SMB software specialist GFI Software has launched its first cloud offering which will allow channel partners to migrate on-premise GFI customers to a cloud-based with a recurring revenue model.
According to CEO Walter Scott, the new GFI cloud has been built from scratch over the last 18 months. The design took the top 20 most-used features from GFI’s core products, and built them into a scalable platform able to manage hundreds of thousands of users and millions of devices.
In common with the rest of its portfolio, GFI cloud will be sold through the channel but as a company first, it will also be available direct from the vendor. However, Scott counters that the “channel will be compensated every step of the way,” pointing out that partners that sell its cloud version will get the same margin as boxed products, while the recurring revenue is more than currently what’s earned from the annual maintenance renewal rebates.
Customers will be billed by GFI, and although in theory they could even buy direct, there would be no commercial advantage according to the CEO. GFI will not be stepping on channel partner’s toes by offering the extended support and professional services that the channel can offer.
Scott maintains: “Greed is good, but pigs get slaughtered. When I look at the software business…it’s a 95 percent gross margin business…If somebody is creating business for you and you’re worried about giving them 30 percent off the top of with a 95 percent gross margin, then you’re a pig!”
Even if partners simply refer a customer, GFI has a mechanism so that partners will be compensated in the same way as selling the licence key themselves for the duration of the contract. Scott stresses: “While I’m CEO,” the company will not cut out its channel in any way.
Initially, GFI Cloud will include its VIPRE anti-malware and Network Server Monitor. By the end of the year, GFI will add its LanGuard technology to automate software patching and vulnerability assessment via the same centralised web portal.
Scott believes that its platform has a number of significant advantages over rivals such as Kaseya that are also heading into the cloud. The CEO believes its focus on the SMB, indirect model and 25,000 strong reseller community are key compared to the “aggressive direct sales” approach of Kaseya. “We also own the underlying technologies,” he comments. “We are not 'OEMing' Acronis, StorageCraft or any other technologies – we control the entire portfolio of IP.”
GFI will still develop its existing portfolio with core features moving into its cloud version in tandem. “We are being very channel aware here…our traditional channel discount model is there, designed with two tier in mind. The infrastructure market has to move to this type of architecture, but we can’t force customers to update products once a quarter. Cloud allows [GFI] to integrate it, it’s cheaper to support, and the velocity of improvement means I can roll out new features five times faster than I could with an on premise product,” adds Scott.
