‘With this investment, Nerdio is super well positioned to help organizations that adopt Microsoft DaaS management solutions in a much easier way than they ever had,’ Nerdio CRO Joseph Landes tells CRN in an interview.
Nerdio, a vendor that sells services to help Microsoft partners deploy native virtual desktops, has raised $117 million in a Series B round of funding to help double its employee count over the next year and add sales staff to grow its presence overseas.
Also key to the company’s growth is investing in its products to continue to please customers and enable partners, Nerdio Chief Revenue Officer Joseph Landes told CRN in an interview.
“With this investment, Nerdio is super well-positioned to help organizations that adopt Microsoft DaaS management solutions in a much easier way than they ever had,” Landes said.
[RELATED: Nerdio CRO On New Partner Program And Simplifying More Than Microsoft Azure For MSPs]
Nerdio Raises $117M Series B
He continued: “We’ve been fortunate to have bet on these Microsoft technologies and have been on a way to really abstract the complexity of those technologies and make it easier for customers and partners alike to succeed.”ADVERTISEMENT
The round came from Updata Partners, a Washington, D.C.-based growth equity firm that has invested in other partner-focused vendors including Bigleaf Networks and Liongard. Nerdio has raised $125 million in total to date.
Chicago-based Nerdio, which has about 100 employees, bills its services as simplifying the management of Microsoft Azure Virtual Desktop (AVD), Windows 365 and Intune, ensuring efficient operations and lowering compute and storage costs. Users can provision and manage deployments of AVD and W365 side by side.
The company will add more executive leaders following the Series B round and grow its presence in Europe, the Middle East, Africa, Australia, New Zealand, India and Brazil.
The round comes just before the company’s annual partner conference, NerdioCon, set for Feb. 27 to March 3 in Cancun, Mexico.
Michael Coopersmith, owner of New York-based Microsoft partner Integrated Technology Systems and a Nerdio customer, told CRN in an interview that Nerdio’s portal has allowed his lower-level engineers management capabilities without giving the engineers too much access and having to build custom rules to limit access.
“The Azure Portal can be extremely complicated,” Coopersmith said. “And Nerdio’s portal made it really easy for us. So it was kind of a no brainer at that point.”
Coopersmith said he’s also appreciated the responsiveness from the Nerdio team, considering the company more of a partner than another vendor.
As part of Updata’s investment, the firm has two seats on Nedio’s board of directors. Fellow directors include former Microsoft channel chief Gavriella Schuster and Andy Lees, former Microsoft Windows Phone division president and corporate vice president of corporate strategy.
Carter Griffin, Updata general partner, told CRN in an interview that the market for AVD and desktop-as-a-service (DaaS) were part of the firm’s attraction to Nerdio.
“There’s plenty of runway in AVD and DaaS, so that will be the focus to be sure – but there are other needs both within MSPs and enterprises where Nerdio can help,” Griffin said. “Broadening out the product footprint, but also from a go-to-market broadening out the geographic footprint, there’s opportunity around the globe for what they‘ve done. And they’ve started to march down that path. But with our support, the expectation is, it will become a true global company.”
Earlier this year, Updata closed on a $608 million-plus fund. The firm usually makes a handful of investments a year, up to $100 million of equity a company. It prefers to be the first institutional capital and targets companies outside of Silicon Valley, according to Updata.
Updata’s specialty in business-to-business (B2B) software company investments puts the firm in a good position in a down economy, Griffin said. The problems companies such as Nerdio address “persist through good times and bad times.”
“The efficiency you get from DaaS, the cost savings, those don‘t go out of style and don’t get cut from budgets when times are hard,” he said.
Nerdio previously raised an $8 million Series A round in 2020 led by MK Capital – another board member – CEO and co-founder Vadim Vladimirskiy and Landes, a Microsoft veteran himself who spent more than 20 years with the Redmond, Wash.-based cloud giant.
Landes left Microsoft in 2018 with the title of worldwide artificial intelligence sales and marketing leader, according to his LinkedIn. He’s been Nerdio’s CRO ever since.
On the product side of Nerdio, customers can look forward to more offerings around Microsoft’s Intune cloud-based endpoint management service built into Nerdio for MSP, he said.
“More and more MSPs want us to continue building out tools not just for Intune but really for other Microsoft cloud technologies that they‘re betting on as well,” Landes said. “Stay tuned for Nerdio, where we’re going to make a lot of exciting product announcements. But you‘ll see us in the channel responding to the needs of partners who want to continue to bet on the Microsoft Cloud and want to do it with a company like Nerdio who really understands their needs.”
Landes’ comments align with Microsoft leadership’s on the company’s most recent quarterly earnings call when it comes to end customers wanting to optimize their cloud workloads instead of simply buying new offerings given belt-tightening in a high-inflation environment and concerns that the U.S. is headed toward a recession.
Microsoft Chief Financial Officer Amy Hood described continued “deal moderation” in Microsoft 365 plans aimed at smaller businesses during the company’s previous fiscal quarter.
On workload optimization, “we saw that across all segments,” Hood said. “If there was one segment where I may have seen it a bit more, I would say, in the small or midsize segment of the market. That tends to be more through partner[s]. We rely on partners to help customers do those same optimizations and prepare workloads.”
She continued: “If you step back and say, ‘This is how you drive ultimate share gains and build customer loyalty and help customers grow’ – I think that needs to be the focus of our teams inside the company and also the partners that we rely on to help customers do that as well.”
The potential cost savings of using Nerdio and the potential to leave a legacy virtualization vendor – such as Citrix or VMware – are winning arguments by Nerdio MSP customers in a down economy, Landes said.
“Nobody’s actually doing what we’re doing,” Landes said. “Every day, customers are saving a tremendous amount of money relative to, perhaps, other desktop virtualization technologies they‘re using by using Nerdio. And that’s a key pain point that people are feeling right now in the economy. And it makes us proud and it‘s exciting to be able to go to a customer and say, ‘Use Nerdio. We’re going to help you save between 60 percent and 80 percent on your Azure cost.”
Nerdio is now driving over $100 million of Microsoft Cloud revenue annually, Landes said.
Adopting Nerdio to grow a Microsoft partner’s AVD practice also has the potential to help partners grow their partner capability scores (PCS), a recently launched measure that determines who qualifies as a Microsoft solutions partner and who receives one of the vendor’s new designations that replace the classic Gold and Silver ones.
“Certainly, the partners that we see who are using Nerdio Manager are typically much more successful in Microsoft‘s new cloud partner program,” Landes said.