March 14, 2018
**Editor’s Note: “7 Minutes” is a feature where we ask channel executives from startups – or companies that may be new to the Channel Partners audience – a series of quick questions about their businesses and channel programs.**
Besides bundling networking, storage, compute and virtualization on modular appliances based on its own and Dell hardware, with software-defined management via the Ignite Cloud Controller, Cloudistics is adding an app store. The application marketplace, announced last month, will enable customers or partners to create custom OS or application templates; preconfigured images built by Cloudistics and ISVs and optimized for the hardware stack are also available for download. At press time, Splunk is the marquee offering, but Windows, Linux, Docker and Kubernetes images are also available.
Cloudistics channel chief Christopher Myhill says the appliances are ideal for customers disillusioned with public cloud and looking to bring some or all workloads back in-house, without sacrificing cloud’s architectural benefits. Whether the problem is higher-than-expected spending, insufficient bandwidth, concerns over data governance or just a desire to avoid lock-in with a multicloud strategy, Myhill says Cloudistics’ preconfigured hardware offers the benefits of public cloud, including scalability, with simplified management.
Cloudistics’ Chris Myhill
Now, while some companies are no doubt bringing some workloads back on premises, analysts agree: Public-cloud use is growing. IDC says worldwide spending on public-cloud services and infrastructure will show a 21.9 percent CAGR, with public cloud services spending totaling $277 billion in 2021. But there is a case for some applications to stay on site, and Cloudistics wants to be the private cloud platform of choice.
Speaking of, the company has special bundles for MSPs, including for those looking to create their own private clouds, either to sell capacity or to host their own digital-services offerings to generate MRR. MSPs or admins can create one clean image of a corporate desktop and deploy it many times, a concept familiar to IT pros — and critical to VDI, a major use case for hyperconverged architectures. There’s also a platform optimized for SMB, branch office and retail environments.
Channel Partners: Tell us what customers love about your product or service. What’s the secret selling sauce?
Christopher Myhill: Simply put, “It’s the application, stupid” — to paraphrase 1992 Clinton campaign strategist James Carville’s famous phrase, “The economy, stupid.”
A recent look at the growth of public-cloud adoption reveals that it’s the experience that is pulling users into this environment to simply run applications. Cloudistics delivers a premium private cloud experience. From our easy-to-use SaaS portal, Cloudistics Ignite Cloud Controller, customers can create application-specific hardware profiles to drive the best performance based on specific applications. They can also create their own or use preconfigured virtual server and application templates for point-and-click deployments. There’s no need for highly specialized resources or public-cloud architects. Finally, the Cloudistics competitive advantage lies in …
… addressing the No. 1 concern from IT leaders, the ability to react quickly to the business needs of their organizations.
CP: Describe your channel program — metal levels, heavy on certifications, open or selective, unique features?
CM: Our program is designed around the principles of simplicity and margins, and has two levels, premium and authorized, with waived requirements for premium for the first year and significant margin protection for both authorized and premium business partners. Our premium partners also enjoy competitive take-out bounties, rebate programs, deployment and support bundles, and access to our Partner Concierge.
Our stated corporate goal is to be “a channel-first sales organization,” and we therefore share targeting and lead-generation activities with our partners. Recently, we’ve adopted an exciting new approach, where we focus on regional events by identifying a strategic channel partner in a territory and amplify their spend and presence at a specific trade show to promote joint lead generation.
CP: Quick-hit answers: Percentage of sales through the channel, number of partners, average margin. Go.
CM: Nearly 100 percent. We launched the program in late November 2017 and have seen a massive surge. We have 67 active channel partners in North America, and another 12 in EMEA. Feedback from partners is that they are seeing between 27 percent and 45 percent margins on our solution.
CP: Who are your main competitors, and what makes your offering better?
CM: OpenStack and VMware are our main competitors at this time, though in different ways. The foundation of Cloudistics is to provide a premium experience with a private cloud. The very concept of Cloudistics was born out of the inability of these competitors to satisfy the needs of the company our founders built before this one. From these experiences the question emerged, How can we provide customers of any size the “experience” of the public cloud, but with the performance, price and control that customers seek behind their own firewalls? The answer became Cloud-Logistics or Cloudistics!
Our founding story is a great one, which you can watch right here.
CP: How do you think your technology portfolio will change in the next three years?
CM: We believe that “hybrid cloud” is not just a buzzword, but will be the future for most companies. As the environment evolves, we will offer support for meshed clouds, and multicloud support will be incorporated into our ease-of-use design. Another area of growth for us is in the number and diversity of applications in our Cloudistics marketplace. Those customers that are early adopters and innovative thinkers drove our road map on which applications make the most sense to incorporate in our Cloudistics Application Marketplace. Now those digital transformers are coming back and asking us to include new applications because they see the simplicity in deploying applications and how this enables their IT shops to …
… better respond to the demands of the businesses they serve. You should expect to see the number and diversity of software titles in our applications marketplace continue to grow and evolve.
Lastly, our analytics, visualization, backup and DR applications will grow over the coming months and quarters.
CP: How do you expect your channel strategy to evolve over that time frame?
CM: Our key focus won’t change and will remain simplicity and margin optimization. We have also slowed down somewhat on the active recruitment of broader channel partners. We have plenty of demand that needs satisfying from innovative partners that are looking to focus on applications and the end-to-end value they can deliver to their clients.
CP: What didn’t we ask that partners should know?
CM: Who are we seeing as early adopters? Answer: frustrated customers. Necessity is the mother of invention, and Cloudistics was born of necessity. Customers who are frustrated with the shortcomings of the public cloud are lining up for the relief that Cloudistics provides.
IDC says that 82.8 percent of respondents to its AWS IaaS migration survey had moved compute and/or storage services out of AWS in the last 12 months; most brought the workloads back in-house. That’s a lot of frustrated customers. Now, we can argue about what the right percentage is, but I can tell you from direct customer feedback that people are tired of and frustrated by their dealings with AWS.
Among our key targets are potential customers that we refer to as “cloud repatriators.” Don’t get me wrong, there will always be a need for public cloud for some workloads. But not all workloads belong in the public cloud, and we are seeing this “optimization” pendulum swing back to other alternatives. So, what if I could offer you a similar experience at a lower TCO, which you get to keep behind your own firewall? That simple question is driving a significant amount of our sales pipeline these days. I will end with what we call our “Founder’s Guarantee.” If you are not satisfied with the claims I’ve made above and we can’t provide your clients a 3X return on investment, we will take it back.
Finally, something else that is truly different about us, and which the channel should know about, is our focus on the Cloudistics Applications Marketplace, which is like an Apple “App Store” for the enterprise. We have demonstrated how we can deploy a Splunk instance in less than 10 minutes from our marketplace and ready it for data ingest. Partners that specialize in Splunk are seeing how Cloudistics can simplify the deployment of the application layers and allow more time, energy and profitability to be extracted out of the consulting aspects. These partners are able to help deliver tangible benefits to the lines of business and make the IT teams look like heroes.
We certainly don’t aim to preclude anyone from joining the Cloudistics family, but we are seeing channel partners with application-centric specialization flock to include our Premium Experience Private Cloud into their capabilities.
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