‘It reinforced that [Desktop-as-a-Service] technology has its benefits to quickly recover from situations like this,’ says Nerdio co-founder and CEO Vadim Vladimirskiy.

The recent faulty CrowdStrike update that downed about 8.5 million Microsoft Windows machines helped show the power of virtualization when it comes to recovering from cybersecurity incidents and outages, said Nerdio co-founder and CEO Vadim Vladimirskiy.

Vladimirskiy recounted waking up early on July 19 and seeing “this big red note” at the top of the Microsoft Azure status page that heralded a far-reaching outage. The outage has been blamed on a defective CrowdStrike update to its Falcon endpoint protection platform.

As a result, the Chicago-based Microsoft Azure tools provider was bracing itself for a very busy day, “not because we use CrowdStrike or not because our product relies on any CrowdStrike components, but because we expected that a lot of our customers will be down and they will be coming to us for help and guidance on how to remediate,” Vladimirskiy told CRN in an interview Monday when asked about the impact of last week’s Microsoft outage on his customers.

Nerdio prepared an incident war room as well as communications for its customer base, but impacted customers were able to revert to older desktop configurations without having to contact the vendor for help, Vladimirskiy said.

“We had a few customers who emailed to say, ‘Hey, you know, we were affected by the CrowdStrike [outage], but we just ran this in this process within Nerdio to rebuild all of our machines and get them back to a good, working configuration, and that worked fine,’ so we had a much lower workload on Friday than we initially anticipated.”

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The combination of virtual and remote-focused services supported by Nerdio meant that impacted customers “had an easy button” and could avoid the most troublesome part of the fix: laying hands on every machine.

“Our customers, because they were using desktop virtualization, they were using DaaS [Desktop as a Service], they were using Windows 365 and AVD [Azure Virtual Desktop], they had an easy button to recover from this without having to physically get their hands on the machine, which was really the big problem with this situation,” Vladimirskiy said. “The fix [itself] was easy; it’s the fact that you needed to [physically put] hands on every machine with your BitLocker [Windows recovery] key, which many people didn’t have.”

Vladimirskiy stressed that Nerdio is not seeking to capitalize on the disastrous event for CrowdStrike and Microsoft users. But customers saw in action how desktop virtualization and DaaS could make recovery from such an incident much easier.

“It reinforced that the DaaS technology has its benefit to quickly recover from situations like this, which we were a witness to on Friday,” he said.

Vladimirskiy shared his thoughts on the CrowdStrike incident with CRN during a conversation on the state of his company and what’s next for Nerdio. He is bullish on his company’s future, in part, because of the continued need for companies to support remote workers.

Michael Goldstein, CEO of Fort Lauderdale, Fla.-based Infotech, a Nerdio and Microsoft partner that is an honoree on the CRN 2024 MSP 500, told CRN in an interview that he has seen higher demand for Microsoft’s Windows 365 cloud PC offering and Azure Virtual Desktop, with key drivers being the fact that customers are looking to buy new Microsoft devices and the ongoing reliance on remote work.

“All the stars are aligning,” Goldstein said. “Everything that Nerdio has put in is starting to come to fruition.”

Nerdio Eyes International Growth

The vendor has more than 250 of what it calls enterprise partners—including global systems integrators such as Avanade and Tata Consultancy Services and national systems integrators such as Presidio and 3Cloud, which implement its technology for enterprise customers

More than 60 percent of its enterprise business is “empowered by a partner,” said Nerdio co-founder and CRO Joseph Landes.

Nerdio also has an MSP business to support MSPs using its technology to deliver their own services.

Nerdio should reach $100 million in annual recurring revenue “very shortly,” Vladimirskiy said. It has more than 4 million users under management, more than 10,000 customer deployments and influences more than $250 million in Azure consumed revenue a year, almost doubling year over year.

This makes Microsoft “an important partner of ours, but also makes us an important partner of theirs because we have so much leverage for them to drive a significant amount of Azure consumption,” Vladimirskiy said.

In June, Nerdio was named a 2024 Microsoft Commercial Marketplace Partner of the Year for the U.S.

The vendor has been profitable aside from an early six-month growth period that happened around its Series A round of investment, Vladimirskiy said, attributing part of the company’s success to the staying power of remote work even after the height of the global pandemic. He also credits the company’s close relationship with Microsoft.

Landes said that the vendor is growing geographically, expanding this year to Germany, the Nordic region, Brazil and the United Arab Emirates.

The vendor has been infusing more AI into its products, including a support chatbot for customers to get help from within a product—even generating code for the user—and a computer vision feature validating backups to ensure no errors.

Vladimirskiy positions his company as seeking to help Microsoft partners make sense of a complicated toolset that can help them differentiate their business from other solution providers.

Users can leverage Nerdio Manager for backup file services, file servers, networking and other infrastructure-related use cases. Lately, MSPs have been looking to Nerdio for a way to simplify adoption of Microsoft Intune as a new remote monitoring and management tool.

“The big vendors like Microsoft aren’t building tooling that’s MSP-friendly,” he said. “They’re building these big platforms like Azure and Intune that are really for their enterprise customers. And what makes that different is because these platforms are designed to set up and maintain large environments by a large group of people—internal IT for its own consumption. It’s not designed to take a small group of technicians or engineers and manage lots of small environments. And I think that’s a huge gap in the market, which is where Nerdio Manager comes in and bridges that gap.”

Vladimirskiy only sees IT getting more complex. “Ten, 15 years ago, you could have people who knew everything there is to know. Nowadays, there’s no way to know [it] all. And there’s no way to stay current without spending all of your time just staying current instead of servicing customers.”

MSPs with a large number of customers who need bespoke configuration and maintenance can see margins go down if they haven’t priced in the cost of product consumption, leaving tools running or not charging for a license.

“We’ve always said at Nerdio that complexity is our opportunity,” he said. “The more complex something is, the more opportunity we have to come in and simplify, make it easier, make it more automated. And be profitable doing that. As opposed to if everything is simple and easy, there is really not a lot of opportunity to add value. So I actually see that as a good thing for MSPs because … if it’s complex for the MSPs themselves, it’s an order of magnitude more complex for the customers. … For vendors like Nerdio, we can then go one level up from there and make the MSP’s job easier and give them more of an opportunity to build a successful, profitable practice.”

The VMware, Citrix Opportunity

Landes said that “the chaos” customers have experienced since virtualization vendors Citrix and VMware went private and merged with other vendors has been an opportunity for Nerdio—echoing recent comments from Microsoft Executive Vice President and Chief Commercial Officer Judson Althoff that VMware gave “the world the greatest gift of all” in its price and other changes since its November acquisition by chipmaker Broadcom.

CRN has reached out to VMware parent Broadcom and Citrix parent Cloud Software Group for comment.

Nerdio is aggressively targeting the opportunity and has been working with its partners to help customers trying to leave on-premises virtual desktop infrastructure (VDI) environments, Landes said. Nerdio has incentives in place for partners, including increased margins for customer migration, and is also hosting virtual and in-person training sessions.

With Microsoft’s new fiscal year starting July 1, the software and cloud behemoth has made clear that cloud migrations and migrating from Citrix and VMware are major opportunities for the ecosystem, and Nerdio has a big role to play, Landes said.

“We are the tip of the spear when it comes to moving customers over,” Landes said. “We see a very healthy number of Citrix customers every day come to us. We see a healthy number of VMware customers as well. And in the channel, we see the same thing. Channel partners who have for many years bet on Citrix and VMware are also looking to modernize their practices because they know that that business is eventually going to go away.”