2-page Partner Case Study
Posted: 9/21/2012
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Nervogrid White Label Hoster Boosts Profits for Partners, Shrinks Costs 50 Percent with Cloud Services

Microsoft Partner Network member Nervogrid decided to offer a white label cloud services solution that is built on key Microsoft products and technologies, and that enables IT service providers to easily package and provision cloud-based solutions for their customers. Nervogrid now has a scalable business model that reduces partner costs by up to 50 percent, and helps partners meet customers' needs for affordable enterprise solutions.

Business Needs
Nervogrid is a member of the Microsoft Partner Network and was a finalist for the 2011 Microsoft Partner of the Year in the hosting category. The company provides white label cloud services—cloud services that IT service providers, such as managed service providers, hosters, telecommunications companies, and value added resellers, can purchase and brand as their own for resale to small, medium, and enterprise customers across a variety of industries.

Nervogrid was founded in 2004 when its senior leadership saw trends in the IT service provider industry that it wanted to address with a white label cloud services. Specifically, Nervogrid realized that IT service providers did not operate in large enough volumes, nor could they provision services with high levels of automation, to noticeably decrease their cost of goods sold. As a result, revenue and profit margins were stagnant among services providers.

In addition, providers were struggling to package cloud services as custom solutions for their customers and lacked efficient deployment processes. IT service providers struggled to onboard customers and deploy the cloud services that customers required in a timely manner, which further eroded the IT service providers’ profits.

Nervogrid envisioned a business model where IT service providers could choose a variety of cloud services for their end customers, and then deploy them efficiently through one control panel.

That vision brought about the white label model that Nervogrid uses today. Specifically, Nervogrid has a cloud services catalog that IT service providers can access through a web-based control panel.

* Some of our partners have reduced their production costs by as much as 50 percent. *

Aleksi Partanen
CEO, Nervogrid

The catalog includes a variety of cloud-based services for providers to choose among for their customers. At the core of the Nervogrid catalog are Microsoft products and technologies, the most popular of which is hosted Microsoft Exchange 2010. Nervogrid also hosts Microsoft SharePoint 2010, Microsoft Lync 2010, and Microsoft Dynamics CRM 3.0. In addition, the company provides a virtual private cloud solution (either dedicated or multitenant) built on Hyper-V technology, and will take advantage of Windows Server 2012. “We fill our catalog with the latest Microsoft products because Microsoft offers the technologies that our partners and their customers want—and need—to successfully run their businesses," says Aleksi Partanen, CEO at Nervogrid.

IT service providers who partner with Nervogrid can access the web-based control panel, which is branded specifically for the provider, and start packaging and provisioning cloud services for customers. Providers can even package their own solutions alongside Microsoft cloud services from the Nervogrid catalog. “Our partners can provision cloud services to meet specific customer needs in a matter of a few mouse clicks, without complicated implementation processes. It’s fully automated,” explains Partanen.

In fact, the provisioning process through Nervogrid is so simple that even nontechnical sales people can provision services for customers. “Nervogrid has the best and most user-friendly control panel in the market. This is particularly important when you have sales people provisioning and managing services,” says Timo Vilenius, CEO of Data Group in Finland, a partner of Nervogrid.

The revenue model that Nervogrid uses is straightforward—short contract terms, no minimums, and billed monthly on a per-use basis. So, its partners only pay for what customers use, and those partners invoice their customers directly. “Some companies that offer cloud services end up competing with their own resellers,” explains Anna-Carin Lensbo, CEO at 360IT in Sweden, a partner of Nervogrid. “That doesn’t happen with the white label model. Nervogrid is supporting, not competing against, our business.”

By creating a white label cloud service for IT service providers, both Nervogrid and their partners have benefited in the following ways:
  • Increased revenue, profit margins. Partners can start with a single service and then upsell and cross-sell additional services, which are easily provisioned. Partners can also reduce their cost of goods sold because of the automated production environment Nervogrid offers through the control panel. "Some of our partners have reduced their production costs by as much as 50 percent," explains Partanen.

    Instead of worrying about complicated deployments, partners can concentrate on revenue-driving efforts. “We are able to concentrate on sales and marketing without having to worry about managing the actual services, infrastructure, and performance,” says Christophe Reynaert, CEO at IT101 in Belgium, another partner of Nervogrid. “Nervogrid enables us to offer services like hosted Exchange at competitive prices. This was a perfect addition to our service portfolio and will keep our growth strategy on target.”

  • Developed scalable business model. With the Nervogrid white label model, resellers, traditional hosters, and telecommunications companies can easily create their own service offerings, brand the offerings, and deliver them to customers in a matter of hours with a high-level of automation. "We are enabling our partners to easily build custom Microsoft solutions for their customers," explains Partanen. "We've already built our back end, and Microsoft provides the products that customers want in the cloud, so scaling up is a breeze."

  • Meets customer demands with differentiating solutions. Smaller customers often want enterprise solutions, but can’t always justify the cost of an expensive implementation. At the same time, service providers want to offer those solutions, but struggle to attain licensing volumes that reduce their cost of goods sold. However, with a white label model, Nervogrid can provide enterprise solutions that its partners can offer at a competitive price. "By offering hosted Lync, for instance, we're offering the unified communications solutions that customers and partners want," says Partanen. "Take that a step further, partners can bundle hosted Lync with hosted Exchange and hosted SharePoint and create a comprehensive collaboration solution for their customers that they otherwise might not be able to offer.”

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Solution Overview

Organization Size: 40 employees

Partner Profile

Headquartered in Finland, Nervogrid offers white label cloud services to IT service providers in the Nordic and Benelux regions.

Software and Services
  • Microsoft Exchange Server 2010
  • Microsoft Hyper-V
  • Microsoft SharePoint Server 2010
  • Microsoft Lync Server 2010
  • Microsoft System Center 2012
  • Windows Server 2012
  • Windows Server 2008
  • Microsoft Dynamics CRM 3.0

Vertical Industries
  • IT Services
  • Hosters & ISPs

  • Finland
  • Norway
  • Sweden
  • Denmark
  • Belgium
  • Luxembourg
  • Netherlands