Kaseya CEO Fred Voccola: ‘Struggling’ Silicon Valley, Boston Companies Lack ‘Grit,’ ‘Don’t Have To Work For What They Have’

‘When I look at companies coming out of [Silicon Valley] or out of Boston, even L.A., they don’t have the grit. They don’t have the edge. They don’t have to work for what they have, and that’s why you see a lot of them struggling,’ Voccola told attendees of the Miami Tech Summit last week.

Kaseya CEO Fred Voccola said “first-generation technology hubs” like Silicon Valley, Los Angeles and Boston have "lost their competitive edge.”

“When I look at companies coming out of [Silicon Valley] or out of Boston, even L.A., they don’t have the grit. They don’t have the edge. They don’t have to work for what they have, and that’s why you see a lot of them struggling,” Voccola told attendees of the invite-only Miami Tech Summit on April 17, according to an audio recording of his remarks obtained by CRN.

By contrast, in Miami, where Voccola relocated Kaseya in 2018, businesses are “a little more real” and focused on profitability, he told the event’s co-host and co-founder Justin Sayfie during an on-stage Q&A session in which Voccola fielded questions about Kaseya, cybersecurity and the job force in Miami.

“Miami’s tech scene is a little bit different. It’s really a fabric of the community we all live in where it’s a little more gritty,” Voccola said. “It’s a little more profitability-driven than spread-sheet, future-that’ll-never-happen-driven. And it’s a little more real. It reflects what we have.”

The Miami audience applauded the remarks.

Sayfie thanked Voccola for moving the company to Miami.

“As a lifelong Floridian, I want to thank you for that and for locating your business here and for all the things you are going to do in the future,” said Sayfie.

Lobbying firm Ballard Partners, where Sayfie is a partner at several locations, including Miami and Washington, DC, was paid $40,000 by Kaseya last year, according to OpenSecrets.org, a non-profit organization that tracks money in U.S. politics.

In a statement to CRN after the panel, Kaseya said Voccola was highlighting what has made Miami special.

“Fred’s remarks about ‘grit’ were specifically calling out a characteristic that has helped establish Miami as a thriving global tech hub, and a quality that aligns with Kaseya’s values,” the statement read.

During the onstage discussion, Voccola also admired the “gritty curriculum” at Florida universities and colleges, which he contrasted with schools in Boston and California. Voccola received a degree in finance from the Carroll School of Management at Boston College, according to his bio on Kaseya’s website.

“Think about Miami Dade, FIU [Florida International University]. They’re very different than the educational institutions up in Boston, out on the West Coast. Very different types of curriculums,” he said. “It’s more of a gritty curriculum. It’s more of a curriculum for practicality. It’s also universities that are very willing to work with companies like Kaseya.”

He said Kaseya hires dozens of recent college graduates every year.

“We probably hire 75 to 100 young people, I almost said kids, right out of [university] every year. That’s really important to what we do,” he said. “It builds a great community.”

Two weeks ago, Kaseya said it axed 150 jobs from its Miami headquarters for “performance”-related issues.

Voccola—who was born in New Jersey and has lived in San Francisco and Boston—said the former tech cities he called home as well as the Northeast in general lack the spirit that “built our great country.”

“Miami is a city of first- and second-generation Americans,” Voccola said. “And that is what has built our great country. It is what the Northeast was 75 years, 100 years ago. We’re seeing that now. As my father, who represents that, there’s that immigrant chip on the shoulder that, ‘We want to make life better. We came here for a reason. We left a tough part of the world to come here make things better.’”

Voccola told Sayfie the $117 million deal for naming rights to Miami Heat arena is part of the company’s “seven-year plan” to make Kaseya as synonymous with good quality tech as Intel when it used “Intel Inside.”

“The end customers of our technology, the dentist, the owners of a law firm, have no idea what technology their IT and security providers are using, but we want them to say one thing: ‘Is it powered by Kaseya? If it’s powered by Kaseya, I know it’s got to be great because we saw them on the Miami Heat basketball arena. I saw them at the UFC fight. I heard the name Kaseya, I know,’” Voccola said.

Since the company plans to add “thousands of jobs” in the next “couple years,” Voccola said the naming rights will also help Kaseya attract candidates.

“We moved our company here, and we hired over 1,000 people here. We’ll hire another several thousand in the next couple of years,” he said.

