NetApp CEO To VARs: Sell More Software Or Risk 'Being Left Behind'

In in keynote address at the company's annual partner summit held this week in San Francisco told partners that they need to increase their commitment to NetApp in order to continue to work with the company.

"You have to lead with NetApp," Warmenhoven said. "If you walk into an account with a NetApp relationship and are not leading with NetApp, then maybe that relationship will not be there in the future."

Warmenhoven said that solution providers should be looking for ways to leverage the vendor's relationships with companies such as Oracle, SAN, Symantec, and even Microsoft, which he said until recently was afraid of NetApp because of fears that increased sales of storage appliances would impact sales of its server operating system.

Solution providers who do not take advantage of NetApp run the risk of being left behind as that company continues to grow rapidly, Warmenhoven said. "If that doesn't happen, you will be a less significant partner of ours," he said. "Let's scale together."

In the storage software market, NetApp is now the fourth-largest vendor after EMC, Symantec, and IBM, all of which, unlike NetApp, have a strong backup software sales business, Warmenhoven said.

Solution providers should be seriously looking at ways to proactively increase sales of that software, he said. "Your customers ask for storage," he said. "But you sell software, too. Someone may brag about a 100-Tbyte storage deal. Yeah, but what did you sell on top of it?"

At the conference, NetApp also revealed various enhancements to its channel programs. Leonard Iventosch, who this month was promoted to oversee the company's worldwide channel sales and marketing, said NetApp is continuing to change how it works with the channel as the company proceeds towards its goal of becoming a $3 billion company by 2008.

The company has been putting in place a partner profile and mapping program to match solution providers with potential customers based on partner skills and capabilities, Iventosch said.

NetApp also recently combined channel marketing and channel sales into a single organization, hired 17 technical partner advisors in the United States to help partners with pre-sales and post-sales activities and launched new software incentive programs and lead generation programs, Iventosch said.

Going forward, solution providers can expect to see NetApp focus more on SAN sales to leverage their NetApp NAS installed base. SAN-related products account for only 5 percent of NetApp's business, but sales of SAN products are growing 67 percent year-over-year.

Also new from NetApp is an off-line quote tool that is being quietly tested by Arrow and Avnet, the company's two primary distributors, Iventosch said.

NetApp is also planning to bring more services through its channel partners, said Charlie Wallace, senior manager of channel development for NetApp Global Services.

NetApp Global Services, which in the next couple weeks will grow its channel organization to nine employees from six currently, is looking to sell and deliver services through solution providers, Wallace said. The initial move will probably come from rapid deployment services, along with services for specific applications such as Microsoft Exchange, Oracle, and SAP, he said.

On the small-business side, NetApp is adding a lead-generation program using Google search words and telephone calls to bring new opportunities for its StoreVault S500 small-business combination NAS/iSCSI/Fibre Channel appliance, said Kim Tchang, worldwide director of marketing and channels.

The company is also bringing out targeted marketing materials and other tools aimed at specific vertical markets that small solution providers can use in their own marketing, Tchang said.

This Summer will also see NetApp roll out a partnership with a Microsoft Exchange service provider aimed at helping solution providers offer Exchange as a service based on the StoreVault appliance, said Sajai Krishnan, general manager and vice president of the company's StoreVault Business Unit.

Amy Rao, CEO of Integrated Archive Systems, a Palo Alto, Calif.-based solution provider, said she has seen NetApp improve how it works with the channel year over year. "They've invested in it, and they've policed it," she said.

Rao said her biggest takeaway from meeting with NetApp execs is how fast the company is growing. "And they're going to keep growing," she said. "Our NetApp numbers are growing fast. My engineering staff says its their favorite line to sell."

Merrill Likes, president of Uptime, an Edmond, Okla.-based solution provider, said he is looking forward to seeing NetApp's new off-line quoting tool because it should be faster than the current on-line tool, and sales reps can use it when they are not connected to the Internet.

"On-line quote tools have a good purpose: Get a quote, go to order," he said. "But they can be complicated. Sometimes I have to go to this page for one thing, then this page for another."