Sheepdog Inc., the Halifax company specializing in cloud-based software development, will focus on organic growth in its Sheepdog Labs division now that it has laid off most of its 13-member sales and marketing division, CEO Brandon Kolybaba said in an interview Wednesday.

Sheepdog is structured into two main divisions — the first is a venerable reseller of Google Apps, and the second, Sheepdog Labs, is a development business that builds cloud-based software for clients, ranging from small business to some of the world’s biggest companies.

Kolybaba said the company last year hired a top-flight sales and marketing team, including staff in Toronto and Calgary, to boost the revenues of the company. By the spring, it became obvious that there wasn’t enough money coming in to carry the unit, so Sheepdog in the last six weeks has had to give notice to most of the sales and marketing staff. He added that Dave Tzagarakis and Jeff Fader remain on the sales team.

“The story is that we took the risk to swing for the fence and we struck out, and I’m proud of the effort we made,” said Kolybaba. He added Atlantic Canada is known for its aversion to risk and he hopes the community will understand that not every investment pays off. Sometimes companies — even really good companies — have these sorts of episodes.

Sheepdog now will focus on “organic growth,” especially in the Sheepdog Labs division, said Kolybaba, meaning it will use its engineering team to do work for large clients and generate leads from referrals and networks of its clients.

Sheepdog Labs’s clients have included Microsoft, Cisco and LinkedIn, and it helped to develop the software for Xobni, an email and address book management company that Yahoo! Inc. purchased for a reported $48 million, plus incentives, this year.

Kolybaba said the Sheepdog Labs team comprises about 10 engineers who have worked together for seven or eight years, and he said they’re as good as any software engineers in the world. The team has remained intact through the recent layoffs.

Sheepdog itself was one of the first eight resellers of Google Apps, and is one of only two of these original eight that is still independent and offering the service.

Kolybaba, meanwhile, said he is continuing to push forward with his new company Cloud A, which offers a flexible infrastructure-as-a-service solution over the cloud for Canadian customers.

Kolybaba and Dynamic Hosting founder Jacob Godin teamed up last year to form Cloud A, an OpenStack-based elastic platform in which all the data is stored in Canada to take advantage of the country’s privacy laws. It offers clients cloud-based infrastructure, but all the hosting is done in Canada.

Kolybaba said the company will launch its product in September, and is now examining how it will fund its growth. He estimated Cloud A will have to raise about $500,000 in seed funding.