Zyrion CEO Describes Kaseya Deal, MSP Opportunity

Kaseya’s buyout of Zyrion, announced today, combines two profitable, debt-free software companies focused on managed services providers (MSPs) and enterprise IT departments. But is there overlap between the Kaseya and Zyrion software portfolios? Zyrion CEO Vikas Aggarwal offers some insights to MSPmentor.

First, some background: The MSP software market is experiencing an M&A feeding frenzy. Insight Venture Partners acquired Kaseya in late June 2013. Around the same time, SolarWinds (SWI) purchased N-able Technologies and AVG Technologies purchased Level Platforms. More recently, ConnectWise CEO Arnie Bellini indicated that his company was looking for investments, acquisitions or partnerships to extend the Modern Office suite.

Also during a follow-up interview, new Kaseya CEO Yogesh Gupta — a CA Technologies veteran — indicated that the company might evaluate some tuck-in acquisitions. 

Today’s Interview

Zyrion obviously fit that tuck-in description. It sounds like Kaseya parent Insight Venture Partners has been negotiating some time to buy Zyrion. The deal, unveiled earlier today, ultimately was packaged as Kaseya purchasing Zyrion. 

Among the topics MSPmentor discussed with Zyrion’s Aggarwal today…

MSPmentor: How are the Kaseya and Zyrion software platforms unique from one another?

Aggarwal: “That’s an easy one. Kaseya is very strong on desktop and server management. Zyrion is very strong on the monitoring of servers, applications and networking.” Aggarwal estimated that a few dozen MSPs already use the two platforms in tandem.

MSPmentor: How many employees does Zyrion have, how is the company funded and is it profitable?

Aggarwal: He estimated that the company has about 50 employees, is debt-free and became profitable last year. That means the combined Kaseya-Zyrion team will have roughly 440 to 460 employees, MSPmentor estimates. Essentially all of Zyrion’s team will join Kaseya.

MSPmentor: What percentage of Zyrion’s business comes from MSPs vs. enterprise customers?

Aggarwal: He said most of Zyrions business is based in North America, with a growing base outside the continent. The company typically competes with Nimsoft on the enterprise side of the business and serves large MSPs like CoSentry, Netelligent and General Dynamics. Roughly 70 percent of Zyrion’s business last year involved MSPs, vs. 30 percent for enterprise customers.  (MSPmentor note: Generally speaking, I think Kaseya’s split is closer to 50/50 MSP vs. Enterprise).

MSPmentor: Is the Zyrion solution available on-premises or in the cloud to MSPs?

Aggarwal: He indicated that MSPs run the software in their own clouds. Zyrion doesn’t host the software in its own cloud, but there’s nothing to prevent such a strategy in the future. (MSPmentor: Kaseya is available for MSPs to host on their own or via Kaseya’s cloud.)

MSPmentor: Aside from the complementary products, what’s the potential upside for Zyrion going forward?

Aggarwal: He indicated that Kaseya’s strong sales team will give Zyrion a boost as it seeks to get in front of more MSPs. “When we go up against the competition we win; we just need to get in front of more deals.”

Next Moves

Where do we go from here? We’ve reach out to Kaseya Marketing Chief Bob Davis (another CA Technologies veteran, by the way) and Gupta for more insights. Stay tuned.