Unitrends now leverages the Kaseya IT Complete suite, and will pay both higher margins on the initial sale of a Unitrends solution, and a full recurring revenue share for any Kaseya IT Complete solution that customer buys, ever.
Unitrends, a Kaseya company, which sells backup and disaster recovery solutions, has introduced Unitrends Xtra, a new component within the Unitrends channel partner program. It provides significantly higher margins to VARs, by leveraging the Kaseya IT Complete Suite to provide both high margins on the original Unitrends sale – and recurring revenue on all components of the Kaseya Complete platform that the customer buys, in perpetuity.
The target audience for this is quite large – VARs who have added a managed services component to their business, and who sell both MSP services and traditional resell offerings.
“We spoke to 300 different VAR partners who are trying to build a recurring revenue business,” said Fred Voccola, Kaseya’s CEO. “One way is to build an MSP business. But selling a managed service offering is not an option in some scenarios, such as when they are selling to an internal IT shop. Kaseya also provides our IT Complete platform, which provides all aspects of comprehensive IT management – security, backup, endpoint and network management, cloud management, service desk, compliance management, and IT documentation. The average Kaseya customer will purchase 2x in adjacent areas of IT Complete per year, all of which is subscription based.”
This is how Unitrends Xtra works.
“We give a full recurring revenue share to the VAR when they resell Unitrends, and we have substantially increased the amount of margin we pay the VAR on that first backup sale,” Voccola said. “Then, when the customer buys additional components of IT Complete, we will pay the VAR a full margin in perpetuity. That’s massive. There are lots of very good backup vendors out there like Veeam and Rubrik, but when a VAR sells them, they just get the revenue from the backup. Because Unitrends is part of Kaseya, we can give the VAR a recurring revenue from any Unitrends Complete purchase that the customer makes in the future.”
Kaseya winds up paying out more money on two ends – more margin on the initial backup purchase, and a full recurring margin on any Unitrends Complete purchase made later on, but Voccola said it still makes good sense for them too.
“It’s a good deal for us because one of the things we are trying to do is embrace the VAR community,” he said. “We want to get them to realize IT Complete is what small IT departments need. And we want to get VARs to invest in Kaseya. We are in the software business. This keeps our sales and marketing costs down. We are the only game in town that has a comprehensive single pane of glass complete IT management solution, and we are able to leverage that here for Unitrends.”
The Unitrends Xtra program is also a way to increase the sales of Kaseya’s other solution offerings to the Unitrends partner community.
“We are trying to jumpstart other Kaseya products in front of this channel,” Voccola said. “We don’t penalize the channel if they don’t actively sell them, but the subscription revenue is great, and we think that this is the Mighty Eureka of what VARs are looking for. It increases substantially the amount of margin – commission – on the initial transaction. That also applies for all first transactions on Unitrends with a customer through the program, whether it’s the partner’s first or 1000th transaction with Unitrends.”
Voccola also said that the new program isn’t designed as a limited time teaser, that Kaseya is committed to it for the long haul.
“What we are trying to do here is teach VARs who want to be MSPs how to make that pivot, but the program isn’t designed to actually turn their business into a managed services business. It’s to provide them with a higher-margin recurring revenue basis. But the channel told us that if we did this, not to do something and then take it away in a year. So we are making a contractual commitment that it won’t change.”
Unitrends made a major overhaul of its partner program last summer, after the Kaseya acquisition was announced. That program is substantially intact, except for the new elements to compensation Unitrends Xtra adds.