‘We adopted platform-as-a-service and then started working with people in the DevOps space, which wasn’t one of our core strengths. We found a company in the E.U. that is excellent at it, and started working together for about a year, and the synergy seemed right. I wanted a DevOps team, and I wanted a cloud lead on our side, someone in charge of our cloud experience. Scaleforce was the company that fit that bill, and so we acquired it,’ says Ted de Vos, president and founder of Simnet.
For a small cloud, security, and managed services provider looking to expand its offerings to embrace a wider platform-as-a-service capability, developing DevOps expertise is one way to do so. But developing that skill takes an investment in scarce resources and talent that can be applied to existing business as well.
One such company, Simnet, found an alternative via its acquisition of Scaleforce, which gives it instant credibility in the DevOps space.
Ted de Vos, president and founder of Simnet, a Toronto-based provider of cloud services, cybersecurity services, and managed services, told CRN that his company had partnered with Cypress-based Scaleforce, but decided to make that company’s capabilities its own with an acquisition.
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“I like to own everything,” said de Vos (pictured above). “This is not a god complex or anything, but I don’t like to not be in control of what I offer my customers. I can’t dictate terms to a partner. I can ask, and they can comply if they sort of feel fit.”
The acquisition of Scaleforce brought Simnet other benefits, including a European cloud hosting business targeting both channel partners and large customers, as well as a way for Simnet to significantly increase its European presence, de Vos said.
Furthermore, it’s a relatively easy acquisition for Simnet, he said.
“It’ll take some networking to validate connectivity,” he said. “But as far as the app stack and tech stack, my team already knows how to support it. So that’s a big win. There’s no learning curve there from a support perspective. There’s no learning curve in terms of how we do billing in Europe compared to North America.”
There’s a lot going on at Simnet. To learn more, read the entire conversation with de Vos, which has been lightly edited for clarity.
How do you define Simnet?
We’re a performance cloud, a simple place to put data online. We built our own cloud. We have our own cloud hosting infrastructure. Over the years, we’ve evolved from being an ISP, then we moved into managing those workloads, and then we moved into co-location, then we moved into infrastructure-as-a-service, then platform-as-a-service, and now something-as-a service, and then self-serve. So it’s been an evolution over the past nearly 20 years. Growing our company in the past five years has moved from word of mouth to bringing on a sales team, and then expanding out into the U.S., and then expanding out into the E.U. A security focus and performance focus is really where we’re at. How do we make a monolithic legacy application faster in the cloud. How do we take customers from on-prem into our private environment.
Did you just say ‘something-as-a-service’?
Something-as-a-service is pretty much same as ‘x-as-a-service.’ It’s whatever we can do to work with our clients. We build our stack based on their needs. It’s not a ‘Field of Dreams’ approach where we build it, it will come. It’s more our customers ask for something, and then we look at it and say, how about this way of doing it? This is more cost-effective for them and makes it a better experience for them. Our whole premise, our whole raison d’etre, is to be service-oriented. We are a service company. As much as we’re a platform and an offering, it’s the people behind Simnet which is what resonates with our customers, how we engage with them. We get to know their business, get to know what application stack and tech stack works for them.
You said you build your own cloud. Why build your own cloud, given that there’s plenty of other highly scalable clouds out there?
I should say, build our own or leverage existing platforms and then manipulate them for our needs. We were a VMware shop but moved away from VMware a couple of years ago. We went to a fringe hypervisor, validated it, moved into it, and found issues with it. Then we moved into another one, same thing. Then we said that’s enough of that. So now we’re building our own offering on top of KVM so that we control the narrative and don’t let the vendors control us. We own the relationship with our customers. So we don’t outsource anything. Everything we do, we own and we control. When a customer calls and says they have a problem or an experience they’re not happy with, I need to be able to give them an answer and not give them some nonsense like, ‘Oh, my vendor has a bug and I’m waiting for them to fix it.’ We want to be in control, to be able to say we got this taken care of for you, and this is how we’re going to do it. That’s why we built our own UI to KVM.
[Also], there’s a gap. Partners and end users want an alternative cloud, alternative as in non-hyperscaler. But they also want a turnkey, simple cloud, with management and security built in day one. That is what we offer. That’s how we differentiate ourselves from the hyperscalers, because we start with a very secure posture where any workloads that go in are already firewalled and are already DDoS’d at the edge and all that. It’s not just, ‘Here’s a public IP and good luck.’
Simnet has made an acquisition. What’s the news?
We started developing and really leveraging Docker and Kubernetes. We adopted platform-as-a-service and then started working with people in the DevOps space, which wasn’t one of our core strengths. We found a company in the E.U. that is excellent at it, and started working together for about a year, and the synergy seemed right. I wanted a DevOps team, and I wanted a cloud lead on our side, someone in charge of our cloud experience. Scaleforce was the company that fit that bill, and so we acquired it.
How big is Scaleforce?
They have seven staff, and they have 780 workload environments. Workload environments would be like a virtual environment. And they have data centers in Cyprus and Amsterdam. The data centers do disaster recovery to each other. Cypress is where they’re full channel, where a telco resells their platform. They don’t sell direct. In Amsterdam, they built a hosting offering for companies looking to sell hosting services. So it’s hosting for the hosters. We wanted to get into in that space. We’re looking to go less direct and be more channel focused. It seems to be the right fit for where we’re going with our self-serve.
