As SMBs Drive a Cloud Surge, Partners Must Turn to Automation to Support It

As the world shut down last year, business at SkyKick -- a 100 percent partner-focused company providing cloud automation and management tools -- boomed.

In the spring of 2020, after years of development, SkyKick launched its latest product: Cloud Manager, a workflow automation application for help-desk administration. The timing was impeccable, if unplanned. Just as employees around the world were transitioning to remote work and their employers were commissioning cloud services in bulk to support them, SkyKick was rolling out a product to help IT services providers (ITSPs) consolidate the management of all the ensuing moving parts.

"Obviously we couldn't have predicted the pandemic," said Todd Schwartz, SkyKick co-founder and co-CEO, in a recent interview with RCP, "but it actually worked out well because this was the tool that they [ITSPs] needed to basically manage the influx of demand for all these different SaaS applications. And so, we've seen incredible pick-up on that product since we launched it last spring."

SkyKick's good fortune has only continued. The company announced this week that it has secured $130 million in financing, bringing its total capital raised over the $200 million mark. The infusion of cash will go toward product development, as well as further development of SkyKick's partner-facing support teams.

"Across the board, it's capital that's going right into the market to help partners be more successful," Schwartz said.

Automation for Customers -- And Their Partners
It's no secret that cloud computing was one of the few markets that thrived during the pandemic, with small and midsize businesses, in particular, greatly accelerating their consumption throughout 2020. Cloud had its biggest single-quarter spending increase in the fourth quarter of 2020 at $3 billion, and demand is likely to continue to surge through the end of 2021. As Schwartz put it, the pandemic was a "cloud accelerator."

This presents a unique set of opportunities -- and challenges -- for the kinds of partners that SkyKick serves. One avenue for growth for ITSPs is data protection, noted SkyKick co-founder and co-CEO Evan Richman.

"As more people are moving to the cloud, we've seen an overall increase in demand for data protection," Richman told RCP. "We're seeing MSPs and IT service providers taking that front and center, and more seriously, to serve that demand for their customers."

He added that one hurdle for partners is the sheer complexity of managing a multitude of cloud services for a multitude of new customers with their "still fairly limited resources." It's the kind of problem that SkyKick's automation products are made for, from the aforementioned Cloud Manager, to its migration- and backup-automation solutions for Microsoft 365.

"The need to have more automation around how they [ISTPs] administer and support their customers, both from Microsoft and cross-cloud, is growing because there's been such a surge in overall support tasks that they need to accomplish to cover all these cloud applications and all these additional support tickets," Richman said.

Even within their own operations, many services providers may find they can use a good dose of automation themselves. Most partners, after all, were not exempt from the regional stay-at-home orders that took effect at the start of the pandemic last year.

"The ISTPs themselves are having to be remote workers," Richman pointed out, "whereas before, you can imagine a support desk where everyone is sitting around, and how they supported customers could be...local knowledge, that native knowledge that you get from talking to each other."

The point is that to keep operations running smoothly while transitioning from in-person work to remote work, both partners and their customers need to adopt a certain level of automation and standardization.

Keeping SMBs 'Resilient'
The $130 million in new funding announced this week is SkyKick's sixth insider-led round, according to the company's announcement. Contributors included member's of SkyKick's current investor pool, such as Trebuchet Capital and Schechter Private Capital, but also new participation from Morgan Stanley, which provided equity and debt.

"We are thrilled to partner with SkyKick and its outstanding management team," said Hank D'Alessandro, managing director of Morgan Stanley, in a prepared statement. "We believe that the company is very well positioned in the market to accelerate its growth trajectory and continue to innovate and serve IT Service Providers globally."

As Schwartz sees it, the new funding will enable SkyKick to continue nurturing a partner community that has helped keep many SMBs afloat during an extremely challenging year-and-a-half.

"I think SMBs, in particular, are so resilient, and it's been inspiring to see so much transformation happen across such a massive market," he said. "The IT service provider community is really the unsung heroes that helped this massive global community transform their business and adapt to this post-pandemic world, however it evolves."

About the Author

Gladys Rama (@GladysRama3) is the editorial director of Converge360.