Kaseya revealed this week it has picked up an additional $500 million in funding to drive, among other things, future acquisitions.
The provider of a platform for managing the delivery of IT services, dubbed IT Complete, has already absorbed a number of companies in the last two years, including Spanning Cloud Apps, RapidFire Tools, and IT Glue.
This latest round of investment is being led by TPG, a global alternative asset firm, and Insight Partners, an existing investor in IT Complete. The overall goal is to use the funding to not only acquire additional companies to expand the IT Complete portfolio but also increase research and development and extend the reach of the company further into Asia and Europe, says Kaseya CEO Fred Voccola.
Kaseya is already experiencing 30 percent organic growth as more IT organizations rely on managed service providers to deliver an increasing range of IT services, says Voccola. All told, Kaseya reports it now has more than 40,000 customers using one of its offerings, which can either be acquired via the IT Complete platform or individually from one of the companies Kaseya has added to it portfolio.
The company is betting that growth will accelerate as more midmarket organizations determine it doesn’t make economic sense for them to hire their own full-time IT employees, says Voccola. When to total cost of hiring a full-time IT professional is tallied, Voccola notes it can be as high as $200,000 per employee.
More midmarket organizations over the next three to five years are going to decide to initially rely more on MSPs for data protection and cybersecurity services. But the longer-term trend is toward midmarket organizations outsourcing all their IT operations to an MSP, says Voccola.
This transition is only going to accelerate as organizations continue to realize how dependent their operations are on IT, adds Voccola.
“Even a dentist is now a technology first company,” says Voccola.
Overall, the managed services market is expected to grow from $180 billion currently to $282 billion by 2023, a compounded annual growth rate of 9.3 percent, according to research firm MarketsandMarkets.
The capital needed to address that opportunity is driving a wave of merger and acquisition activity among providers of MSP platforms. What remains to be seen, however, is to what degree MSPs will decide it make more sense to rely on a commercial platform provided by a vendor such as Kaseya versus relying on their engineering expertise to build their own operations platform using a combination of open source software and packaged applications.
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