ComputeNext sees cloud services marketplace close to going viral

The startup’s cloud services integrates cloud service providers looking to sell capacity with customers who license their platform to provide their own branded services. Channel partners like MSPs are the third part of the equation, but to date have been the slowest to come on board.

Dan Moore

, director of channel development at

CHICAGO – Bellevue WA-based ComputeNext acknowledges that their business – a cloud services brokerage in which they provide the back end glue between cloud service providers and customers who license their platform to consume those services – started out at the bleeding edge of a nascent cloud market. In some ways their ongoing efforts to recruit a channel for this business is still bleeding edge, and a little early for broad adoption. But the company, which has been at ’s 15 event this week telling their story, is confident that they are riding the wave of an inexorable trend, where the floodgates are about to burst.

The startup began putting together their cloud marketplace back in 2011.

“It is a single pane of glass, a platform we have architected with cloud services vendors all over the world, to manage virtual resources,” said Dan Moore, director of channel development at ComputeNext.

“For cloud services companies who don’t have the visibility of Amazon, we give them visibility and a face to the rest of the world,” Moore said. “We open up their saleability. They may sell direct, they may sell channel, but they don’t have the budget or resources to market on a global scale. They compete against Amazon but only in their own regions.”

Moore acknowledged that while individually none of these companies have close to Amazon’s resources, they still have plenty of scalability to handle requests from buyers.

“They have the scalability,” he said. “Companies like SingleHop are not Amazon, but they still scale pretty well, and they will often give a better price to get the deal.”

While these cloud services providers who contribute to ComputeNext’s catalogue are one end of their value chain, the other end are the consumers, like data centre companies and distributors, who acquire the cloud services for their own offerings.

“The Zones cloud marketplace which is launching this month, all the plumbing is us,” Moore said. That plumbing, which the company spent its first several years building, lets buyers purchase resources from any provider in their catalogue, then procure, provision and pay for them. Vonage was an early customer, and an easy sale, when it was pointed out to them that their main competitors all had their own cloud capabilities to offer services, while they did not.

“For companies who want a cloud marketplace with their brand, we provide a low friction sales environment,” Moore said. “Instead of owning it all like Amazon, we broker it. We are the ‘born in the cloud’ glue in the middle.”

As another example of how they work, Moore cited the example of a Silicon Valley email company who decided they needed to get into Canada.

“They came to us and said they needed a physical location there, and at the other end, we had Canadian companies contacting us with data centre resources, looking for points of sale to tie into.”

Moore said they sell their brokerage services in two ways. One is a direct consumption model, in which the customers are a variety of IT leaders and beta testers who need the services for something, and who typically pay with a credit card. The second model, which he said they are doing more of today, is platform .

“The licensing gets our whole kitchen sink in the hands of people,” he said.

The third group in ComputeNext’s model, and the one that at this stage is still the most imperfectly formed, is their channel partners, and getting the message out to these groups is a key reason the company is at ChannelCon.

“Typical channel partners would be MSPs who want to host their own environment, companies who want to scale beyond their own footprint, IT outsourcers, and VARs who want to offer private label services,” Moore said.

The partners however, have been a bigger challenge to attract than the core suppliers and consumers of the brokerage services.

“There has been a slow adoption curve for partners,” Moore admitted. “Our model’s value has become more understood, but adoption of cloud is still taking time, and we can’t force people to adopt.

Today, ComputeNet has over 20 channel partners worldwide.

“The channel is growing organically, but we are just a little bit ahead of the curve in the market right now with them,” Moore said. “We are in the right place, but a little before our time, and the channel is the best example of that dichotomy. Platform licensing demand is here now, and channel demand will follow.”

In Canada, ComputeNext has three providers at the moment, and a presence in five major cities.

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