COMPANIES TO WATCH: Hosting company drives Canadian growth through channel

Published: January 31st, 2012

As vendors and partners in the industry are wondering how to take on profiting from the cloud, one early Web hosting provider and cloud adopter is thriving, and expanding its business through the channel.

Founded in 1998, Sherbrooke, Que.-based SherWeb had the advantage of being one of few Web hosting providers based in Canada, let alone serving the French Canadian market.

“There were pretty much no Web hosting companies that were specialized,” said Matthew Cassar (pictured), SherWeb’s executive vice-president, who co-founded the company with his brother Peter, now the president and CEO.

“In 2005, we basically did a switch,” and moved to an on-demand software model, now known as cloud computing or software-as-a-service. The company continued its hosting services, but partnered with Microsoft to offer hosted Exchange 2003 and SharePoint 3.0. SherWeb also became one of the first providers of hosted Exchange 2007 and SharePoint 4.0 and began offering hosted Exchange 2010 about two years ago.

“We basically became really a leading provider, not only in Canada, but in North America as well, providing hosted Exchange,” he said. In December, SherWeb won Hosting Partner of the Year for Microsoft’s 2011 Impact Awards.

The company, which mainly serves the SMB market but is growing among large enterprise customers, also offers hosted CRM as well as a hosted mobility solution for smartphone users to sync to their Outlook accounts and also offers virtual private servers in its data centres.

This January, SherWeb launched SkyNox, its new cloud data backup solution.“We’re seeing a lot of demand from our customers,” Cassar said. “It’s a service that’s essentially made for our current market base.”

SherWeb’s reseller program was created about five years ago, but only became a major focus in the last 18 months. “Our channel and reseller program is something we’ve developed quite aggressively for the past year or so.”

Partners can resell either co-branded or white label services from SherWeb. Margins vary from 10 to 40 per cent, though Cassar said it’s quite rare to only make 10 per cent. In June 2011, SherWeb also became the first Canadian e-mail and collaboration vendor for the Ingram Micro Cloud Marketplace.

Currently, roughly 25 per cent of SherWeb’s business goes through its channel partners and Cassar estimates that to go up to 50 per cent within the next two or three years.

But, SherWeb is not planning to be a channel-only company and will keep its direct business growing. “We like having the relationship with end users, we like being able to provide them the service directly,” he said.

“It gives us a better sense of what the requirements are, what kind of support they require, what kind of tools they’re looking for, what kind of pricing they’re looking for and what kind of products they’re asking for in the future.”

In 2011, SherWeb was ranked No. 16 on Deloitte’s Technology Fast 50 list in Canada, and No. 77 for North America’s Fast 500, with revenue growth of 1132 per cent over five years. “We’re obviously going to continue to grow very very fast.”

Follow Harmeet Singh on Twitter: @HarmeetCDN.