mCloud Technologies Corp. (Nasdaq: MCLD) (TSXV: MCLD), ("mCloud" or the "Company") a provider of cloud technology solutions optimizing the performance, reliability, and sustainability of energy-intensive assets today announced it has implemented a new go-to-market plan on the back of its recent announcement it had entered a strategic partnership with Google Cloud.
As announced on October 27, 2022, this strategic partnership closely integrates and aligns the Company with Google Cloud to jointly co-market, co-sell, and deliver AssetCare sustainability solutions to customers worldwide, starting with specific customers already working with both companies globally and in the United States, Canada, UK and Europe, Saudi Arabia, Malaysia, and Japan. These activities will widen the AssetCare business and expand mCloud's customer base.
As a result of this integration, mCloud expects it will benefit from greater than 25% improvements to its cost structure beginning in calendar Q4 2022 and fully in place by end of Q1 2023. These optimizations include an approximate 25% reduction in headcount already implemented in Q3 2022, aligned with the Company's exit from its Technical Project Services business (see below), along with sustained improvements to costs associated with sales and marketing and research and development as these align with Google Cloud.
Go-to-Market Plan Specifics with Google Cloud
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Account-based sales with Google Cloud: mCloud has already taken action to collaborate and coordinate with Google Cloud to define and kick-off joint sales with key accounts globally. These joint sales activities are focused near-term on annual recurring revenue ("ARR") growth through the close of immediate AssetCare opportunities, complemented by longer-term account plans that increase account ARR through mutual up-sell and cross-sell of AssetCare and Google services.
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Exit from Technical Project Services: With joint mCloud-Google Cloud sales activities now underway, the Company decided in Q3 2022 to fully exit its Technical Project Services business in favor of focusing the Company's resources on higher-margin AssetCare growth. The renewed focus on AssetCare sales and delivery enables mCloud to leverage the continued customer access it achieved through its Technical Project Services business in western Canada. These customers are now among the key accounts being jointly targeted by mCloud and Google Cloud. The Company reduced headcount primarily in the areas of direct delivery of professional services, retaining the data and expertise from this business, which remains invaluable in the development and delivery of AssetCare worldwide.
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Retirement of low-value legacy connected assets and workers: As the Company integrates AssetCare with Google Cloud, the Company has also elected not to continue delivering or pursuing the renewal of numerous assets and workers contracted early in mCloud's history. Most of these connected assets and workers are from disparate small-box retail facilities that would not see any direct benefit from the transition to Google Cloud and relied on legacy infrastructure that will be made obsolete with AssetCare on the Google Cloud Platform. Growth from sales jointly with Google Cloud is expected to rapidly make up and exceed the minor recurring value of these connections.
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Migration and integration of AssetCare technologies with Google Cloud: Technology development activities to move AssetCare to Google Cloud are already underway. For customer applications such as AssetCare connected worker capabilities using Agnity communications capabilities, the move to Google Cloud will mean faster deployment, streamlined onboarding by way of eliminating legacy dependencies on virtual machines no longer required on Google Cloud, and a more powerful, more precise, and more robust user experience via AssetCare capabilities in the field.
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Auto dealerships focus in North America: mCloud and Google Cloud are also jointly pursuing the digital transformation of auto dealerships, aligned with mCloud's focus on delivering electric vehicle (EV) charging optimization capabilities at these facilities. Google offers unique workplace solutions for auto dealerships that translate into an even more compelling AssetCare value proposition for auto dealerships looking to digitalize their operations.
Announced on May 5, 2022, mCloud has worked with Carbon Royalty Corp throughout this calendar year to advance this growth focus. Carbon Royalty Corp has provided mCloud with the working capital to implement AssetCare at auto dealerships, including the purchase of required permit applications, hardware, and the support needed to develop carbon credits and foster the generation of carbon offsets. With the Google Cloud partnership now in place, mCloud has approached Carbon Royalty Corp with the possibility of potentially restructuring the original agreement while Carbon Royalty Corp continues to operate and manage the carbon credits and all other offsets jointly generated by mCloud and Google Cloud.
While no agreement has yet been reached and there is no guarantee such an agreement will be achieved, mCloud and Carbon Royalty Corp are working toward a mutually beneficial arrangement where mCloud returns the deployed capital used in customer deployment, permitting, and solution development, evolving the relationship to one focused around leveraging Carbon Royalty Corp's expertise to manage and develop carbon credits and carbon offsets across all joint mCloud and Google Cloud activities, tracked through AssetCare for a fixed royalty rate.
mCloud President and CEO Russ McMeekin offered additional commentary on the plan: "The nature of our strategic partnership and integration with Google Cloud includes mechanisms for contracting via Google Cloud as the contracting entity to end customers. As a result, the details of customer contracts must remain confidential in accordance with Google Cloud policies."
mCloud President and CEO Russ McMeekin offered additional commentary on the plan: "The nature of our strategic partnership and integration with Google Cloud includes mechanisms for contracting via Google Cloud as the contracting entity to end customers. As a result, the details of customer contracts must remain confidential in accordance with Google Cloud policies. As announced earlier this week, we are moving very quickly to join forces with Google Cloud in co-selling AssetCare worldwide to drive ARR growth. mCloud and Google Cloud together is truly a sum greater than its parts."
About mCloud Technologies Corp.
mCloud is unlocking the untapped potential of energy-intensive assets with cloud-based solutions that curb energy waste, maximize energy production, eliminate harmful emissions, and get the most out of critical energy infrastructure. Through mCloud's portfolio of AssetCare™ solutions, mCloud enables asset owners and operators in energy- and asset-intensive industries such as oil and gas, wind, and commercial facilities to use cloud-based digital twins, AI, and analytics to optimize asset performance, reliability, and sustainability. mCloud has a worldwide presence with offices in North America, Europe, the Middle East, and Asia-Pacific. The company's common shares trade in the United States on Nasdaq and in Canada on the TSX Venture Exchange under the symbol MCLD. Visit mcloudcorp.com to learn more.