VAR Dynamics Declares War On Office 365, Google Apps

VAR Dynamics, which sells SaaS and cloud applications via channel partners, appears to be launching a price war against Microsoft Office 365 and Google Apps. The VAR Dynamics strategy involves selling Zimbra Cloud at $3.50 per user per month — or about $42 per user per year. Google Apps costs $50 per user per year, and Microsoft Office 365 costs as little as $4 per user per month or $48 per year.

Admittedly, features and functions vary from one cloud platform to the next. But VAR Dynamics seems determined to raise its visibility among cloud services providers, VARs, MSPs seeking hosted email solutions.

In some ways, I consider VAR Dynamics a cloud aggregator — helping channel partners to source a range of cloud applications, including hosted Microsoft Exchange, hosted SharePoint and various email archiving and secure messaging solutions. But VAR Dynamics’ decision to heavily promote Zimbra Cloud caught MSPmentor’s attention.

VMware acquired Zimbra, an open source email platform, from Yahoo in January 2010. Zimbra,which has 60 million users worldwide, is available on premise but also hosted by a range of cloud services providers, typically competing against hosted Exchange.

VAR Dynamics sees a potential opportunity for Zimbra to emerge as a mainstream alternative to Office 365 and Google Apps. In a prepared statement, VAR Dynamics CTO Matt Baldwin said:

“With all the fuss over Office 365 and Google Apps, we felt there was an opening in the market for a significantly lower-priced option for SMBs that still delivers a very powerful and competitive feature set for productivity gains. With Zimbra Cloud, VAR Dynamics’ partners in competitive sales situations with Office 365 or Google Apps can now offer a very attractive alternative to their SMB customers, one that better fits their real-world budgets and needs.”

Still, Zimbra Cloud will likely face intense competition. Nearly 24 percent of the world’s top MSPs promote Google Apps to their customers, according to preliminary data from the fifth-annual MSPmentor 100 survey, which runs through Dec. 23, 2011. And nearly 43 percent of MSPmentor 100 survey participants say they promote Office 365 and its predecessor (BPOS) to end-customers. (MSPmentor is Talkin’ Cloud’s sister site.)

Even so, VAR Dynamics has been making considerable noise in the IT channel, partnering up with Reflexion Networks and other MSP-centric solutions providers in recent months. VAR Dynamics positions itself as a debt free, profitable company that promotes private label SaaS solutions to channel partners. This FAQdescribes how VAR Dynamics works with partners, including financial terms and customer support strategies.

I’m intrigued but I also don’t want to hype VAR Dynamics; as a privately held company, VAR Dynamics does not disclose its actual financial performance. Nor do I have a feel for VAR Dynamics’ partner ecosystem so far. But we’ll be following up on this story.