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Egnyte wants to see more commitment from the UK

Vineet Jain, founder and CEO of Egnyte says it’s hard to get UK resellers to commit to the US cloud model – but are there historical reasons for this caution?

We meet Vineet Jain founder of the Egnyte service, a sort of Box and Dropbox for adults, somewhere in Cyberspace. There’s a dog barking in the background. The conversation turns to long Friday afternoon sessions in the pub and going home early when he worked in IT Beeston, Nottingham. That was a bygone age and Jain soon tired of the laid back lifestyle and headed to Silicon Valley, where he’s been for decades.

In 2008 Jain launched Egnyte in order to give companies the convenience of an online file server, so they could move files around easily and securely. He was so early to market with this invention that nobody described it as an “asser service” because the cloud circus hadn’t come to town yet. Consumers weren’t using low end versions like Box and Dropbox, because they didn’t exist yet.  

As ever with the fashion show that the modern IT industry has become, the sensible footwear on sale at Egnyte would be eventually over-shadowed by the outlandish antics of Box and Dropbox, which captured the imagination of the consumer and the endorsements of the analysts.

Meanwhile, Egnyte quietly built up a robust company with 14,000 customers including Ikea, Coach and Nasdaq. The fact that Nasdaq trusts Egnyte to secure its secrets might be worth more, in the long term, than a shower of cash from some excited venture capitalist spending someone else’s money.

The hype around Dropbox and Box has been good for Egnyte in the long run anyway, says Jain. Egnyte doesn’t compete at the low end, and the fact that consumers have adopted this system and use it at work has popularized the concept. Now, when enterprise security bosses want to secure all this ‘on demand file server’ action, they are likely to turn to standardize the company on Egnyte. Jain says seven times out of ten, Egnyte will win the business when big corporations decide to rationalize.

Most of Egnyte’s customers are in the US. However, with a total of $62 million in cash injections and much stronger financial foundations than its rivals, Egnyte is strongly positioned for a push into the UK.

The firm wants UK channel partners to sell its secure services into the UK corporations. but it has not been straightforward finding resellers here to take the technology out to market. 

“We’ve had a few unfruitful attempts to build a channel,” says Jain. The assumption was that if Egnyte went to distributors and VARs, and showed them the boxes and the continuing software service revenue streams, the partners would be desperate to get involved. That didn’t happen though. “We spectacularly underestimated the incomprehension,” he adds.

Though resellers could make more money from two years of continuous revenue streams, they all wanted the money up front. The days of making instant margins are gone but nobody in the UK seems to be willing to adopt the new model.

While Egnyte’s intentions may be honourable, it might take some effort to convert the channel from the culture of instant gratification. It’s understandable why they might want the money up front. Egnyte’s technology may well be in Gartner’s Magic Quadrant, but resellers need to be persuaded that they aren’t in the ‘tragic quadrant’. Now Egnyte has appointed UK channel guru Dee Jarvis to do exactly that. Let’s hope Jarvis proves to be a channel game changer.   


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