Kaseya was previously located in San Jose and Boston but made the move to Miami in August 2019. Kaseya is backed by the Southlake, Texas-based private equity company Insight Partners, which installed Voccola as CEO in 2015. Insight also funded Kaseya’s $6.2 billion acquisition of its competitor Datto in 2022.

Next week Kaseya plans to host its annual Kaseya Connect show in Las Vegas, where Voccola has been teasing that the company plans to make an important announcement.

‘A Fresher Approach’

Rory Sanchez, an MSP pioneer who is now CEO of Forthright Technology Partners, Weston, Fla., just outside of Miami, said he agrees with Voccola that the South Florida technology market is more vibrant, fresher and grittier than Silicon Valley and Boston tech hubs.

“The tech ecosystem down here is very strong,” said Sanchez, a 30 year plus tech veteran who has transformed Forthright into a next generation secure digital experience solution provider with a robust Citrix practice. “Each of the counties has their own business development arms that are fueling the tech community. We also have South Florida Tech Hub which is driving investment and innovation in the area. Florida Atlantic University has a Tech Runway incubator that is bringing tech startups to the area. We are attracting a lot of tech talent. I see South Florida bringing a fresher approach to technology than Silicon Valley and Boston where it is more expensive to do business.”

Sanchez, who has started, built and sold several technology solution provider businesses, praised Voccola for the strong tech entrepreneurship and technology jobs he has brought to Miami. “Along with Verizon, Fred is another tech heavyweight that has brought the tech scene alive here,” he said.

Austin McCord, founder of two companies in the Northeast, including Norwalk, Conn.-based Datto, which was acquired by Kaseya for $6.2 billion in 2022, said he does not agree that Silicon Valley has lost its edge.

“I would look at the papers published and open-source contributions to evaluate a company's grit and edge, how are they helping a whole industry move forward. ... I would never say [Silicon Valley] lacks ‘grit’ or ‘edge,” he said. “For better or worse, they have unlocked a whole new world of GenAI that is going to change IT forever.”

What follows are excerpts of the conversation between Voccola and Sayfie.

Technology provides a lot of enhanced productivity, but also [comes with security risks]. What are some of the biggest threats that you find your products protecting against?

There's two types of cyber threat actors out there. One of them is folks that are doing it for political [reasons] or espionage. They are doing it for state gain. Very rarely is financial motivation the primary purpose for that. Those types of actors are not the types of actors that we see going after small to midsized businesses.

We see the financial actors. These are the ones who are the most dangerous actors. If [China] hacks into Lockheed’s system and starts to steal information about the next generation of Patriot missiles, that’s bad for the United States, that’s bad for the world.

It’s a certain type of limited cybercrime. The scary stuff is the people that are ransoming huge numbers of small to midsized businesses every day.

I get asked this question a lot, and we think about what are some of the systemic risks to society as we know it. I rank that up there as one of, if not the, highest. Here’s the damage that this represents to our society and the way we live every day: It’s analogous to organized crime when the mafia in the United States was at its height in the ’50s and ’60s.

It was estimated that there was a five to eight percent global economic “tax”—five to eight percent—from illicit activities from organized crime. Think about what that means. That’s such a massive number. And the potential for cybercriminal behavior, commercially driven, driven primarily by ransomware, is two to three times that. That is a statement that is almost unheard of. ...

The systems that run [a] carwash are not manual, they are computers. It’s very easy for cyber actors to breach the carwash and ransom the carwash, so you drive your car there, [the carwash] doesn’t work.

Now we say, ‘What’s the big deal?’

That car wash now has to pay a protection fee to the cybergang that ransomed them. Thirty thousand, forty thousand dollars. It’s a lot of money. I’ll pay it because I have to have my carwash working again. If I don’t pay it, I shut down for 10 days. Do the math.

Cybergangs are some of the most sophisticated organizations in the world. They’re multi-billion-dollar corporations. They actually have CEOs just like me. They’re actually much smarter than me and much more capable than I am. They’re running massive businesses, anonymous businesses, and it’s putting a huge tax on our society today, and it is just starting.

These threats are everywhere.

So what does Kaseya do to continue to innovate, or is there anything you can do to innovate, to anticipate future threats to stay ahead of those cybercriminals?

Sure. So that’s always the battle. The good guys and the bad guys. And hopefully we’re the good guys and they’re the bad guys. Right? ...

