Libanga Computer Systems succeeds with Cloud Server

Background

60-70% of Indiana-based Libanga Computer Systems’ managed services are delivered from Intermedia’s cloud. But their success goes far beyond Exchange: Libanga’s “land-and-expand strategy” has made them one of Intermedia’s most successful Cloud Server partners.

“As Intermedia expands its portfolio, we do the same,” says Mario Guerendo, Libanga’s President and CEO. “We hook a customer with Exchange Email and then introduce other services. For example, we have a client we’ve been working with for four years, and we’ve tripled our monthly billing with them as we add Intermedia services that become available.”

We recently sat down with Guerendo to understand how Libanga uses Cloud Server to double or even triple monthly billings from their Exchange Email clients.

Libanga Computer Systems

Company Profile:
60-70% of Indiana-based Libanga Computer Systems’ managed services are delivered from Intermedia’s cloud.

Industry: Managed Service Provider

Headquarters: Zionsville, IN

Intermedia’s customer since: 2009

The Challenge

Most Intermedia partners have reported two main challenges in trying to sell Cloud Server: first, identifying the best apps for the service; and second, communicating why Cloud Server is more valuable than both on-premise servers as well as other clouds.

Guerendo understands these challenges. But he assures us that there’s light at the end of the tunnel. “We actually doubled the monthly revenue for our first client that we moved to Cloud Server.” Here’s how he does it.

The Solution

Which Apps to Use

Generally, Guerendo says, a single Cloud Server is fine for non-resource-hungry file servers and application servers, like QuickBooks or CRM apps/databases. For heavy SQL applications, he uses one Cloud Server for the database and another for the apps. This practice is made easier (and more affordable) by the fact that Intermedia includes VPNs and firewalls standard.

Guerendo also uses Cloud Server for vertical-specific apps like Electronic Medical Records or legal case management software.

Because most of his customers are between 10 and 50 users, he typically provisions one or more Cloud Server III (with 2 vCPUs and 3 GB of RAM). He’ll add an extra vCPU if the workload demands it.

Demonstrate Cloud Server’s Value

Guerendo outlined two keys for convincing customers to choose Cloud Server: lower costs and better business continuity/disaster recovery.

  • Showing lower costs. “One of our clients, who is a surgeon, had three offices in three cities. His practice had three different servers, which meant they had three different server licenses for their electronic records applications—as well as monthly software support fees for each license. We simply showed them that Cloud Server cut their licensing costs by two-thirds, which would save them $2,500 a month. That one was a slam dunk.”
  • Improving business continuity through physical security. “For a small business, PHYSICAL security is a huge risk. This same client had a situation where someone broke into one of their offices and stole their backup tapes. We’ve had situations where an entire production server has gone missing, because someone broke in and stole the server. Small businesses simply shouldn’t have business-critical hardware in their offices any more.”

Overcoming Common Objections

There are also three objections that Guerendo routinely encounters—and routinely disarms.

  • Illusions of control and ownership. “Small business owners want control over their environment. They might feel like a hosted server doesn’t belong to them. I use an analogy: ‘Do you have a payment on your car?’ I ask them. When they nod, I tell them that it’s the same thing with Cloud Server. ‘That car is completely yours—as long as you keep paying for it.’”
  • Overvaluing their existing servers. “SMBs don’t often realize that a $15,000 server bought four years ago is worth far, far less today. We had one client whose $15,000 server was being sold on eBay for about $800. Same goes for software—a Windows Server 2003 license goes down in value. I need to make sure my client has no illusion about the value of their hardware. However, we do try to find buyers for hardware when we can. This lets us offer a special deal: cash back for moving into the cloud.”
  • Worries about provider stability. “Customers are rightly worried that I could get hit by a bus—and then what happens to their server? So we’ve come up with what we call a ‘Non-Disturbance Agreement.’ This assures them that if something happens to us, they can go straight to Intermedia to take over management of their assets.”

As Intermedia expands its portfolio, we do the same. We hook a customer with hosted Exchange and then introduce other services.

MARIO GUERENDO, President and CEO, Libanga Computer Systems,

Products They Use

The Results

Guerendo regularly leverages Cloud Server to boost monthly revenue from his existing customers. And he’s sure his strategies will pay off for any Intermedia partner looking to do the same.

Guerendo also has advice for selecting Cloud Server over Rackspace or Amazon. “I like working with providers that have a ‘nice ecosystem.’ We already know Intermedia’s processes, we know how the company functions and we already have other services with them. And it’s a lot easier to work with one hosting provider than with ten.”

“What’s more,” Guerendo continues, “We also like the fact that Intermedia is white-labeled. Rackspace has better pricing than Intermedia, but we still choose Intermedia. In the hosting business, trust is a big thing. We’ve been working with Intermedia for a long time, and we see how they LISTEN, and if we have to pay a premium, it’s worth it.”

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