Toronto-based Tenzing Managed IT Services plans a first foray into the public cloud as a result of a new partnership with OpSource.
Both companies are focused on hosting services for Software-as-a-Service and e-commerce companies, and the partnership is intended to help Tenzing move the data centre world into the true public cloud market. Brian Shepard, founder and CEO of Tenzing, said the move towards the cloud is a necessary one for the market the company serves.
“Our clients that start out relatively small but go on to become our biggest clients,” Shepard said. “For e-commerce and SaaS companies, the ability to scale up around certain periods of the year when they need more resources is huge.”
In the first phase of the partnership, Tenzing will market public cloud services to its customers from OpSource and partners in Europe and Asia, a potential opportunity for solution providers serving multinational customers. But it’s later this year that things get really interesting, as the company will launch its own Tenzing Everest Cloud, a Canada-based public cloud.
Everest is scheduled to go live some time during the third quarter of this year, and will be initially configured at a level to “support hundreds of clients,” Shepard said, with all the typical cloud options for pay-as-you-go, and scale up and scale down as needed.
“OpSource has done things in a big way – they’ve built for scale, they’ve dealt with scale, and they’re sharing their best practices with us,” he said.
The public cloud across OpSource’s partners are available to all parties involved, allowing each member to sell capacity in the others’ data centres in the same way that mobile telcos swap minutes for roaming, said Jon Beck, senior vice president of alliances and channels at OpSource. Because of that, Tenzing is forecasting that about 35 per cent of its revenues going forward will come from other partners’ clients running on its cloud. The remaining 65 per cent will come from Canada-based companies, with about 20 per cent of that coming from the company’s partners. Shepard sees the channel as an increasingly-important part of the business – to that end, the company earlier this year launched its first formal partner program.
Shepard said that with Everest, Tenzing will be able to “offer aggressive reseller rates” and ramp partners up quickly towards the cloud. Cloud hosting is a rapidly growing opportunity, with estimates of 60 per cent CAGR over the next few years, and some large players growing as much as 100 per cent year-over-year.
“What other market is growing at that rate?” asked Shepard. “It’s an incredible opportunity for VARs who are selling hardware, where the growth is in the single digits.”
Even based on commissions, the margins for partners on selling public cloud are “stronger than selling most hardware on a dollar-for-dollar basis,” Shepard asserted.
Beck said at this point, solution providers should be looking at public cloud options “as a defense against Amazon.”
“A lot VARs are fearful of the cloud due to concerns about cannibalization of on-prem or enterprise systems,” Beck said. “Our approach is to use the cloud to find ways to sell more enterprise systems. The cloud is on every c-level agenda, and it allows partners to be the one who’s the trusted advisor for the cloud, and build that annuity stream.”