The reality is there are not enough resources to run down a cyber-attack on a midsized law firm, unfortunately. ...

The challenge is with the resources they have and the arbitrage they’re able to create—the arbitrage being huge financial gain, very little potential to get caught.

And the penalties of getting caught, if you ransom $5 million from thousands of different small businesses, the legal ramifications are less than if you take a gun and put it in a [bank] teller’s face and rob them for $500. It’s an interesting dynamic.

The volume of attacks is incredible. If you come into our SOC, our security operations center, we’re talking tens of millions of attacks on a daily basis. They’re brute-forcing their way into it. If someone asks you for your social security number a million times, maybe you are hung over or tired or your kids are yelling at you, you just might slip and give it.

Add AI into it and automation, you are able to brute-force very simple techniques at a volume where you will win.

You mention AI, and it’s a hot topic. Is AI going to make it even easier for the cyber criminals to even out-muscle the law enforcement or a company like Kaseya, which is providing a front-line of defense to these businesses?

AI allows human beings to be more productive. It’s a generational step change. We use a ton of AI in all aspects of our business. So if AI can allow a human being to be 300 percent more efficient with the outcomes that they’re doing, the question is, who wins the cybersecurity battle? If the defenders are 300 percent more efficient and the bad actors are 300 percent more efficient, it’s the same ratio.

Then you get into policy and how can you fix it from other areas, but one of the advantages we as the good guys, good girls, have is five years ago, if you asked this room here how many have first-hand knowledge of a business owner that’s experienced a commercial-driven cyber incident, I think one percent of us would have raised their hand. Now, I’d say a third of us would probably raise our hand.

The good news is that one-third of people who have direct knowledge of someone impacted, [now] they’re not going to allow themselves to be impacted again, and they’ll make the financial investments to protect themselves.

We have data that shows about 9.9, that’s almost an absolute number, out of 10 businesses, non-for-profits, NGOs, state and local governments, non-enterprise facing entities that have experienced an attack, were consciously under-invested in cybersecurity defense.

That sounds like I’m making up a commercial for the stuff that Kaseya sells. I’ll give you a great example, something we don’t sell. Most people here know what multi-factor authentication is. If you don’t, learn it and don’t ever not use it. ... Over 90 percent of cyberattacks, have happened for single authentication users for the application they are using. Its crazy. When asked ‘Why did you not have a multifactor authentication means to defend yourself?’ The answer was ‘Its too expensive’ Do you know how much multi factor authentication costs? About a nickel.

What can businesses and individuals do to protect themselves? You mention multifactor authentication. Kind of a set up to sell your goods and services, but obviously having a firm like Kaseya, but in terms of like people’s daily lives, and daily businesses, what recommendations would you have for businesses and individuals to protect themselves?

Sure, so I’ll start with business first. I think the first thing to recognize is that becoming knowledgeable about cybersecurity does not mean that someone needs to understand technology, beyond a very trivial level.

Multifactor authentication. I think everyone here knows what that is. I don’t think everyone here has a computer science degree from FIU, or University of Miami, or another great school like that. It’s very important to become educated at a very base level. Once that education is there, make sure whatever business is operating has a cybersecurity professional either in house, or a third-party firm or managed service provider, someone that’s educating you on your cyber insurance posture.

Allocate to cyber insurance the same percentage of your executive or ownership time that you would on any five percent of revenue, 30 percent probability. That’s it. That puts that business in the 99th percentile.

Never ever, ever, ever go on public Wi-Fi. Ever. End of conversation. You can do it with a VPN, but even that. If you have someone who wants to get into your stuff, they’re going to do it. Never do public Wi-Fi in a public place. Don’t use Bluetooth connected to your machines. Multifactor everything. Always have white space. White space is, don’t have a hard line, have a white space, different security protocols, between everything. If that doesn’t mean anything to you, that’s okay, ask those questions.

The chance of you being a victim of these criminals is now 99 percent less. They will move on to the next person because there are billions of businesses.

Personally. I don’t like social media. I can get into the craziness of that. Don’t ever give your social security number to anyone. If you go to Las Vegas and you win a million dollars and they say we want your social security number because we have to report you to the tax authorities, do it with the manager’s, manager’s, manager only. Things like that. Common sense stuff.

I wanted to talk with you about the Miami tech scene. We talk about the number of employees you employ. Many of those are tech jobs. How does Miami’s growing tech ecosystem benefit Kaseya? How do you see Kaseya’s role inside that ecosystem?

