ARN

​Kloud cuts loose from channel pack to challenge traditional resellers

Nicki Bowers demonstrates the changing approach to cloud transformation at the 2016 Microsoft Worldwide Partner Conference​ in Toronto.
Kloud takes out the Excellence in Cloud Productivity Award during the 2015 Microsoft Australia Partner Awards

Kloud takes out the Excellence in Cloud Productivity Award during the 2015 Microsoft Australia Partner Awards

Melbourne-based technology provider, Kloud, is cutting loose from the channel pack, challenging traditional resellers as a born-in-the-cloud Microsoft Azure partner.

Founded over a glass of wine in 2010, the growing company is filling a gap vacated by time-honoured channel players of the past, moving organisations to the cloud across Australia.

“We looked at the market in Australia and realised that traditional System Integrators were reluctant to transform their organisations,” Kloud co-founder and Managing Director, Nicki Bowers, said.

“Our model is based around helping businesses move from on-premise to the cloud and through this approach we challenge every single traditional SI in the market.”

Since starting at the top end of town, Kloud has picked up a string of large leading customers, including over half of the Australian Stock Exchange (ASX).

“There’s a slow cloud shift happening in the market but the big guys still don’t get it,” observed Bowers, when speaking to ARN on the ground at the 2016 Microsoft Worldwide Partner Conference in Toronto.

“They are not agile enough to respond to customer needs whereas we can walk in, meet a customer and have a work order signed within two meetings, which could represent a $500,000 project.”

In squaring up to the typically product-heavy, infrastructure layer focused resellers, Kloud is carving out opportunities across a range of sectors and customer bases, outlining cloud strategy and roadmaps for large brands such as Coles, Queensland Government, Deakin University Australia and SEEK.

Yet while born-in-the-cloud implies a refreshing sense of freedom and flexibility, in being recently acquired by Telstra for $40 million, such privilege appeared threatened.

“Telstra don’t want us to be sucked into their processes because they need us to keep innovating as a standalone business,” Bowers explained. “We work closely together and are happy where we landed in terms of a buyer.”

Despite appearing contradictory, Bowers said the company could have sold for more money to different buyers, but made the conscious decision to join forces with Australia’s largest telco instead.

Nicki Bowers - co-founder and Managing Director, Kloud
Nicki Bowers - co-founder and Managing Director, Kloud

“For an organisation such as Kloud, it’s all about our people and culture is key,” Bowers added.

“We needed to ensure our business had a solid future ahead and even though we operate separately, our pipeline is increasing and we’re seeing a massive uptake across the market.”

In short, Kloud remains close enough to the Telstra tent to access the broader things the telco providers, yet far enough away to zip it back up to ensure an agile approach to business.

Partner to partner

With the ink barely dry on the Kloud acquisition, Telstra also recently acquired fellow Microsoft partner Readify, tapping into its capabilities around enterprise cloud applications, big data and IoT solutions.

As reported by ARN, Telstra said its latest buy will provide an additional platform to drive digital transformation for its enterprise customers in domestic and global markets, while also complementing its recent purchase of Kloud.

“We look forward to working closely with Readify to drive greater collaboration across the business and help our customers move to the cloud,” Bowers added.

Representing the new mentality of the new partner type in the channel, Bowers said Kloud is no stranger to collaboration across the industry, demonstrating a forward-thinking approach to meeting changing customer demands.

“We always work with partners because we don’t do everything,” Bowers explained. “We do what we do incredibly well but if we can’t meet the needs of the customer then we will insert relevant partners into the mix.

“Now Kloud, Readify and Telstra are all part of one business, we can work more closely together, but collaboration has always been central to our success.”

Compared to traditional VARs however, Bowers observation is simple; “they don’t want to know.”

“Our mindset is driven by a customer first mentality because if we do the right thing by the customer, they’ll never leave us,” Bowers explained.

Page Break

"We want long-term relationships with our customers and we see no value in winning a piece of work then getting the hell out of there.

“This approach drives a different process and we’re now turning down more work than we’re saying yes to because we want to do the right thing.”

In taking out the Enterprise Mobility gong during the Microsoft Worldwide Partner of the Year awards this year, against the tech giant's global channel community, Kloud assesses the marketplace when seeking external input, seeking cultural fits for both partners and customers.

“If they cut our lunch and provide a better service than us then the customer should take it,” admitted Bowers, reflecting an seismic shift in thinking among channel partners.

“But if we’re constantly supporting the customer they have no reason to look elsewhere.”

Lock-in or lock-out?

Consequently, Bowers challenges customers to move away from age-old methods of doing business, advising them against signing three-year contracts in favour of monthly billing cycles and renewals.

“If we’re delivering a service that is of value, and I go back to my point again, then they simply won’t want to leave us,” she explained.

“We find that by giving the customer freedom and starting off small, they begin to add more managed services and grow as they require more which has proved a successful approach.”

In challenging the traditional ecosystem around how they win, deliver and close business, Bowers believes the market is ripe for future growth, alluding to the untapped potential of cloud migration in the workplace.

“We butt heads against Accenture a lot who are untraditional SIs, but we’re not butting heads all the time and that’s key,” Bowers added. “This shows that there’s still enough work in the market for other partners to come in and make money.

“If I was competing at every single turn then I’d have to change my entire business model.”

With employees across Australia and Manila, Kloud specialises in assisting corporate and government customers in adopting cloud technologies, providing consulting capabilities through its professional and managed services.

“Because of this approach customers are now turning to traditional partners and asking for the same type of service and that’s challenging the channel,” Microsoft General Manager of Small, Medium Business and Partners Asia Pacific, Valerie Beaulieu, added.

“If the rest of the ecosystem fails to transform, they will become irrelevant.”

Delving deeper, Kloud is also rebelling when fighting for deals, moving away from constantly responding to tenders in favour of examining the bigger picture at play.

“We’re challenging how our customers go to tender,” Bowers explained. “VARs will always offer a fixed price but with cloud, customers don’t always know what they need, which is why we focus on providing time and materials to understand the requirements first.”

Looking ahead

With over 180 employees operating across three states in Australia, Kloud has brought on board 20 new customers during the past 12 months, working with customers at different levels of cloud maturity.

“It’s a long-term play either way,” Bowers added.

Looking ahead, Bowers said plans are in place to increase the company’s managed services business and head count as it branches outside of Australia, targeting Asia under the Telstra banner.

“We won’t grow it to kill it but our capabilities are expanding rapidly,” Bowers added. “In terms of what we can achieve in cloud, I don’t think we’ve even scratched the surface yet.”

James Henderson is attending 2016 Microsoft Worldwide Partner Conference in Toronto as a guest of Microsoft.