XChange 2012: Cloud Computing Service Providers Posting Big Sales Gains

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Ira Bell, the COO of Nimbo, a New York City company built from the ground up to tackle the cloud computing services market opportunity, said his company's sales have skyrocketed from zero to $6 million in only two years. And he expects the company to double again this year, hitting $12 million.

Nimbo, which has bet heavily on Microsoft's Windows Azure cloud platform, just closed a deal with a major New York hospital to build a hybrid cloud/on premise solution with 75,000 seats.

[Related: XChange: VARs Share Recurring Revenue Model Success Stories]

Nimbo is one of dozens of upstart cloud computing service providers attending the XChange Solution Provider 2012 Conference in Los Angeles this week seeing astronomical sales growth by embracing the cloud computing services model.

UBM Channel CEO Robert Faletra, who kicked off the Xchange Solution Provider conference on Sunday night, calls the new cloud computing services players "transformative" companies because they derive most of their sales providing off premise cloud services in a recurring revenue, subscription model.

"You are becoming service providers," he told the hundreds of attendees traditionally referred to as solution providers or many years ago as VARs (Value Added Resellers) or even just resellers. "Recurring revenue is a wonderful thing. When you see the biggest buildings in any city built by people with recurring revenue it makes you think that is not a bad model. It sure is a lot easier to walk into January with 60-70 percent of your business already booked."

Fuse Networks, a three-year-old, Seattle, Wash. cloud computing services provider, posted a 51 percent increase in sales in 2011 to $2.3 million with 90 percent recurring revenue. The company is selling a fully managed service for hosted telephony, hosted application and a virtual desktop, says Mark Brown, a principal for Fuse.

"We literally fork lift our customer's servers and throw away their phone system and give them a whole new office in the cloud," he says.

Fuse is dramatically reducing the cost of IT with its cloud computing services model, said Brown. Fuse slashed one customers IT spend by more than half, he said, with the customer moving from budgeting 2 percent of revenue on IT to .75 percent. At the same time, the customer's IT trouble tickets were reduced significantly, he said. Brown's advice for fellow solution providers: start a new business.

Next: Leaving Break/Fix IT to Join The Cloud Computing Services Revolution

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