Remember when nobody thought you could make money on Google(s goog) Apps? Cloud Sherpas’ backers apparently don’t agree. The Atlanta-based company — which sells Google Apps and Salesforce.com(s crm) and integrates them with other software, just netted $40 million in a Series B round, bringing total funding to about $80 million.
Google reportedly earned $1 billion on Google Apps last year– a number the company won’t confirm. If accurate, that figure pales in comparison to revenue from Google’s gigantic search-and-advertising business, but it’s not chump change either, and indicates that Google Apps now constitutes a “real” business. Cloud Sherpas CEO David Northington told me many companies are opting for Google Apps instead of re-signing pricey enterprise licensing agreements for Microsoft Exchange (S msft) and Office. (Let’s stipulate that Microsoft would dispute that.)
Most Cloud Sherpas’ accounts are companies with 1,000 to 10,000 employees “but the entire market is ripe for Google adoption,” said Michael Cohn, Cloud Sherpas’ SVP of marketing. “Many are coming from on-premise Exchange, some from Lotus(s ibm) Notes and a few education and government accounts from Novell Groupwise.”
Cloud Sherpas is also buying Cloud Trigger, a San Diego-based Salesforce.com “platinum” implementation partner in a move that will give it a bigger West Coast presence and more hardcore Salesforce.com expertise. The addition will bring total headcount to 350 from 300, said Northington. Terms of the deal were not disclosed
Northington said the company has been in investment mode for the past year or so but is now on the verge of profitability.
The just-closed Series B round includes contributions from new investors Greenspring Associates and Queensland Investment Corp., along with existing backers Columbia Capital and Delta-V Capital. The money will help Cloud Sherpas keep up with what it calls booming demand for cloud-based applications and services and to tie them into customers’ legacy software.