, a new offering that provides managed services providers with free access to the SAS Alerts platform for up to a year. MSPs can use the platform to protect their own cloud-based business applications and internal tools.

[00:19:44] Additionally, SAS Alerts has achieved ISO 27001 2022 certification, demonstrating its commitment to information security. The platform uses machine learning to detect and respond to cybersecurity threats and it supports popular SAS application and MSP tools. MSP Shield is now available to the MSP community. So why do we care? Working backwards,

[00:20:10] SAS Alerts is looking to be disruptive, which is what is essentially a much longer trial period. It's clever. I'll leave it to you to consider if you need the platform. Today clearly is about thinking differently with pricing to make customers take action. MSP platform plays appear

[00:20:27] to be the continuing theme today. Eliminating vendor complexity is the comment of what I keep hearing and that's what's systematic to what's going on with Sonic Ball 2. Every vendor wants you to buy into their major platform and that appears to be the trend that we're noticing

[00:20:44] and that's what we're looking for and why do we care? The questions are coming in and I really do appreciate that. Remember, if you bring your questions live, you'll get a live response. I

[00:20:55] enjoy taking these questions and of course if you submit them ahead of time, I'll answer them that way too. Q&A gets you a chance to get involved with the show. Let's take our first question

[00:21:07] and it's from a commenter here. What's the best way for a new entrepreneur to begin an MSP? So I've done a couple of videos on this and I would refer you right into my YouTube channel

[00:21:20] at youtube.com slash MSP radio and you're looking for if I was starting an MSP today, what would I do? In fact, my thinking there is that you want to focus on the productivity layer. You want to put

[00:21:31] together an offering that is very focused on what your customers need to do their work better. The more you can tie your offering back to driving more revenue in their business or cutting their

[00:21:46] costs, the more successful you'll be. I'll refer you to a video I've got around delivering business value that walks through my good, better, best model for linking to profit and loss statements. But that's the focus is you want to make sure you've got your first offering. I think

[00:22:02] new for 2024, I'd be focused on also finding ways to partner with distribution to fill in the gaps on the things that you don't necessarily do well and they can leverage distribution to do that.

[00:22:16] I hope that answers your question podcast next. I see you. I've got one from Steve who's talking about who's actually asking the question, what am I looking for from RSA next week?

[00:22:27] Well, that's a good question. I always look for a couple of things when I'm reviewing a particular conference. I'm looking broadly to see if there's any new entries in the market. I divide that into

[00:22:42] two categories. Am I seeing a new product space, meaning has someone created something new? Or then are there new entrants in the space? I don't have any particular vendors that I've heard of before

[00:22:56] that are doing announcement at RSA, but I am hopeful that there might be some more consolidation into having slightly less cybersecurity vendors. In fact, my view on what's happening in cybersecurity

[00:23:08] is we have too many vendors and we actually need to have a little bit less focus on a very core set of needs in cybersecurity. I think there's far too much out there and we can overboard on

[00:23:21] complexity of tools when this is actually a people and process problem. So for me, that's kind of what I'm looking for. I also noticed that you asked about the moms for study, a mom's study providing

[00:23:34] numbers about numbers of employee or cost. The quick answer there is, I don't know off the top of my head, but I'm going to pull ahead and put the link to the article right in there and I will

[00:23:45] include it in the description as well. And I will put it up into our chat so that you can find that link yourself in right within the chat from the video itself. You can click over and see that

[00:23:59] and we will also include it in the show notes when this gets put out. So that's where you can hopefully get into it and dig into some of the study yourself. I really love taking these questions

[00:24:10] and thank you for coming armed with them as an audience. This has been great fun to take them and we will continue to take them each week. Now, this weekend, I've got an interview with Ramsey

[00:24:21] Sahoon, who's one of the co-founders of Evergreen Services. Let me give you a preview of our discussion. We can be a true long-term owner of companies and operate those businesses independently. So those are kind of the two core tenets, long-term ownership and decentralized operating model.

[00:24:50] And we felt like those things were really conducive to the MSP space. There's a lot of intimacy with the customer. And a lot of times when you integrate businesses, there's a lot of

[00:25:04] customer churn as a result of that. So it was kind of conducive to a decentralized operating model where we could get the companies together and share best practices and be better for having all the businesses together, but still operate them independently where they have really

[00:25:22] close relationships with their customers and they can keep that stickiness and maintain that autonomy. So yeah, that's kind of the core of the thesis and that's been really unchanged for six years and 70 MSPs. So yeah, those were kind of the core tenets that emerged once we

[00:25:50] discovered the MSP space. Ramsey was a great interview and I'm looking forward for you all to get into that on this weekend. Wanted to give you a preview because he does talk about the way

[00:26:00] they put together deals and the way they think about acquisitions going forward. He'll tell you about the way they put together deals and also the way that they make money as an organization.

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[00:27:19] conversation and take more of your questions. Thanks for joining me for the Business of Tech Lounge. And I will see you next time. Transcribed by https://otter.ai