CRN Interview: Network Appliance's Dan Warmenhoven

Network Appliance CEO Dan Warmenhoven recently spoke with Senior Editor Joseph F. Kovar about the company's moves to offer its products through distribution channels.

CRN: Your current 100 or so solution providers will be required to go through distribution, correct?

Warmenhoven: Yeah, that's the plan.

CRN: Why the requirement instead of a choice?

Warmenhoven: Arrow and Avnet . . . are not stocking distributors. They're really kind of virtual distributors. They have the relationship with the VAR whereby they consolidate the orders and take the credit risk. So we actually see the order from Avnet or Arrow. The product is essentially ordered directly by the VAR and shipped to their end user. And everything is built to order. So this is not a traditional stocking relationship. It's really a credit and financial transaction management relationship, which actually simplifies the whole process for everybody.

CRN: The other part about going through distribution would be to increase the number of solution providers that you work with. Are there any plans to do that?

Warmenhoven: Yes. In fact, we'd like to have Arrow and Avnet both help us to expand the set of VARs we have. We've developed 100 or so [solution providers on our own], and they've done a really terrific job over the last year since we got that program ramped. But there are regions in North America where we have very little sales coverage. We're counting on VARs and other indirect channel partners to take us into the Southeast, where we have very few people.

CRN: What kind of solution providers would you be looking for through distribution?

Warmenhoven: In verticals such as retail, for instance, which generally has a pretty strong reliance on VARs, we have no corporate focus. We would look to VAR partners to complement us in that regard.

The second [category] is those who focus on data storage and data management solutions, who can put together fairly complete configurations for customers. Typically, those are focused, we think, on midtier accounts. . . where they often have very small IT staffs and are fairly dependent on VARs to integrate a complete solution for them.

The third is regional VARs [in areas] where we have very little coverage. We have very few people, like I said, in the Southeast.

CRN: Network Appliance has the final say in terms of who actually becomes authorized through a distributor, correct?

Warmenhoven: I think technically that's correct. But essentially it's determined by Avnet and Arrow. They're really in control. Our objective was to have them build out the partnerships. And since Arrow and Avnet take the credit risk, they really have more of a financial implication here than we do.