https://www.channelfutures.com/wp-content/themes/channelfutures_child/assets/images/logo/footer-new-logo.png
  • Home
  • Technologies
    • Back
    • Analytics
    • Artificial Intelligence
    • Cloud
    • Data Centers
    • Desktop
    • IoT
    • Mobility
    • Networking
    • Open Source
    • RMM/PSA
    • Security
    • Virtualization
    • Voice/Connectivity
  • Strategy
    • Back
    • Best Practices
    • Business Models
    • Channel 101
    • Channel Programs
    • Channel Research
    • Digital Transformation
    • Diversity & Inclusion
    • Leadership
    • Mergers and Acquisitions
    • Sales & Marketing
    • Specialty Practices
  • MSSP Insider
    • Back
    • Business of Security
    • Cloud and Edge
    • Endpoint
    • Network
    • People and Careers
    • Training and Policies
  • MSP 501
    • Back
    • 2020 MSP 501 Rankings
    • 2020 Hot 101 Rankings
    • 2020 MSP 501 Report
  • Intelligence
    • Back
    • Our Sponsors
    • From the Industry
    • Content Resources
    • COVID-19 Partner Help
    • Galleries
    • Podcasts
    • Reports
    • Videos
    • Webinars
    • White Papers
  • EMEA
  • Awards
    • Back
    • Excellence in Digital Services
    • 2020 MSP 501
    • Top Gun 51
  • Events
    • Back
    • CP Conference & Expo
    • Channel Partners Evolution
    • Channel Evolution Europe
    • Channel Partners Event Coverage
    • Webinars
  • Channel Mentor
    • Back
    • Channel Market Intelligence
    • Channel Educational Series
Channel Futures
  • NEWSLETTER
  • Home
  • Technologies
    • Back
    • Analytics
    • Artificial Intelligence
    • Cloud
    • Data Centers
    • Desktop
    • IoT
    • Mobility
    • Networking
    • Open Source
    • RMM/PSA
    • Security
    • Virtualization
    • Voice/Connectivity
  • Strategy
    • Back
    • Best Practices
    • Business Models
    • Channel 101
    • Channel Programs
    • Channel Research
    • Digital Transformation
    • Diversity & Inclusion
    • Leadership
    • Mergers and Acquisitions
    • Sales & Marketing
    • Specialty Practices
  • MSSP Insider
    • Back
    • Business of Security
    • Cloud and Edge
    • Endpoint
    • Network
    • People and Careers
    • Training and Policies
  • MSP 501
    • Back
    • 2020 MSP 501 Rankings
    • 2020 Hot 101 Rankings
    • 2020 MSP 501 Report
  • Intelligence
    • Back
    • Our Sponsors
    • From the Industry
    • Content Resources
    • COVID-19 Partner Help
    • Galleries
    • Podcasts
    • Reports
    • Videos
    • Webinars
    • White Papers
  • EMEA
  • Awards
    • Back
    • Excellence in Digital Services
    • 2020 MSP 501
    • Top Gun 51
  • Events
    • Back
    • CP Conference & Expo
    • Channel Partners Evolution
    • Channel Evolution Europe
    • Channel Partners Event Coverage
    • Webinars
  • Channel Mentor
    • Back
    • Channel Market Intelligence
    • Channel Educational Series
    • Newsletter
  • REGISTER
  • MSPs
  • VARs / SIs
  • Digital Service Providers
  • Cloud Service Providers
  • CHANNEL PARTNERS ONLINE
 Channel Futures

Business Models


The Doyle Report: Cloudnexa, The Maverick Among Us

  • Written by doylet
  • November 25, 2015
Penton Technology's Channel Brands named Cloudnexa as the inaugural "Maverick Award" winner for 2015 at the Channel Directions Live Event in September. Here's an inside look at the company and what sets it apart.

What makes a winner? What sets a company apart? What defines a market maverick?

We’re glad you ask.

At our inaugural Channel Directions Live conference, Penton Technology singled out one innovator for its bold steps in helping to define the cloud services market. For its outstanding achievements, Penton Technology recognizes Cloudnexa as the “2015 Maverick Award” winner. The company is the first Penton Technology Maverick Award winner and has a story worth sharing. It reveals volumes about what can happen when an organization identifies a hot market, makes bold if not controversial decisions to embrace it, and then stays the course despite challenges that arise.

