Cloud Vendor Egenera Says It's Seeing Channel Growth for White-Label Managed Offering

It’s been more than a year since cloud management software developer Egenera launched a wholesale cloud service. But its channel growth has shifted into a higher gear in recent months, with a number of new resellers and global distributors looking to break free of the hyper-scale rat race.

CEO Pete Manca told CRN the Boxborough, Mass.-based company’s primary focus in 2016 has been expanding its channel. In the latest win on that front, Egenera this week landed CloudRivo as a distributor, introducing its Xterity managed cloud for the first time into the rapidly expanding Canadian market.

Much of the channel expansion is coming from two sources: partners who are disillusioned reselling commodity cloud services, and those just entering the managed cloud services market who’d like a more personalized relationship with their provider.

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’Some of the partners we signed had chosen a different cloud partner and weren’t happy with them and came to us as a new solution,’ Manca said. ’Some hadn’t gotten into the cloud game yet.’

As hyper-scale cloud providers increasingly consolidate the market, there’s a large degree of uncertainty in the channel as to the role smaller operators will fill in the hosting landscape, and the benefits of partnering with them.

Egenera’s North American partners tend to be smaller managed services providers, often with regional or vertical specialties, Manca said. For those companies, reselling a wholesale cloud like Xterity -- one with no public pricing model that can be white-labeled -- offers bigger margins than partnering with Amazon Web Services or Microsoft Azure.

Some Egenera partners that are wrapping services and bundling their self-branded offerings built on Xterity are seeing whopping 50 percent margins, Manca told CRN.

That’s the main reason Egenera’s channel has grown, mostly in the last few months, to more than 150 partners and a handful of large distributors around the world, he said.

At the same time, it's partner productivity that counts.

’For us, the channel business is really a numbers game,’ Manca said. ’The more resellers, more distributors we’re able to sign up, the more likely we are to get productive ones out of that, and get revenue.’

The company is seeing roughly a 30 to 40 percent success rate as far as signed partners that actually engage in selling the service.

Egenera’s recent success in building its channel should be seen as evidence that the big vendors will never push the niche operators out of the market.

’There’s always room for players that excel in special areas,’ Manca said. ’The big guys will never do the wholesale model that we do.’

They also won’t be as nimble in moving into smaller, underserved parts of the world, he added.

One Egenera partner that has started reselling a white-labeled version of the Xterity cloud, Sudbury, Mass.-based ScerIS, chose the provider because of a shared focus on highly attentive customer service, and for the flexibility and scalability the product offered, said John Nelson Jr, the managed services provider's senior vice president of operations.

ScerIS considered many providers before selecting the Xterity platform as the infrastructure backbone for its own cloud products, he said.

"ScerIS takes pride in providing incredible services to our clients, always going the extra mile," Nelson told CRN via email. "Egenera has the same approach which gives me great comfort that we are in good hands and our clients are in good hands."