Nerdio CRO Sees Boost From VMware, Citrix ‘Chaos’

‘Probably 90 percent of our customers are coming over from Citrix or VMware,’ said Nerdio’s CRO Joseph Landes.

Upwards of 90 percent of Nerdio’s new customers are flocking to it from VMware and Citrix due to market uncertainty as well as the lure of Nerdio’s low pricing and non-proprietary Azure virtual desktop offerings, said Nerdio CRO Joseph Landes.

“We’ve really benefited from the chaos that Citrix and VMware are going through now,” Landes said in an interview Sunday with CRN during The Channel Company’s XChange August 2022 conference. “So their chaos is our opportunity.”

Chicago-based Nerdio is a Microsoft Azure automation provider that aims to empower MSPs and enterprises to build successful cloud practices in Microsoft with Azure Virtual Desktop and Windows 365.

Landes spent 22 years at Microsoft in various roles, including Microsoft’s worldwide artificial intelligence sales and marketing leader, before joining Nerdio in 2018.

Nerdio’s Market Momentum

Nerdio now has over 2 million users and more than 5,000 customers as market demand for Azure and its virtual desktop solution continues in the new remote and hybrid work environment.

Nerdio’s flagship Manager for Enterprise offering is a packaged Azure application that runs in users’ own tenant without compromising security and compliance by allowing third-party vendors access into the IT environment. Nerdio’s SMB offering, Manager for MSP, lets MSPs deploy, manage, and optimize virtual desktop environments in Microsoft Azure through easy multi-tenant management.

Landes said customers have been flocking to Nerdio this year, in part, due to market uncertainty from its competitors VMware and Citrix.

“Probably 90 percent of our customers are coming over from Citrix or VMware,” he said.

VMware And Citrix Being Acquired

Both VMware and Citrix compete with Nerdio in the enterprise virtual desktop market.

Broadcom sent shockwaves throughout the IT world this year when it unveiled plans to acquire virtualization and software superstar VMware for $61 billion. Many VMware channel partners and employees have expressed fear that Broadcom will cut VMware’s headcount and innovation engine as Broadcom seeks to make VMware more profitable.

Citrix, meanwhile, is set to be acquired later this year by affiliates of private equity firms Vista Equity Partners and Evergreen Coast Capital for approximately $16.5 billion. Once closed, the firm plans to immediately take Citrix private and merge it with Vista portfolio company TIBCO Software, a data integration and analysis software developer.

In the interview, Landes explained Nerdio’s market differentiation compared to its rivals VMware and Citrix. Edited excerpts of the conversation follow.

What kind of market momentum is Nerdio seeing in 2022?

We’ve really benefitted from the chaos that Citrix and VMware are going through now. So their chaos is our opportunity. Because we don’t really compete with them on the MSP side, we don’t run into them. But on the enterprise side, we certainly do.

Probably 90 percent of our customers are coming over from Citrix or VMware. So you say, ‘Well, why is that the case?’

It usually comes down to two things: one is cost.

We are, by far, the most cost-efficient solution in the market. To stand up an Azure Virtual Desktop for a user is probably about $7.50 dollars, compared to $40 or $50 or $60 or $80 for a Citrix or VMware per user per month.

Then you have a lot of customers who just don’t want to be locked into a proprietary virtual desktop solution like those two companies have.

Customers want to be pure, native Microsoft. They are so used to using Citrix and VMware that when they start using Azure Virtual Desktop (AVD) they’re surprised. AVD is missing a lot of capabilities that we provide as the enterprise-grade solution on top of AVD.

So that’s been a very interesting thing, to see what those two companies are going through now and us being there to help customers continue to succeed.

What is Nerdio’s market differentiation versus VMware and Citrix?

First of all, we approach desktop virtualization in a different way than those two companies.

Certainly, it’s not to take anything away from those two companies—they’ve been around for a very, very long time and doing a lot of great work, for sure. Citrix is being acquired by private equity, and VMware is being acquired by Broadcom. So those two companies are going through a lot of change.

Obviously, we’ve seen thousands of people at Citrix leaving. I mean, certainly there were layoffs, but even more people are leaving now. So there’s a lot of uncertainty.

But if you think about how we differentiate: in order to use Citrix or VMware, you have to buy into the way they do it. So they have a very proprietary way of doing desktop virtualization. You have to use their own brokering, their own control plane, their own everything.

We take a different approach.

We don’t install any proprietary elements onto a customer’s desktop. We believe that we should earn a customer’s business every day. If they don’t want to use us anymore, they could simply rip us out. And then all of their data, all of their settings, and everything else still exists in Microsoft’s Azure portal.

So as a result, we’re native Azure Virtual Desktop. [VMware and Citrix] are not native; they’re proprietary.

Can you give me an example of how VMware and Citrix are proprietary in terms of Azure?

So when VMware and Citrix say they use or that they support Azure Virtual Desktop, they’re making use of one element of Azure Virtual Desktop—which is Microsoft’s multi-session operating system.

So they do use the Windows 10 or Windows 11 multi-session operating system, but everything else that they deploy is their own technology, whereas Nerdio leverages Microsoft’s native technology and builds enterprise capability natively on top of that. That’s really our main differentiator.

Another differentiator we have is we don’t lock people into long-term agreements.

Our price for our products is $3 per monthly active user. You can buy as much as you want or as little as you want. And if you don’t like us, you could just cancel the agreement.

We sell through Microsoft’s Azure Marketplace. So everything’s done through Microsoft’s Azure Marketplace: the deployment, the billing, etc.—it’s friction free is probably the best way to put it.

So those are few ways that we differentiate from them and aren’t proprietary like them.

Nerdio just revamped its MSP Partner Program. What are one or two of the big highlights?

One of the things that is super important to us is that we want to have a partner program that provides significant value and unique value to MSPs. We think we’ve achieved it.

The way our partner program now works is it simply is tied to the amount of spend that someone has with Nerdio. We have four different categories: Bronze, Silver, Gold, and Platinum. At each level, you achieve a certain discount off of the cost of the licenses for Nerdio. That’s just a basic thing. But then we have other benefits.

For example, we run a lot of our own first-party events in the channel. We lean very heavy on education and teaching people how to build cloud practices in Azure.

So we run something called the Nerdio Training Camp, where an MSP will come to a city, and they’ll get hands-on training for eight hours on how to do it. We’ll give you somewhere between a $250 and $750 voucher to travel to the event—the event is free, but we’ll also give you the [travel] money if you’re at the right level. We now also have MDF for you to run your own Azure events for your customers.

We also have an event that we run at the end of February called NerdioCon, which is our own first-party big partner event in Cancun. If you’re at the highest level of our partner program—Platinum and Gold—you get a free all-expenses-paid trip to Cancun for either one or two people. If you’re at the lower levels, you get a percent discount on the cost of attending NerdioCon.

So we now have this nice array of benefits. We look at other vendors in the space ,and we don’t see other vendors doing it the way we do. We think it’s important as a vendor to come up with things that are uniquely good for an MSP to help them on their journey.

We launched version one of our partner program about a year ago. The main benefit from version one was NerdioCon. … But now we really thought about what else can we do. We have a certification program so you get free certification vouchers. We have free internal use licenses, so you get a certain number of those as you move through the tiers. So it’s a pretty rich program. Most MSPs we’ve talked to seem to appreciate that we’ve invested in it.