RapidScale CEO: Microsoft, IBM, Amazon 'Don't Understand the Channel'

Edward Gately

Cloud provider RapidScale already has had a busy year with its acquisition of Vonage’s hosted infrastructure services, and more acquisitions and strategic hirings are on tap before year’s end.

On May 31, RapidScale completed its purchase of the employees of this Vonage business unit and the following services: IaaS, hosted exchange, virtual desktop, IT services, hosted firewall, back service and Microsoft Skype for Business.

RapidScale’s Randy Jeter

The acquisition further expands RapidScale’s footprint on the East Coast with the opening of an office in Tysons, Virginia, increasing its client base and revenue; and provides a managed cloud services offering to the Vonage customers being acquired.

RapidScale also hired Bob Buchanan, previously TierPoint’s vice president of channel sales, as its executive vice president of sales and marketing, charged with further accelerating the company’s market position as a provider of DaaS, DRaaS and IaaS offerings.

In a Q&A with Channel Partners, RapidScale CEO Randy Jeter talks about his company’s ambitious plans for continued growth and what it will mean for partners.

Channel Partners: What’s the status of integrating Vonage’s hosted infrastructure services into your business?

Randy Jeter: Right now we have tiger teams on the front and back end basically working on client retention, client satisfaction and what we call the client experience. So the first and foremost thing was making sure that we touched the clients, and then in addition to that we have, and are in the process of, starting to communicate with clients on a migration strategy onto our platform out of one of our facilities depending on where they’re located.

They didn’t really have a mature disaster recovery product set at Vonage and we do have that, so we’re finding a lot of uptick in clients wanting to add DRaaS, especially with WannaCry and some of the other things that happened. More people are getting connected to the DR side, so we have a very mature practice on that.

CP: Does the Vonage acquisition create new opportunities for RapidScale partners?

RJ: The partner community wants stability. The primary reason why our growth has been significant over the last 12-18 months is we’ve stabilized every aspect of the company and are providing a great partner and client experience. So that’s the most important factor — stability and safety with regard to who they bring their clients to.

The second is the innovative and solutions side of it. We’ve done a really good job of building a robust, managed, very hands-on approach to cloud, very different than an Amazon, Azure or SoftLayer in the sense that we have a cloud environment, we run our own platform, and then we take clients and we manage that, just like an MSP or a VAR would be delivering services. So when you look it … there [are] so many components that changed the business that the channel has been looking for in both us and in other companies, and we just happen to be one of the first ones to go attack it.

CP: RapidScale’s new executive vice president of sales and marketing will be responsible for leading the company’s national go-to-market and sales strategy. Are we going to see big changes in that area?

RJ: More channel. We believe in the channel. I grew up in the channel so everything we do is …

…channel-focused and channel-based. So the majority of what we’re doing in adding additional talent to different markets … it’s to tie into our partner community and to add value to our partner community.

I think we’re one of the rare companies that solely has a focus on the partner community. It’s building a repeatable model for the channel with regard to their ability to sell and feel comfortable about the company they’re selling and that the clients are going to be taken care of. We don’t foresee any changes outside of expanding the amount of channel leaders that we have in the field in different regions. We have six today and we expect to have within the next year upwards of 12, and that’s separate from engineering. So basically just doubling down on the channel leadership side of it, the channel management side of the house, and then the solutions engineer side of the house and client experience managers.

CP: Can you talk about RapidScale’s channel strategy? Has it been evolving?

RJ: We’re 100 percent channel. Once in a blue moon we’ll have an in-house account or a personal relationship, but we’re 100 percent channel so there’s no ambiguity there. That’s what we do, that’s who we are.

When you look at the approach to a mature cloud model, we believe it’s a channel manager, account manager, potentially a project manager, but we are 100 percent sure that you have to have solutions engineers because the channel needs a side-by-side selling approach and our goal is to be the best at doing that and we quickly matured into being one of the best at doing that by far.

CP: What are you hearing from partners regarding your channel strategy, partner program, etc.?

RJ: The community is embracing us now; they feel that we are a stable company financially, that we’re a stable company product and solution wise, and we’re a stable company in the sense of our channel leaders. That creates an engagement. They want to engage. They basically look and analyze the different companies out there, and they say who should we engage with, that we feel safe with, that we feel confident has a channel approach that’s not going to come back and screw us, so contractually, and who takes care of the partner community financially with commissions. So if you look at the evolution to getting to the point we’re at, it’s simply managing organic growth and not growing so fast that you hurt your back office, managing through challenging times and understanding product sets, and then ultimately getting to a stable place where we’re at right now which becomes a repeatable model.

This year we’ll grow 150-160 percent in revenue just based on acquisition and organic growth. When you combine that type of revenue growth, the channel as well as clients start to pay notice to that.

CP: What are the biggest issues currently facing RapidScale, and what role can partners/channel play in helping to address them?

RJ: The most important part is that the channel embraces companies such as RapidScale, Evolve IP and some other ones out there, and the reason why is we pay commissions and we care about the channel, and we understand the channel. The Microsofts, the Amazons, the Azures, the IBMs, they don’t understand the channel, so they look at that as a platform that IT teams buy from. Well, if IT teams purchase directly, you don’t really have a value and the channel doesn’t have a value. So I kind of look at it as an AT&T or a Verizon, or a Sprint when they didn’t really …

… understand the channel and tried to pivot back into understanding it because of their position now. But the channel is the fastest way to revenue because they’re driving sales every day to build their own businesses.

CP: It’s already been a big year for your company. What’s in store for the rest of 2017?

RJ: This will be the biggest year yet for RapidScale. There [are] a lot of things coming down the pike. There [are] going to be additional acquisitions, additional focus on some hiring that’s strategic to the company that we think is extremely valuable, that a lot of other companies are doing.

This is the biggest pivot in the cloud. The cloud is starting to buy. If you tried to be in the cloud five years ago, like we were, it was painful because you had to knock on everybody’s door and nobody wanted to listen. So everybody’s listening and they want a partnership. So the hybrid cloud, which is a fully managed IT kind of hybrid cloud … and then managed cloud being an MSP model — those are the biggest pivots the market has seen in IT in forever, meaning the buying strategy is starting to change and mature. And so now it’s just being on the front end, and having them come to you and having a model that makes sense, and then referred references and testimonials around all the clients that have gotten that great experience that they ultimately want.

CP: How are acquisitions helping your company?

RJ: It’s threefold. The No. 1 thing is bench strength; are we getting more engineering bench strength. One of the biggest things in any company is getting enough strength in engineering and bench strength to actually deliver a great experience for your client. No. 2 is financial. We’re buying people, we’re buying them fitting into a great company culture, which we have, and then we’re buying the revenue, and in buying the revenue, it’s understanding what type of synergies we’re going to have with it, as well as what talent are we going to have around them. So No. 1 and No. 2 are the synergies associated with that revenue.

And No. 3, which I think is extremely important, is what solutions are they experts at or are they delivering. With the Vonage acquisition, they were delivering Horizon DaaS, which is a desktop as a service. We were the No. 1 partner of the year for Citrix, but we want to be the top partner for VMware, too, with Horizon DaaS. We needed to get into that space and go after that, and actually have that as a service offering.

CP: Where do you see RapidScale’s channel strategy in three to five years?

RJ: We will have the No. 1 channel strategy in the United States, without a doubt. We will have the best channel strategy, the most mature channel strategy, and we will care about the partners more than any other cloud computing company will. That is the sole and core focus of myself as a leader, is to embrace the channel in every way possible and to create the biggest success story being RapidScale in the channel, through the channel, with the channel and as a partnership with the channel.