SimpliVity Launches Cloud Service Provider Program, Aims To Limit Financial Risk For Partners

SimpliVity, a startup in the up-and-coming hyper-converged infrastructure market, unveiled a program Tuesday that aims to get more service providers using its hyper-converged software.

With its new PartnerAdvantage Cloud Service Provider program, SimpliVity said it has put together a consumption-based pricing model with an unnamed finance partner that makes the service provider liable for only 50 percent of total capacity over a three-year contract period.

SimpliVity said it plans to expand the offering later this year to enterprises that want to use its technology in their internal IT infrastructure, and that the channel will participate in those sales.

"A lot of our VARs are becoming service providers," SimpliVity CEO Doron Kempel told CRN editors in an exclusive interview at the company's Westborough, Mass., headquarters. "We have a lot of VAR partners that now have clouds." He said the startup has shipped more than 4,000 systems so far and has a customer list that already includes a number of service providers.

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SimpliVity said it has developed a program that removes financial barriers for cloud service providers.

First, SimpliVity said it will work with service provider customers to come up with an estimate for how much infrastructure they'll need. Then, SimpliVity calculates a price per unit that factors in hardware, software and support over a three-year period, said Jesse St. Laurent, vice president of product strategy.

SimpliVity and its finance partner keep track of infrastructure usage, and service providers are only liable for 50 percent of the total capacity of their infrastructure over the three-year period, according to St. Laurent. This means if consumption of the infrastructure drops, the service provider isn't on the hook for unused capacity.

"This takes the risk out of becoming a service provider, and you will see us rolling it out to large enterprises too," St. Laurent said.

Stephen Oles, managing partner and director of technology sales at Cordicate, a Philadelphia-based SimpliVity partner, said the startup's low total cost of ownership is popular within his own customer base.

"When customers see a 3X TCO reduction with SimpliVity versus doing things the traditional way, they're eager to refer us to others," Oles said. "I haven't seen this much referral business since VMware in the 2005-2006 time frame."

One big draw for hyper-converged infrastructure is that organizations can simply add more servers as they scale and don't have to estimate future consumption needs as they would with converged infrastructure. SimpliVity is taking that a step further with the new pricing model, said George Hope, vice president of global channels.

"We're taking an already strong value proposition and adding more secret sauce to make it even more compelling," Hope told CRN.

SimpliVity is currently running in small to midsize service providers around the world, which use its technology to deliver services to their own customers, said Hope. Large enterprises that are looking to become service providers to their own end users can also use SimpliVity in private clouds, he said.

"If you're a large enterprise and want to take advantage of the offering, you could use SimpliVity as your internal infrastructure," Hope said. "They can charge the business units, and become internal service providers leveraging service provider capabilities. We offer that to them so they can level out costs."