As UK-based cloud start-up OnApp celebrated winning a $20 million (£12.6m) boost in venture funding this week, its CEO and founder Ditlev BredaHl opened his heart to ChannelBiz about the pain of trying to find a decent partner.
OnApp provides cloud services for over 500 clients in 39 countries. Its success in the US, Asia-Pacific and Latin American markets, where it makes over 90 percent of its revenue, impressed hard-nosed US investors to back it with $20 million in Series A and B funding. Founder Bredhal has invented OnApp Marketplace, a way to pool all the unused capacity of data centres around the globe and give the owners a rental income. UK customers include Peer1 Hosting.
The flagship product, OnApp Cloud, has been described by one data centre owner as a “no brainer” as it gives the client everything they need to build a fully featured cloud hosting service in days. Another product OnApp CDN (Content Delivery Network) optimises website performance, while OnApp Storage aggregates the capacity of commodity physical disks into a virtual SAN.
The vendor has impressed analysts, with Gartner rating OnApp and Flexiant as leaders in a potential $30 billion (£19bn) market opportunity.
In an exclusive interview with ChannelBiz, Bredahl confessed he still faces some challenges. “Despite all this, I still find it very hard to find partners,” said Bredahl, “but we need them to grow.”
Bredahl said he is tiring of the exhibition scene and looking for something more tangible. “You can spend a fortune at the events and come away with very little. We did 21 events in 2011 – this year we’re only going to do five.”
The problem, he said, is that creating an official channel programme is very hard to pull off, although few vendors will admit this.
“The strategy for the moment will be to create four or five major partners and really spoil them,” said Bredahl.
Meanwhile, he has not given up hope entirely of finding a partner on the events scene. “I might go to World Hosting Day in Germany,” he said, “they like a few beers there.”
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Comment from George Knox, CEO at Flexiant
A partner programme doesn't happen overnight. Instead, it is a part of the business strategy that needs time to develop. And you need to keep your partner strategy in mind through product and market development as well as during rounds of funding. To scale a business globally, partners are key and $20million is only a drop in the ocean when you are trying to achieve an international customer base without a clear partner strategy.
In any industry, trying to find the right partners can be a challenge. Of
course there are many type of partners including pure technology partners and distribution partners and resellers. It is easy to find partners. What is difficult is to find good partners. The focal point on all partner activities should be 'how does this help us serve our chosen market and customers better'. Even with dedicated partner resources and high levels of due diligence there is no getting away from the reality of having to kiss quite a few frogs on the journey before the real princes emerge. The OnApp experience of trying to find efficient routes to market is a familiar story to most young technology companies.
At Flexiant, in 2012, we invested in multiple routes to market and
dedicated partner management and this has had an immediate impact on all areas of our business.
To Ditlev's view on events, there are now more cloud industry events than it makes sense to attend and therefore focus is essential. This year's
Cloud Expo Europe is the key event for any business trying to work with
cloud service providers. It is a prime example of an event where attending and offering expertise can help set a business like Flexiant or OnApp apart.
While Flexiant do invest in event and other marketing activities it is
encouraging that the growth in our order intake throughout 2012 was
predominantly as a result of our growing reputation for innovation and
mature and reliable software. In the end creating evangelical customers is the best marketing asset available.