If you’re not familiar, Cloudnexa is a managed service provider (MSP) that helps clients realize the full utility of cloud computing on Amazon Web Services (AWS). The Philadelphia-based company specializes in providing managed services, provisioning and migration assistance around the AWS cloud platform to midmarket businesses and government organizations. The company is both AWS Premier Consulting Partner and an AWS Managed Service Partner.

Cloudnexa’s roots date back to 2008 when the company was spun out of Freedom OSS, a solutions integration provider that was the brain’s behind the vNOC Management Platform that Cloudnexa relies on today. At the time, Cloudnexa decided to focus its energies around the new AWS cloud platform and managed services that could be developed around it. Though it picked what would ultimately become the market’s hottest platform, Cloudnexa hardly became an overnight success for its foresight. In fact, some thought its decision to align with AWS to be downright crazy.

“I can remember going to a Red Hat partner summit in 2009 where the leadership team laughed at me because I wasn’t doing more open source work at the time,” says Cloudnexa founder and CEO Joel Davne. “I thought that was so funny because Red Hat had this whole ‘challenge the incumbent’ campaign then.”

Davne recalls that Red Hat’s message to the industry was be bold, think outside the box and leverage innovation that challenged the status quo—precisely what Cloudnexa was positioning itself to do, not just to Microsoft, which was Red Hat’s gambit, but to all companies provided that solutions to help customers fortify their data centers.

In retrospect, Davne recognized that Red Hat and others were making many of the same mistakes that previous market leaders made before losing significant market share to disruptive innovators. This includes clinging to ongoing revenue streams, refusing to prioritize disruptive business models and delaying a move to modernize their workforces.

Recognizing that it needed to do something bold to avoid a similar fate, Cloudnexa decided to embrace a controversial strategy when it rebranded and repositioned itself in 2012. The company adopted the Cloudnexa name and discontinued traditional IT services in favor of going all-in on cloud technology. To Davne, the move was akin to changing the style of underwear he wore. At first it felt odd, he says, but then he got used to it.

“We had to take a lot of bold steps [then],” he says. “We had to get rid of some customers. We lost some staff because they didn’t accept the new business model. We did all the things we needed to do to reinvent ourselves.”

While it seems like a no-brainer now, decisions made then were difficult to reach. The company had, for example, a significant number of well-paying customers who turned to it for traditional professional services. Over the course of six weeks in early 2013, the company’s leaders argued bitterly over what to do about them and key vendor partners as it transitioned to the cloud. One faction within the company wanted to pivot and become a product company. Another wanted to stay the course and continue to be a system integrator. Still another wanted to go bold and define what a cloud managed services provider could be.

In the end, the “Maverick” faction within the company won out, and Cloudnexa went all cloud, all the time. One of its toughest tasks in the aftermath was telling loyal customers that it would no longer serve their traditional needs. Many, of course, went away, which put a financial strain on the company. Amid the turmoil, employees turned to Davne with dismay. “This is not what I signed up for,” some said. Others burrowed into their offices when they realized that the company’s new direction would not support their job roles.

As if these challenges weren’t enough, the company faced daunting go-to-market difficulties. Early on, Cloudnexa thought the market would embrace tired pricing models, which reduced the company’s financial exposure. But the market recoiled against Cloudnexa’s monthly minimum payments. The terms were simply out of sync in the new “pay-only-for-what-you-use” world shaped by Amazon and others.

“We did terrible for the first three months. I think we got maybe five new customers,” Davne recalls. “We were anticipating 10-15 new ones a month.”

After re-huddling in May 2013, the company realized that it was asking too much from its customers. So it decided to keep things simple and embrace Amazon’s pricing model—a decision that greatly reduced customers’ financial risk. When Cloudnexa made the switch, customers flocked to it. Today, the company is adding dozens of customers per month. Over the past three years, its sales have grown by 750 percent. And it’s headcount is approaching three dozen.

