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The cloud has become so sticky, in fact, that it's creating a new paradigm called negative churn. Negative churn is a theory that solution providers and some SaaS and cloud vendors are experiencing 100 percent customer retention with no disconnections, while throughout the year new customers sign on and existing customers add new services and users.
Microsoft has also noted that its service providers and partners have reduced customer churn with cloud computing services offerings.
"During the past several years, Microsoft has heard from its service provider partners that they were experiencing significantly low churn rates among business customers using Microsoft Hosted Exchange, Microsoft Office Live Meeting and SharePoint when compared with those using basic POP or webmail services," the software giant said in a statement earlier this year.
In a study of 695 SMB executives and technology decision makers in the U.S. and Europe, Microsoft found that SMBs that use e-mail and other online communication and collaboration services change their providers half as often as those using basic POP or web mail.
"This dynamic presents service providers with an opportunity to combine their existing network service offerings with enterprise-class e-mail to better serve their customers and improve their bottom line."
Allen Falcon, CEO of Horizon Info Services, a Westborough, Mass.-based cloud VAR specializing in Google Apps, said his Google Apps retention rate is 99 percent year-to-year through September and the only real customer churn Horizon has experienced is when customers are acquired or shut down completely.
And because of that stickiness and the addition of new customers, Horizon continues to grow. Falcon said the company has grown 350 percent over two years and October 2010 was its best month ever.
"We have yet to have anyone leave Google Apps for another platform or in-house system," he said.
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