Kaseya Continues Cloud Transition, Acquires Security-Focused Scorpion Software

Kaseya has acquired security and authentication provider Scorpion Software for an undisclosed amount, in a move that executives said is a key step in the company's transition to a leading cloud-based IT management company.

With all of the security breaches in the past few months, Kaseya CEO Yogesh Gupta said that there was a lot of demand from customers for an identity and access management solution as part of the Kaseya portfolio. A longtime partner of Kaseya, Scorpion Software had a quickly and easily deployable solution, price range and was already integrated with the Kaseya platform.

"I think, to me, when I came to Kaseya a year ago, I saw that there was an opportunity to build a billion-dollar software company. For us to do that, we need to address the needs of the midmarket as well as MSPs in a very holistic manner through a cloud platform," Gupta said. "This announcement is a key part of making that happen. That's why we're excited about it."

Related: Kaseya Retools Channel Program For A 'New Partner Community'

More specifically, the acquisition will add features such as single sign-on, web-based SSO, secure remote access, multifactor authentication, credential management, compliance, password automation and password auditing to the Kaseya IT management offering. With the addition of those features, Gupta said that the acquisition will help Kaseya become even more of an "out of the box, in the cloud" solution for both IT management and security.

"To me, that's the beauty of this and why it gets me excited," Gupta said. "Scorpion by itself is unique. Kaseya by itself is unique. Together we're unstoppable."

"Our overall game plan is to be the market leader for IT management and security in the cloud," Gupta said. "It's as simple as that."

Dana Epp, founder of Scorpion Software, said that bringing Kaseya into the equation for the identity management vendor would help give IT service providers and midmarket IT professionals access to the information they need to keep their users and systems secure.

"The idea of leveraging Kaseya to weave those infrastructures directly into the next-generation cloud and a lot of the existing infrastructure to extend it really makes a lot of sense," Epp said. "When we look at identity management today, it's mostly looked at as an enterprise play for end users. It's missing out on a huge reality that while people have access to things, IT needs to manage it. People need to be able to manage and control and audit and know what's going on. That's some of the capability that Kaseya is adding."

Epp will join the Kaseya team as principal architect of identity access management.

NEXT: The Kaseya Cloud Transition

The acquisition is the latest step in Kaseya's transformation toward a complete integrated management solution in the cloud, kicked off with Gupta's appointment to CEO a year ago. The transition has been going well, so far, with 25 percent of current customers moving over to the cloud platform. Gupta said he expects that percentage to continue to rise, especially as more new customers are choosing the cloud alternative to the on-prem system. Gutpa said that he expects this will be a huge differentiator for the company going forward.

"It's really, really exciting," Gupta said. "There is not anyone else who is even talking about putting this together ...There is nobody who is putting together or talking about putting together a solution for midmarket or smaller companies."

As for partners, the executives said that the acquisition will allow both companies to expand their partner reach and continue to grow their partner ecosystem under a single offering.

Scott Brown, president of Canton, Ill.-based TimbukTech, said that he has been using Kaseya for more than eight years now as well as Scorpion Software for five years.

"It's definitely a good move, especially for Kaseya on their front to have [Scorpion Software] under their belt," Brown said. "I think this is really going to solidify the true integration between these products and really give them a good [portfolio] ... Now, being one, they can work as a whole. I think there's a lot of things they can bring in and things they couldn’t accomplish before."

"It gives Kaseya a leg up on their competition and other MSPs out there," he said.

Brown said he sees the most important aspects of the Scorpion Software acquisition as security and reporting, as well as compliance issues.

While he said that this acquisition looks like a good move for the company, he said that he is still unclear on the general direction the company is taking as it continues to undergo its transformation. He said that a lot of the challenges he has seen with the platform have been cleaned up under new leadership, but said the company is still on its path to "clean up" under new management. He said he has faith in the management vision, but communication on what that exact vision is has been sparse.

"I'm kind of in between here. I don't see a full picture yet. I think they've made some acquisitions that are good. I've said through and through they've got the right team to do anything they want. They're unstoppable. I don't see some of the forward direction ... but I'm running my own business and don’t see all of what they're doing," Brown said.

"Hopefully, this will help them continue to get their feet on the ground and move forward in a good fashion so they're not stagnant and get eaten up. Hopefully, this will be another notch in their belt and get done and integrated nicely and get running," Brown continued.

Kaseya said that the next step will start with the integration of Scorpion Software into the company. Gupta said the company will continue to be on the lookout for acquisitions and partnerships that make sense.

PUBLISHED AUG. 13, 2014