Great conversation point. Maybe I’ll answer it two ways. First, I’ll tell you the story about why Kaseya chose Miami. About 10 years ago I took over Kaseya. I lived here. I took over a couple companies and based them here and we grew.

I fell in love with the city, the university. The reason I moved Kaseya here, moved it from Boston and the Valley, San Jose, a couple of reasons. One, it is the best state in this country to do business. The policies are outstanding. The personal tax code is outstanding. It’s just a great state to do business.

This city is a city of immigrants. Miami is a city of first- and second-generation Americans. And that is what has built our great country. It is what the northeast was 75 years, 100 years ago. We’re seeing that now. As my father, who represent that, there’s that immigrant chip on the shoulder: “We want to make life better. We came here for a reason. We left a tough part of the world to come here make things better.” That creates work ethic. That creates loyalty. It creates a very effective workforce.

Ten years ago, Miami was a very inexpensive city. Now compared to San Francisco, New York, Boston, Chicago, LA, it’s still an inexpensive city. And the workforce, I believe, and we believe, is the best in the world. So we moved our company here and we hired over 1,000 people here. We’ll hire another several thousand in the next couple of years.

The educational institutions. Think about Miami Dade, FIU. They’re very different than the educational institutions up in Boston, out on the West Coast. Very different types of curriculum. It’s more of a gritty curriculum. It’s more of a curriculum for practicality. It’s also universities that are very willing to work with companies like Kaseya.

We probably hire 75 to 100 young people, I almost said kids, right out of uni every year. That’s really important to what we do. It builds a great community. Ten years ago I didn’t think the whole damn world would want to move to Miami. I’m kind of glad they did, in a way.

Now, what is the tech scene emerging to here? What will it become? There’s a couple dynamics that also happened.

I lived in San Francisco for a while. I had to in the late ’90s. The technology community was there. You had to be a hands’ reach away. There were a handful of private equity and venture firms that controlled most of the funding. Technology and innovation were closely held secrets. That’s changed a lot. The ability for geographic proximity isn’t required. I’d make an argument that first-generation technology hubs have lost their competitive edge. When I look at companies coming out of the Valley or out of Boston, even LA, they don’t have the grit. They don’t have the edge. They don’t have to work for what they have, and that’s why you see a lot of them struggling.

So the Miami tech scene is a little bit different. It’s really a fabric of the community we all live in where it’s a little more gritty. It’s a little more profitability-driven than spread-sheet future-that’ll-never-happen -. And it’s a little more real. It reflects what we have.

Before I let you go, I have to ask you about the Miami Heat arena. What factors motivated you to do that and what do you see as the benefit that you may have already realized and will realize from that partnership?

So for those of us who are a little grey in the hair or the beard, I’m going to give an analogy. There’s a company called Intel. Everyone knows Intel. In the mid-’90s. Personal computers were cool. They were big. And in order to run a personal computer you need a microprocessor. You need a chip. Most people didn’t know what a computer was back then, [never mind] a chip. Intel was trying to build a brand that said, ‘We’re the best chip.’ Intel would sell to Dell. They’d sell to Gateway. To Compaq, to Hewlett Packard, Acer and all these companies. ...

Intel came out with a direct marketing campaign to the end customer called “Intel Inside.” They spent six years doing it and they got to the point where every single buyer of a computer would say, “I’m not buying it unless Intel is inside.”

My mother, bless her soul, couldn’t tell you what a mouse was, but when she went to Egghead software to try to scrounge up enough money to buy her computer nerd son a computer a computer, she knew it had to have Intel inside, and that’s all she knew.

The analogy to Kaseya is this. The end customers of our technology, the dentist, the owners of a law firm, have no idea what technology their IT and security providers are using, but we want them to say one thing: “Is it powered by Kaseya? If its powered by Kaseya I know it’s got to be great because we saw them on the Miami Heat basketball arena. I saw them at the UFC fight. I heard the name Kaseya, and I know.”

That’s the driver. It’s a seven-year plan. ... That’s what we’re driving towards. We want Kaseya to be as analogous to safe IT and security and computing infrastructure as Intel is to the best PC.

That’s why we did it. That’s why we’re doing it. It also does help to have your name on the stadium where you’re trying to hire 3,000 people. People recognize your brand.