Faction, one of the premier VMware Cloud On AWS managed service providers and a multi-cloud market leader, has closed a new $18 million round of funding that includes Dell Technologies Capital as part of a plan to expand its global partner sales effort.
Faction founder and CEO Luke Norris said the funding is "validation" of the company's VMware Cloud on AWS managed services strategy, its Layer 2 patented multicloud networking technology and its partner sales strategy.
"This gives VARs a unique value proposition around the massive wave of adoption coming on VMware Cloud on AWS," said Norris in an interview with CRN.
The funding also opens the door for Faction to target Dell Technologies partners, said Norris. "The additional access we can get to the Dell channels is tremendous for us," he said. "We see VMware Cloud on AWS as the extreme tipping point for the enterprise to fully adopt cloud."
The Faction VMware Cloud on AWS managed service provides a unqiue opportunity for partners to sell on premise storage that can be moved into VMware Cloud on AWS. In addition, Faction's MultiCloud platform as a service offering allows partners to provide a multicloud platform as a service aimed at directly addressing customer concerns around cloud lock-in.
Global Technology Resources Inc. (GTRI), a national cloud consultant and systems integrator, No. 151 on the CRN SP500, already has a robust hybrid cloud sales pipeline as a result of the "unique" Faction technology and the ability to save customers millions of dollar with a both a VMware Cloud on AWS and multicloud service offering, said GTRI co-founder and CEO Greg Byles.
"For GTRI, the impact of this technology is going to be tens of millions of dollars for our hybrid IT business going forward," said Byles. "We spend a lot of time on innovative technology and how we can scale our business by bringing differentiated technologies to our customers. This is one of the big bets we are making. It's a big play when you are talking to customers about saving millions of dollars. Faction has a unique differentiator with a time to market advantage. There is no doubt about that. They are definitely out in front of the hybrid cloud market opportunity. We see this as a game changer."
The Faction technology gives customers "freedom' of choice with either VMware Cloud on AWS or a hybrid IT multicloud service, said Byles. "There is a massive market for VMware Cloud on AWS, but this also gives customers who don't want to go all in with VMware Cloud On AWS a choice," said Byles. "This gives customers options if they are concerned about cloud lock in. The savings is coming from our ability to right size the environment with the right provider. It is not all or nothing. We are looking at each workload and designing and scaling a multicloud solution for our customers."
Byles is also impressed by Faction's sold channel program which includes a lucrative white label offering and the ability for partners to tightly wrap their own managed services with the Faction managed cloud services. "The partner program is very mature and solid," he said. "It allows us to make extensive margin. It allow us to manage hybrid environments. We can add in our managed services so we can give the customers a single pane of glass with whatever analytics they want."
Aaron Shelley, the hybrid cloud practice leader at GTRI, said he expects the Faction technology to overcome the "paralysis by analysis" cloud lock in fear that was preventing many enterprise customers from moving to cloud. "With Faction we can set up a big giant data repository that can be used in multiple clouds," he said. "Customers can use any or all clouds with no concern about their data being held hostage with egress fees."
Shelley compared the Faction multicloud opportunity to the massive shift from centralized mainframe to client server virtualization computing that fueled huge growth and profits for solution providers. "It's that big a shift," he said. "This is all around data and cloud. We are going from isolated buckets to actually realizing the features and capabilities around cloud we have been all trying to get to."
The $18 million Series B financing for Faction was led by new investor River Cities Capital Funds. Besides Dell Technologies Capital it also includes existing investors Sweetwater Capital, Meritage Funds and Charterhouse Strategic Partners.
Faction plans to use the cash to expand its managed services internationally to support the global rollout of VMware Cloud on AWS, said Norris. "Our ability to take this worldwide and to continue to expand in America is significant," he said.
Faction, which does 90 percent of its sales through partners, will also use the funds to hire across all areas of the business including channel, managed and professional services, and engineering."We are very bullish on tying our unique technology and product set to enable the channel to sell VMware Cloud on AWS," he said.
That said, the beauty of the Faction VMware Cloud on AWS managed service is it immediately becomes multicloud attachable storage, said Norris." As customers want to expand past VMware Cloud on AWS that same storage can attach to Google, AWS, Azure, Oracle Cloud, you name it," he said. "With Faction, you get one storage mount point attached to multiple clouds simultaneously. This is a full multicloud platform."