SoftLayer CEO: VARs Must Prepare for White Label Cloud Services
At Parallels Summit 2011 in Orlando, Fla., SoftLayer CEO Lance Crosby (pictured) called on VARs and channel partners to embrace growing opportunities around turnkey, white label cloud services. Crosby stepped into the spotlight at Parallels Summit roughly three months after SofLayer merged with The Planet, apparently forming the world’s largest privately held hosting provider. Here’s the update, from The VAR Guy, seated in the front row at Parallels Summit.
Crosby says SoftLayer now generates around $300 million in annual revenues and $105 million in EBITDA (earnings before interest, taxes, depreciation and amortization). The company has about 80,000 physical servers with capacity for 150,000 servers. During his keynote, Crosby told channel partners, “cloud is not a technology. It’s a marketing term for on-demand delivery and consumption-based billing.”
At 550 employees, SoftLayer plans to push beyond North America into Europe and Asia later this year. At the same time, SoftLayer is expanding its channel partner program. The program, originally based on The Planet’s channel strategy, will evolve in multiple ways. The idea is to get VARs into shared hosting, virtualized hosting and other cloud opportunities, and then wrapping billing around the effort using Parallels Automation.
“You can turn on a white label solution in less than a few hours,” said Crosby. “From a traditional VAR perspective, most have wide hardware relationships with SMBs. Now it’s time for recurring revenue relationships.”
For 2011, Crosby says SoftLayer’s top priorities are:
- Global Expansion into Europe and Asia
- Accelerate new product launches
- Innovate or die
- Automate, automate, automate,
- Expand SoftLayer’s controls (API, mobile apps, control panel)
- Network, network, network: “It’s all about the end-user experience,” said Crosby.
- “If it can’t be automated it doesn’t live within the walls of SoftLayer,” Crosby added.
Presenting One Face to Partners
In a separate interview, SoftLayer Chief Strategy Officer George Karidis said the vast majority of the SoftLayer-The Planet integration work was completed the moment the merger was finalized in November 2010. Still, some loose ends — such as a merged billing system, will be completed in March 2011.
On the partner program front, SoftLayer is relaunching a referral program now. It offers a 10 percent commission in year one, 8 percent in year two and 6 percent in perpetuity. But take a closer look and you’ll see VAR commissions rising rather than sinking over time, because the typical customer engagement grows about 100 percent over the first 12 months, Karidis added. “We offer white label services for everything,” said Karidis. “If you don’t want our brand to be visible, we can hide it.”
Oh, and one parting shot: SoftLayer may launch a customer and partner summit in 2012. “We may piggyback on another event or do it complete on our own,” said Karidis. Two potential event partners include HostingCon 2012 and/or Parallels Summit 2012, he added.
Traditional VARs and Channel Partners, you’ll see turnkey solutions.