Cloud Sherpas–$40M in Funding and Another Aquisition

I’ve been following Google Apps and Salesforce reseller Cloud Sherpas since it launched a few years ago – in that time I’ve seen them acquire companies globally and grow into a real force in the space. I’m always a little dubious about how much long term viability there is in a company that makes its money earning a small percentage of a service charged out at $25/year, but I guess the power of an aggregative model is that enough of those small commissions added together starts to get meaningful.

Anyway, someone obviously has faith in the space since Clooud Sherpas has just picked up another $40M in B-round funding. Existing Series A investors Columbia Capital and Delta-V Capital are joined in the new round by Greenspring Associates, a global venture capital firm with over $2.2 billion in committed capital, and Queensland Investment Corporation, one of the largest institutional investment managers in Australia.

Cloud Sherpas’ momentum is pretty impressive – it has 3000 customers and has doubled in size every year since its inception. All those tiny slices of commission add up to a revenue figure in excess of $100M. Cloud Sherpas has, partially through acquisition, grown to 350 employees spread across eight different locations. According to the release, the new capital will also be used by Cloud Sherpas to grow its presence in key geographic regions, extend partnerships with Google and salesforce.com, and expand into emerging technology categories.

The Cloud Service Brokerage (CSB) space is an interesting one – while companies like Appirio are moving along a strategy that sees them provide highly tailored offerings tying together a selection of different enterprises application and also productizing parts of their service, to an extent Cloud Sherpas is mainly focused on helping enterprises migrate to the cloud in a fairly routine manner. The Appirio model feels more defensible to me, and I suspect that at least some of the new funding will go towards providing a deeper service.

The first impact of this funding is to finance the acquisition of West Coast CRM specialist CloudTrigger – in part to build out its new focus as a Salesforce partner. CloudTrigger is the broker who services such clients as AOL, USA Today and Riverbed – their focus is on the salesforce suite of products, in particular Service Cloud. They’re also the creator of G2Maps, a geographic mapping analytics and visualization app available on the Salesforce AppExchange.

The CSB space is going to be super important over the next few years as more large companies make the move to cloud applications – longer term the value probably lies in deeper brokers that offer specific customization and consulting services but in the meantime, Cloud Sherpas is well poised to leverage the coming shift to the cloud.

4 Comments
  • Good to see that companies as Appirio and Cloud Sherpas are doing fine.
    Yes, selling and implementing Google Apps don’t bring in the big bucks, but making your customers see and appreciate the value of a “cloud platform” will give you a foot in the door for the long term. A lot of satisfied customers is a great starting point.
    I’m trying to do the same in Europe-Belgium
    @daneelspeter

  • I suspect the money they make from reselling would be very small. But the implementation of Google Apps in a large organisation just like any application in a large company would have a large services component covering project, change management, rollout plans etc. They’re playing at the right end of town as selling services to SMEs for something that is $25/month is a much tougher sell.

  • Knowing a little bit about this, I’m just curious where the “25” number is coming from! ;-)

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