By Jeffrey Burt

A company with a strong presence in Israel and the rest of the Middle East is expanding its white-label cloud infrastructure service globally, looking to gain traction in a crowded market based on the strength of its 13 data centers in four regions around the world.

CaaB (Cloud as a Business) says it already owns about 40 percent of the domestic market in Israel – where it’s based – and has grown in other parts of the Middle East. Now the company is pushing into the larger global market and already has partners in the United States, Canada, England, France and Australia, according to Mor Mordchaev, CaaB’s partners channel director for global markets.

CaaB, which is part of the OMC Group, has more than 150 partners across the globe. The company gives MSPs, resellers and hosting firms access to its data centers in North America, Asia, Europe and Africa/Middle East, enabling them to offer cloud solutions to end customers without having to invest in their own infrastructure.

CaaB’s Mor Mordchaev

“Essentially what we do is we give them the ability to leverage our infrastructure, our technology, our capabilities and brand as their own company and sell those cloud services in their respective markets all around the world,” Mordchaev told Channel Futures.

Through CaaB, partners get access to flexible and scalable cloud services that they can use as the basis for their own cloud offerings or to complement the reseller programs they already have in place with such major public cloud providers like Amazon Web Services (AWS), Microsoft Azure and Google Cloud Platform, an important consideration at a time when enterprises increasingly are adopting multicloud strategies by leveraging more than one cloud provider.

White-label cloud service providers have been around for several years, with such names as Lume Technologies, NewCloud Networks, Awesome Cloud Services and Evolve IP. The top cloud players also let partners leverage their infrastructures to bring cloud services to end users.

Paul Teich, principal analyst with Liftr Cloud Insights, told Channel Partners that offering MSPs and other partners white-label cloud services is a “time-honored tradition,” even for larger vendors, noting that Chinese IT giant Huawei operates cloud services for a number of telecommunications companies. Channel companies need to get into the cloud given that’s where their customers are going and for many, the key is scale, Teich said.

Liftr Cloud Insight’s Paul Teich

“Operating costs decline asymptotically with scale, so at a certain point getting a little more margin out of purchasing and operating data centers at scale takes adding a lot of infrastructure,” he said. “White-label clouds get those additional points of operating margin and enable their customers to offer cloud services for competitive costs without those customers having to play the scale game. So, for smaller MSPs with no hope of competing on low costs with the big public clouds, white-labeled cloud enables them to offer competitive and perhaps differentiated cloud services without investing in cloud infrastructure and cloud IT operations.”

A decision an IT service company needs to make is whether it wants to …

… make “owning and operating a public cloud a core competency or do they have some other core competence that could be enhanced by also offering cloud services?” Teich said. “If it’s the latter, then white-label public cloud is like any other ingredient product. They can pass through costs to the customer while making a few points of margin. Why would you recreate the wheel at a less competitive price if you can buy wheels wholesale and use them to differentiate your product?”

VBS IT Services has been working with CaaB for almost a year, reselling their service to customers and migrating existing customers from on-premises environments to the cloud. The timing has been good for VBS because for many customers, their servers have reached the end of their life cycles, according to Miguel Ribeiro, president and senior IT consultant for the Toronto-based company.

“Prior to CaaB, we would propose on-premises servers,” Ribeiro told Channel Partners. “Or if the client requested, we would propose Microsoft Azure cloud. The challenge with both options was the cost. Although we would offer a leasing option when we proposed on-premises, the cost of the server was high, both from an acquisition as well as lease option.”

Azure was a challenge for customers because its utility pricing can fluctuate based on usage and customers felt uneasy about the pricing, he said. Customers preferred a fixed price, so VBS found it difficult selling new servers — and customers were holding on to their existing servers longer.

“Now that we have a cloud-server option with fixed pricing and it’s hosted in Canada, we can sell servers again,” Ribeiro said. “Keeping technology recent and up to date is not just beneficial for us as the provider, but more so for the client.”

For end customers, the host of benefits range from lower server-implementation costs, fast and easy setup, up-to-date operating systems, reliability, built-in security and high availability, he said. Partners get an environment that is easy to sell and set up, a reliable solution with flexible resource configurations to meet customer needs, growing profits and recurring monthly revenue.

CaaB, which has been offering cloud services since 2007, says MSPs can get fast ROI, see profit margins grow and, on average, earn three times the industry standard with CaaB’s residual revenue-sharing model. End users can see a monthly cost reduction of up to 45 percent over larger cloud suppliers, the company said.

CaaB’s cloud services are based on VMware’s hypervisor, virtual dedicated servers that can run Windows or Linux, container management via Kubernetes, S3 archive storage, its own web application firewall and content-delivery network capabilities. The servers are designed to be set up in less than a minute, with instant scaling.

Mordchaev said his company has some advantages over other white-label cloud providers, including having a large number of data centers around the world.

“We also have some places that [are] unique to where some of our competition isn’t, especially in the Middle East,” he said, adding that CaaB is “about to launch a data center in Cambodia, which would really separate us from some of the larger ones.”