IT company boosts gross profit by 20 percent year-over-year with managed cloud services

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CESCOM (formerly 1tegration) retains customers by helping them take advantage of IT advances as soon as new technology comes to market. Realizing that its mid-sized customers could benefit from cloud computing, CESCOM began offering managed services on the Microsoft Azure cloud platform through the Microsoft Cloud Solution Provider (CSP) program. By offering its customers convenient cloud services, including pay-as-you-go pricing, CESCOM is expanding its business and increasing profit margins faster than ever.

Building long-term customer relationships has always been the key to success at CESCOM, a Microsoft Gold Cloud Platform Partner headquartered in Denmark. Opening its doors in 2005, CESCOM established itself as a service-focused infrastructure and systems integrator for mid-sized businesses, retaining almost every customer since then. CESCOM acts as an IT thought leader for new and existing customers by translating the latest hardware and software trends into solutions that meet customers’ evolving needs.

Most recently, CESCOM saw an opportunity to help its customers drive agility and productivity while reducing infrastructure costs—the Microsoft Azure cloud platform. CESCOM now offers Azure services through the Microsoft Cloud Solution Provider (CSP) program, which helps the company directly provision and manage Azure subscriptions and take end-to-end ownership of the customer life cycle.

“It was a change from our original infrastructure business, but after we migrated our servers to the Microsoft cloud platform in 2015, we wanted to pass along the same agile, cost-effective computing model to our customers,” says Jan Pedersen, Chief Executive Officer and Partner at CESCOM. “We are excited to see such a positive response in the market.”

Accelerating business

After adding Azure services to its list of offerings, CESCOM has seen unprecedented growth. “Since January 2016, when we joined the CSP program, our annual revenue has increased by 74 percent,” says Pedersen. “We’ve seen monthly revenue from Azure in CSP grow from USD12,000 to USD51,000 in a little more than a year. And in terms of gross profit, we’ve seen 20 percent year-over-year growth.”

CESCOM credits this success to extending its infrastructure expertise into the context of infrastructure as a service (IaaS) in the Azure environment. Today, the bulk of its managed services business comes from migrating customers to the Azure environment. “We mainly offer IaaS where we provide fully managed hosting services, including our backup solution using Microsoft Azure Backup,” says Rasmus Treumer, Chief Sales Officer and Partner at CESCOM. “Through Azure in CSP, however, we’ve added new managed services that take advantage of different opportunities within the program.”

Treumer continues, “When we sell Office 365 with Azure, we get a 12 percent incentive from Microsoft, so we’re seeing a 32 percent increase in gross profits for that line of business. In fact, for every dollar we generate in Microsoft revenue, we generate five-and-a-half dollars in all-up revenue.”

Migrating efficiently to the cloud

CESCOM helps customers move quickly to the cloud through its migration service that gets the job done in two efficient steps: the company uses the Microsoft Assessment and Planning Toolkit to evaluate a customer’s IT environment prior to migration, then creates a simulation of the new Azure environment for the customer to test before going live.

“The last time we performed our migration service, we moved 1.5 terabytes of data to the Azure environment in less than two hours,” says Treumer. “We expect a surge in this business when we launch a new service on our website, called the Configurator. Customers will be able to enter the number of servers and applications they have in their environment, and we’ll show them how much they could save by moving to Azure.”

To continue its commitment to customer service amid tremendous growth, CESCOM hired an additional six staff members and created a new training program with educational videos hosted in Microsoft SharePoint Online. “Everyone posts their areas of expertise on the intranet, so if a customer calls with an issue, our technicians can quickly find the right person to resolve it,” says Pedersen.

Scaling to a new level of savings

With Azure in CSP, CESCOM can offer its customers pay-as-you-go pricing, which showcases the scalability inherent in the Azure platform and gives customers control over their cloud-computing costs. It also drives a competitive advantage for CESCOM.

“We take advantage of ‘stop-and-start’ Microsoft Azure Virtual Machine services, so our customers get the full benefit of the platform’s scalability,” explains Pedersen. “If a customer runs virtual machines full-time from Monday to Friday but not on the weekend, we turn them off when they’re not needed. Because of this, some customers end up paying only 29 percent of the list price. We’ve got customers running Microsoft SQL Server 2016 Enterprise on a virtual machine that they need only twice a month. With our service, they pay only a fraction of the regular monthly charge you’d get with a traditional cloud service provider.”

Expanding into new markets

CESCOM uses Azure in CSP to solve different problems for larger customers. For example, it is working on a proof of concept for a large Danish television company, using Microsoft Azure Machine Learning in an IoT scenario to collect data from customers’ TV remotes to better understand people’s viewing preferences.

CESCOM also offers solutions for customers with high-performance computing needs and heavy graphic rendering requirements. With access to the G-series size of Azure Virtual Machines, CESCOM customers run the large applications they need in the cloud at reduced costs. “Even though G-series virtual machines are more powerful and expensive, customers enjoy a low total cost of ownership because they can work faster and smarter,” says Treumer. “When you factor in the pay-as-you-go billing, customers save even more money. It’s a win-win scenario for us and for our customers.”

As a partner in the local program Microsoft Azure2Go, CESCOM works with Microsoft to win new business. Under this arrangement, Microsoft migrates the first five of a customer’s workloads for free, and CESCOM then offers managed cloud services at an attractive price, including four days of Azure readiness training and Microsoft Services Premier Support. “With Azure in CSP, we’re winning new business in new and established markets,” concludes Treumer. “There’s virtually no limitation when it comes to the scalability and agility of the Microsoft cloud platform.”