Was Scaleforce a profitable company?
Yes.
Did you release terms of the deal? How much did you pay for Scaleforce?
Just a little over a million [dollars] for the company. It wasn’t a huge acquisition. It will add about 5 percent to our core ARR (annual recurring revenue).
Does Scaleforce bring any skills that Simnet didn’t have before?
We’ve been on a DevOps journey for a couple of years, and that’s what they do really well. They are a DevOps shop. They don’t do infrastructure. They are at the application layer. So I’m bringing in their team. Their owner is taking a position as our head of cloud experience, and he’s in charge of developing the UI for our partners.
You said Simnet partnered with Scaleforce for about a year before you decided to make the acquisition. Why acquire it rather than continue partnering with it?
It’s funny. Last November, I just floated the idea. I said we work well together. It’d be better if they just worked for me, because I like to own everything. This is not a god complex or anything, but I don’t like to not be in control of what I offer my customers. I can’t dictate terms to a partner. I can ask, and they can comply if they sort of feel fit. So I just was joking around. I said, ‘Hey, why don’t I buy you and then we just work together from now on.’ And he said, ‘Let’s see what that looks like.’ He went back to his partner, and we all came to an agreement on a number. I recently came back from Italy and Greece for meeting with them. They hosted my team for a couple of days, and we got to meet them face-to-face. Before, it was always virtual. And it’s nice to meet people face-to-face. You really get a feel for them, and we clicked.
Going forward, is there a lot of work to integrate Scaleforce into Simnet?
No. That’s the beauty. We have a common platform. It’ll take some networking to validate connectivity. But as far as the app stack and tech stack, my team already knows how to support it. So that’s a big win. There’s no learning curve there from a support perspective. There’s no learning curve in terms of how we do billing in Europe compared to North America. It might take a minute to sort it, but we’ll get there.
Prior to the acquisition of Scaleforce, did Simnet have any customers in Europe?
We already had clients in the E.U. We already had a U.K. and France presence. So, but those clients are Canadian companies that are expanded. That’s why we have our presence there. This will be the first time we have a European presence with a European base. There’s no sales team there. We have no marketing being done in the E.U. now. We will be layering that on.
So this how Simnet will build a European market?
That’s right. For our CDN (content delivery network) and ADN (application delivery network), this gives us that point of presence. This will help with our growth goals. We’re doing 50 percent growth year over year. To scale and maintain that, we had to go into a new market.
Besides integrating the Scaleforce team, what are other strategic priorities for Simnet for the rest of the year?
Like most other cloud companies, we’re expanding our AI and GPU services for infrastructure. We’re focusing more on single-click deploy solutions to enable our partners to get clients up and running faster. And we’re expanding our reach with a Singapore launch in Q3 which will give us a better presence there and in India and South Africa.
Anything else you think we need to know about Simnet?
I could talk for hours about it. I don’t want to bore you. We’re an infrastructure company that has that offers white glove service. That is our differentiator. We provide the trust. The more we get involved in VCIO (virtual CIO) services and things like, the more we can show customers they don’t need to have all these different roles. They just need to have the service. That’s it’s big differentiator.
When we onboard a customer, we do all the legwork. We do the architectural design, the risk management, the security posture, the migration plan, the validation. We do it all. And I mean, every company does to some degree. But we own it, and so it’s our throat you’re choking. It’s not some integrator that’s pointing the finger, and it’s not some guy supporting it from wherever. We manage it, and we have that trust. We go through ITIL (Information Technology Infrastructure Library) processes, change management, all of that to make sure the businesses and services aligned. It takes the commodity component, which is the hosting piece, and layers on the value all the way from operational to security to strategy, which really provides the value to the customer. That’s why the self-serve function is a little bit different for us. When partnering with MSPs looking to resell our services, we consult with them, and they can pass that along. We offer playbooks and opportunities to help their customers add value. Instead of them having to reinvent the wheel and spend the time, we do it for them.
How important is the channel to Simnet?
Our commitment to the channel, it sounds cliche, but that is our future. We’re committed from the top down, which historically hasn’t been the case. Simnet has supported the mid to large enterprise. Now we are committed to the channel. We frequently talk about what is important to the MSP, to the VAR, to the reseller, and how can we make things simpler while increasing profit and give them a first-mover competitive advantage. …
What’s next for Simnet?
What we’re building right now is the ability to select object-based infrastructure. You’ve heard of infrastructure as code, right? Terraform or Ansible? But imagine using a Visio-type drawing or a Draw.io-type drawing, where you drag a server, you drag a line, you drag another server, or you drag an application service, and then you hit apply, and it builds it for you. You don’t need to overthink it, right? And if we layer in our methodology, which is security first, performance second, and then manageability, it makes it easy for someone to deploy a net-new business or add on a database or add on blob storage, just because they’re dragging and dropping, instead of having to go through and build something. It really simplifies the initiative, especially with our platform-as-a-service and Docker with Kubernetes. The complexity is gone. It’s what Simnet is, trying to take a simplified approach to all this because technology is
complicated.