While momentum continues to build, Cloudnexa continues to experience certain growing pains. Its customer onboarding process is not working as fast as Davne would like. Delays have cost it clients who have signed up but then backed out before their services could be provisioned. Cloudnexa has also struggled to find new talent and has turned to education provider Grovo for help onboarding new employees. With a proven training methodology, Cloudnexa is hoping that Grovo can turn new recruits into capable employees who can provide customers with a predictable and consistent experience every time.

In addition to growing pains, the company has also faced some difficult business decisions, including how many cloud platforms to support. Although a committed AWS partner, Cloudnexa realizes that specializing in one public cloud limits its total addressable market. It also leaves it vulnerable to Amazon’s growing ambitions in the cloud space. Cloudnexa is now looking at opportunities around other cloud platforms from Microsoft and Alibaba.

While he believes his company’s success boils down to several bold decisions, Davne is quick to concede that growing customer interest in cloud technology has accelerated the company’s growth. With each passing month, he says, customer resistance to putting data, applications and faith in the cloud falls. CIOs are letting go of the notion that they have to maintain their own data centers to protect their employers, and fundamentally changing their approach to technology acquisition.

What surprises Davne is the number of fellow solutions companies that are not taking advantage of these recent shifts. Culture, he believes, is a big reason why. Successful business owners get stymied when pressed to change their business model and adopt new technology platforms simultaneously.

Speaking of culture, he hastens to add, his company’s own culture has changed as it has evolved. When it was in the throes of transition, the culture was edgier than today. Davne says his own brash tendencies have challenged AWS channel managers to see partners in a new light.

“It’s been a really great relationship. And I don’t have regrets; we are passionate about our mission. I just hope that together I can get another 250 percent [of growth] under our belt in 2016,” he says.

While that might sound ambitious, the company has laid the groundwork for another breakout year. In October 2015, for example, Cloudnexa unveiled its “White Label Managed Service Program (MSP),” which allows existing AWS partners to expand their businesses by offering Cloudnexa managed services to their customers. This development followed news in July when the company introduced automated provisioning for AWS customers that simplified and enhanced cloud adoption.

Also in 2015, the company made progress expanding its geographic footprint, selling more into Australia, Singapore and elsewhere than before.

Looking ahead, the company has high hopes for a new containerized options that will make it easier for customers wanting to deploying WordPress content management solutions on AWS and, in the future, Magenta ecommerce solutions.

“We ask customers ‘what if you could confidently provision and manage resources, security, budgets and policies across your AWS environments—from a single, simple user interface?’ It’s a simple message that is resonating,” says Davne.

Simple? No question, and maverick, too.

Editor's Note: The headline on this story was updated on Nov. 30, 2015 from "The Doyle Report: The Maverick Among Us". Also Cloudnexa is the Maverick Award winner for 2015.

Tags: Cloud Service Providers Digital Service Providers MSPs VARs/SIs Business Models

Related


  • McAfee Employees Getting Pink-Slipped in Likely 'Belt-Tightening'
    McAfee also reportedly is closing its Israel software development center.
  • Cloud Growth
    SADA SaaS Alliance Aims to Give Members ‘the Best Opportunity to Grow’
    Find out what the managed service provider is doing alongside Google Cloud Platform.
  • Two people in a data center
    The Benefits of Co-Managed IT for Enterprises in the New Normal
    The need to conduct business from anywhere has made enterprises more technology-reliant. Enter co-managed IT.
  • Business hands together, diversity
    Survey: A Closer Look at Diversity in the Channel Community in 2021
    The survey is designed to gain a deeper understanding of our channel community, amplifying diversity and inclusion.

