A newly-emerging startup, based at the Palo Alto Research Center (PARC) is giving the industry new ways to look at networking, cloud computing, and even the channel strategies that would drive its services into the market.
PowerCloud Systems, which is backed by Javelin Venture Partners and Walden Venture Capital, is offering the deployment and management of secure networks, leveraging the rapidly evolving “as-a-service” business model to establish lower costs and ease of use. The current iteration is based on 802.11n wireless technology, and features an impressive level of self-configuration.
“The basic premise is to move as much intelligence as well as the data into the cloud, while using less expensive gear at the customer premises,” explained CEO Jeff Abramowitz. “We’re also moving the paradigm from a focus on user management to one based on device management, given the wide variety of devices that access the network these days.”
Various interfaces give full reports at the customer level or by lists of customers, going down, to a certain extent, to the level of the end user. “With the exception of physical interfaces, pretty much everything else is remote manageable, explained vice president Andrea Peiro. “On top of that, you’ve got cloud applications that reside elsewhere, making everything else much more remote accessible.” If desired, SMS alerts can be sent to smart phones, making network support even more mobile. Solutions based on the PowerCloud offerings can be made to be HIPAA-compliant or PCI-compliant.
This past fall, PowerCloud engaged an OEM agreement with networking vendor D-Link, which will provide wireless access points as well as access to their indirect sales channel. We’re also told we can expect additional vendors to be added to the mix in the coming months. Though company executives would not comment, I could personally envision PowerCloud to be a compelling acquisition candidate, either for existing networking vendors, or for companies seeking to build a solid foothold in the networking business through the use of this innovative business model.
The go-to-market strategy is a bit different from what I would have anticipated. Rather than building a network of channels on their own, the company intends to leverage the channels of their OEM partners. On one hand, this approach gives the channels and OEMs the opportunity to be creative and highly interpretive in their approach. On the other hand, the degree to which either group will focus their energies here remains an open question.
In either case, the key to an effective strategy from a channel point of view will be found in identifying successful ways to differentiate against other competitors within the channel. In many cases, this might translate to some sort of vertical strategy that includes the applications that would ride on top of the network. But without such differentiation and “stickiness,” the purchasing decision basically become inextricably linked to identifying the least-cost provider. In that case, the primary opportunity would likely belong to large service providers, distributors, and DMRs who can leverage economies of scale. But given the opportunity for channels to wrap the PowerCloud offerings into a comprehensive value proposition, I believe some of the key partners are likely to grab the ball and run with it.