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Public cloud growth continues as rhipe realises Asia potential

James Henderson | Feb. 17, 2017
Distributor sets sights on South Korea as APAC expansion continues

"The public cloud market continues to grow in the mature APAC market with SaaS as the primary growth segment," Gartner research director, Sid Nag, said.

"Organisations are pursuing a cloud first strategy focused on migrating software applications to the cloud driving this growth."

Nag said the growth in cloud management and security services is testimony that cloud related services, in addition to the core cloud services, are critical to cloud adoption.

"Organisations will look for increased automation and management of these cloud assets, as well as focus on the security aspects of consuming public cloud," he added.

Investment

More generally speaking, for the half year ended December 31 2016, rhipe reported revenue of $72.5 million, up nine per cent year-on-year with licensing revenue up 12 per cent at $70 million.

In addition, rhipe delivered a net profit of $15K compared to a net loss of $772K in the prior year, with the company's return to profit following a period of "significant investment" overseas, particularly SEA through the Microsoft CSP program.

According to financials, the significant majority of the company's revenue during the half year came from monthly annuity based licensing revenue generated from more than 2,000 technology service provider customers.

The growth has been primarily driven by the company's 'tail' customer base - excluding the largest top ten customers - which provides more than 90 per cent of gross margin, growing more than 20 per cent year-on-year.

Following such strong growth rate, gross margin in licensing also increased slightly from 15.2 per cent to 15.8 per cent.

Specifically, rhipe reported licensing revenue growth of 12 per cent year-on-year with growth of more than 20 per cent in the more profitable tail customers.

Meanwhile, strong growth in CSP operations with revenue of $5.2 million in six months compared to $0.5 million in the prior year comparative, with a current annualised run-rate revenue of more than $14 million.

Looking ahead, the distributor said revenue growth will continue to be generated by the annuity subscription based revenue streams, which benefit from new product offerings, new geographies and increased end-user cloud demand.

 

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