Leave a comment Cancel reply

-or-

Log in with your Channel Futures account

Alternatively, post a comment by completing the form below:

Your email address will not be published. Required fields are marked *

Related Content

  • SolarWinds MSP President: Rebrand Will 'N-Able' Partner Opportunity
  • IBM Names CEO of New Managed Services Spinoff
  • Pax8 Follows Wirehive Acquisition with $96 Million in New Equity Capital
  • Cybersecurity Top Priority Among IT Leaders, AI/Automation Not So Much

Galleries

View all

New, Changing Partner Programs: AWS, Tech Data, Avaya, Verizon

January 11, 2021

Industry Perspectives

View all

The Right Data Migration Tool Helps Schools Move to Cloud During COVID Crisis

January 19, 2021

Cloud-Based CRM: What SMBs Need to Know about Backup and Recovery

January 19, 2021

Cybersecurity: What to Expect in 2021

January 19, 2021

Webinars

View all

Who’s Behind the Mask? Hacker Personas Explained

January 26, 2021

Your Network Perimeter Has Changed

February 18, 2021

How Managed Hosting Providers Thrive with the Alternative Cloud

February 24, 2021

White Papers

View all

Why Subscription Business Model

January 15, 2021

The Ultimate MSP Guide to Sales Efficiency

January 14, 2021

Eight Reasons Why MSPs Need IT Industry-Specific Sales Tools

January 14, 2021

Upcoming Events

View all

Channel Partners Virtual

March 2, 2021 - March 4, 2021

Channel Partners Conference & Expo

November 1, 2021 - November 4, 2021

Videos and Fastchats

View all

FASTCHAT: How SOAR Eliminates Security Challenges and Elevates Service Provider Revenues

January 6, 2021

Happy Holidays from Channel Partners & Channel Futures!

December 21, 2020

FASTCHAT: How Old, Unpatched Technologies Are Creating New Security Threats for MSPs and Their Customers

December 3, 2020

Twitter

ChannelFutures

bit.ly/2Y0kFZh twitter.com/Craig_Galbrait…

January 21, 2021
ChannelFutures

Our latest #Cybersecurity Roundup features @BitSight and @kovrrIns, @Vectra_AI and @AppOmniSecurity,… twitter.com/i/web/status/1…

January 20, 2021
ChannelFutures

.@solarwinds hackers target @Malwarebytes, impacting internal emails. #cybersecurity dlvr.it/RqzkZp https://t.co/aWqLjCCW9y

January 20, 2021
ChannelFutures

.@citrix $2.25 deal to acquire @wrike expands @CitrixPartners network into collaborative work management.… twitter.com/i/web/status/1…

January 20, 2021
ChannelFutures

.@Carbonite Migrate uses real-time replication to move workloads to #cloud with minimal risk and near-zero downtime… twitter.com/i/web/status/1…

January 20, 2021
ChannelFutures

Backup and recovery is essential for #cloud-based CRMs @ConnectWise #SaaS #dataprotection #cloudbackup #databackup… twitter.com/i/web/status/1…

January 19, 2021
ChannelFutures

You an #MSSP looking to avoid a #SolarWinds-type breach? @Asigra, @Barracuda, @CynetSystems give advice. Don’t blam… twitter.com/i/web/status/1…

January 19, 2021
ChannelFutures

What to expect in 2021 @Webroot #cybersecurity #MSP #remoteworkforce #remoteworking #Carbonite… twitter.com/i/web/status/1…

January 19, 2021

MSSP Insider

Newsletters and Updates

Sign up for The Channel Report, Channel Futures Update, MSP 501 Newsletter and more.

Live Channel Events

Get the latest information on the next industry-leading Channel Partners event.

Channel Partners Online

Want more? Find more channel news and analysis on our sister site, Channel Partners.

Media Kit And Advertising

Want to reach our audience? Access our media kit

DISCOVER MORE FROM INFORMA TECH

  • Channel Partners Online
  • Channel Partners Events
  • MSP 501
  • MSSP Insider
  • IoT World Today
  • Webhostingtalk

WORKING WITH US

  • Contact
  • About us
  • Advertise
  • Newsletter

FOLLOW Channel Futures ON SOCIAL

  • Privacy
  • CCPA: “Do Not Sell My Data”
  • Cookie Policy
  • Terms
Copyright © 2021 Informa PLC. Informa PLC is registered in England and Wales with company number 8860726 whose registered and Head office is 5 Howick Place, London, SW1P 1WG.
This website uses cookies, including third party ones, to allow for analysis of how people use our website in order to improve your experience and our services. By continuing to use our website, you agree to the use of such cookies. Click here for more information on our Cookie Policy and Privacy Policy.
X