Virtustream to dilute direct sales with channel push

Cloud provider Virtustream is turning to the channel to spearhead its next growth phase in the mid-market.

Cloud provider Virtustream is turning to the channel to spearhead its next growth phase in the mid-market.

The privately held firm, which launched as a virtualisation specialist a decade ago, has acquired numerous businesses and developed data centres on both sides of the Atlantic, backed up with investment from Intel and Columbia Capital.

The firm has a professional services division, an application services arm and a cloud practice, which is underpinned by xStream, an enterprise hybrid computing platform that provides private or multi-tenanted clouds, managed or unmanaged and on or off premise. It also resells kit from vendors including IBM and Compellent.

Former IBM channel head Andy Rigby, now EMEA GM at Virtustream, told MicroScope that its growth expectations could only be realised by working with partners.

"Right now we have a direct sales model but in the next six months this will be dramatically enhanced with 65% to 70% of our revenues ultimately being generated by partners," he predicted.

He said it would target ISVs, SaaS and IaaS providers and traditional resellers.
Much has been made of the terminal threat that the cloud poses to classic dealers and Rigby also argued that those making money from pure hardware sales with some services wrap will be marginalised over time.

"Customers are moving from a cap-ex to an op-ex based SLA environment where infrastructures are virtualised and moving toward the cloud and IT is outsourced to a managed service provider. Partners in that space will be the ones that will be the most successful," he said.

Resellers can white label its cloud services which includes IT On Demand, private clouds on or off premise, an enterprise cloud and virtualisation infrastructure solutions.

Some in the UK channel may see channel conflict in Virtustream's reselling operation but Rigby said it represented less than 10% of revenues locally, "It is not our core business", he insisted.

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