Russ: Welcome back to the BusinessMakers Show, heard on the radio, seen online at thebusinessmakers.com brought to you by Comcast Business, built for business. My guest now, Dave Levin, the founder and CEO of Cloudspace USA. Dave, welcome to the Businessmakers Show.
Dave: Thank you for having me, Russ.
Russ: You bet. Tell us about Cloudspace USA.
Dave: Cloudspace USA is the next generation Internet computing. It's a replacement for small business systems in your office. It's cloud-based, and it's all inclusive.
Russ: Cool. Okay. Small business. What's small?
Dave: Small business is anywhere from 2 people to 100 people.
Russ: Okay. All right. Is there a sweet spot in that range?
Dave: Probably the 20 to 40 range is our sweet spot.
Russ: Okay. Okay. So I got a small business. I've been growing. I've got a tech guy, and he's doing okay. I've got a server or two, and I'm trying to keep it up all the time 'cause I got a website. Am I an ideal prospect for you?
Dave: Yes, you are an ideal prospect. The ideal prospect for us is a company that's had their internal systems for three to five years 'cause they're getting ready to make a capital expenditure. And one of the main things about this cloud technology is it cleans out all capital expenditures in IT infrastructure.
Russ: Okay. Okay. So I don't have to go buy servers. I just have you come in and take over. And you might be buying excess servers to handle me, but you're probably not because you have a lot of servers there that you just tap me into your system.
Dave: We have a large enterprise server cluster and then all of our users run on that, so we generally don't buy new hardware for new customers.
Russ: Okay. Okay. Cool. I remember when the cloud first started being talked about all the time. I was working with a lot of datacenters then, and they were a little nervous about it. And they had developed tactics where they would take their customers and say, "Hey, we're gonna show you your server," and they'd go in the back room of their datacenter and take a picture of a server and send it to them.
Dave: So people know what they -
Russ: Yeah. And at the time, that was supposed to be reassuring, but it doesn't matter anymore. We just know that we have computer power and storage power.
Dave: One of the issues is, that you discussed, they've got their IT guy they like, they're comfortable with. So their IT guy is fixing servers, making sure the backups are running, taking care of software upgrades. All that stuff goes away, and you pay this one monthly fee for that. And so the IT guy is like, "Well, then what do I do?" But the business owner is paying for a guy to do mundane maintenance, and now all that's taken care of. You move your IT guy up to the next level and he helps you make more money.
Russ: Okay. Cool. So once again, I'm this small business guy. Say I've got 30 employees. Everybody's got a computer. We have our servers. Get rid of my servers. I don't have to upgrade and buy new ones then. You come in and take over. Describe it in more detail. What about software? Software license? What about Exchange server? What about those things?
Dave: So the deals we've made with Microsoft and Citrix and a variety of other partners is for monthly rental of their software. We can rent any kind of software. And the price to rent software is approximately the cost of that software over three years. You don't really buy any new software, just you pay on a continuous basis, and you get the latest version of every software. And we make money on the margin on that software.
Russ: Okay. Okay. So you keep me updated with the newest version all the way along?
Russ: Okay. So I'm paying this monthly fee now. What's an example of a monthly fee that a user of your service would pay per - I guess it's per workstation?
Dave: Per workstation and the infrastructure. So for, let's say, a company with ten users in it, you start by buying the virtual private could. And the virtual private cloud gets you your network, your file server, your firewall, your router. Kind of the things that make up your basic network even in your office. That's $279.00 a month.
Once you have that, then you add on workstations at will, and those workstations have everything included. They have disk space. They have backups. They have email. You don't worry about Exchange servers. You don't worry about any kind of pieces except your base infrastructure. It comes with Microsoft Office, with virus protection, with spam filtering, everything. And then if you need an accounting system, if you need a CRM system or some type of software for your business; then you add that on on top. And we're adding on more vendors all the time that offer those specialty softwares on a monthly basis as well.
Russ: Okay. So what would I be paying per workstation in -
Dave: So the workstation is $95.00 a month with everything included.
Russ: Okay. Okay. Now, but that doesn't include the workstation itself. I've already got my computers and my -
Dave: That would be the cloud workstation. So a cloud workstation is accessible from anywhere you want. So let's say you have a PC sitting in your office, and it's not the fastest PC in the world, but it doesn't have to be anymore because all the computing power is in the cloud now. And then you've got a PC at home, and sometimes you'd like to use that. And then you've got a laptop you take on the road. Well, that one $95.00 a month gets you your desktop on all of those anytime you need 'em.
Russ: Okay. Okay. And your desktop, exactly what's happening is that when you access your desktop, you're accessing your computers that you're servicing for us that are the cloud, right? The software's there.
Dave: That's right. And it's all virtual. So the private cloud is virtual. The desktop is virtual. The servers are virtual. The routers are virtual. Everything. There's a minimal amount of hardware in our environment, and then everything else is virtualized.
Russ: Okay. And so, therefore, your connection speed, how you get to it, it's reliability and its speed are important.
Dave: The reliability of the Internet is probably the most important factor for having a quality experience with your cloud service.
Russ: Okay. And so you're not really supplying the connection. You contract that out with the other Internet service provider-type connectors, right?
Dave: Yes. Yes. And then we'll go in to a company and we'll do an analysis of their Internet service and make sure it's stable and clean and kinda meets our specs so that we can put cloud space out there.
Russ: Okay. Okay. Now, do you use people, all of the Internet service providers?
Dave: We use a lot of Internet service providers in town. Probably the most common one that we use would be Comcast, Comcast Business. It seems to be everywhere.
Russ: Okay. Really cool. So what triggered this idea. I know you have background in IT for quite some time, but what triggered the idea for cloud space?
Dave: Strangely enough, I met a guy at a garage sale. [Laughter] And he worked for a company that had infrastructure, and they were trying to sell it, and we talked for a few minutes. He heard me talking on the phone about a datacenter, and said, "Hey, you're in IT." And we set up this meeting. So I went to his offices, and they started laying out this cloud-based system for me and how they wanted me to resell it.
They explained all the details of how it worked, and it was big business stuff. And I said, "You know, I've got little clients. I really can't use 500 workstations for this customer and all these systems, but this is really cool stuff. I like it." And so that was maybe around Christmastime a year and a half ago, and I went home and went on holiday and relaxed. And about mid-January, I said, "You know what? I bet 500 small business PCs would work perfectly in that same environment." And then I realized that I could build the infrastructure for what these guys were offering it to me for, and so I built the network.
Russ: Cool story. Idea triggers is one of my favorite categories, and you got a good one there. Well, Dave, I really appreciate your sharing your story with us.
Dave: Thank you very much. I appreciate you having me here, Russ.
Russ: You bet. You bet. All right. And that wraps up my discussion with Dave Levin, the founder and CEO of Cloudspace USA. And this is the BusinessMakers Show brought you to by Comcast Business, built for business.