LeftHand Gives High-Five To Channel

LeftHand Networks pioneered the iSCSI SAN market when it introduced its first IP SAN in 2001. That revolutionary technology, which allows customers to deploy SANs over IP networks, helped Boulder, Colo.-based LeftHand's systems sales grow from 750 in 2004 to nearly 6,000 in 2006.

But company founder and CEO Bill Chambers adopted another key strategy that propelled the startup to the forefront of a market expected by IDC to grow from $746 million in 2006 up to $5 billion by 2010. "We are a 100 percent channel-oriented company," he said. "All of our sales are through our channel partners."

Chambers points out that LeftHand's iSCSI SANs are powered by SAN/iQ, the company's clustering technology that allows solution providers to cluster an unlimited number of storage modules and scale capacity, performance and availability as the cluster grows.

"Once our channel partners get a toehold in the account, there are built-in repeat orders with our SAN/iQ as the customer grows," he said. Chambers noted that solution providers then could sell an array of professional services, including disaster recovery and repurposing industry standard services displaced by server consolidation into a SAN environment.

"They have a very unique approach to scalable iSCSI SAN storage," said Scott Pelletier, vice president of enterprise sales and engineering at Lewan and Associates, a solution provider based in Denver. "But the biggest thing is they protect our margins; they protect the partners who create the value. Larger vendors don't tend to do that because they don't have the account registration programs that allow you to keep that level of margin."

Pelletier said that he's lucky to make 10 to 12 points of margin on Hewlett-Packard or EMC storage products. "With LeftHand, you consistently make margins upward of 20 points," he said.

Pelletier, who has been selling LeftHand iSCSI SAN products for the past three years, also said that acceptance of the technology is moving beyond its initial SMB base and into enterprise applications. "Now that LeftHand has come out on platforms on industry-standard servers like HP and IBM," he said, "those platforms are so robust and scalable we can now bring the technology to the medium-[size] to enterprise customers, where before there wasn't as much. They were a niche player, but not as much anymore."

Chambers agrees that licensing SAN/iQ software for HP and most recently IBM servers expands the opportunity for LeftHand to grow its VAR base, which is approaching 200 solution providers.

LeftHand has a precise wish list of qualifications for potential partners. The solution provider should have an existing storage practice, a Microsoft practice, a strong focus on medium-size and enterprise accounts, a relationship with either HP or IBM and services revenue of at least 20 percent.

But Chambers said he is ever-mindful of his primary responsibility in partnering with solution providers: protecting their margins. "We want to take care that we don't over-saturate the market," he said. "But it's not too late to partner with us."

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