NetApp Signs CDW For Small-Biz Array, VARs Not Worried

NetApp's small-business sales are growing fast, but the company has yet to reach all the places where customers purchase storage, said Sajay Krishnan, general manager and vice president of the NetApp's StoreVault Business Unit.

"We are challenged in terms of coverage," Krishnan said. "We have 400 partners and are doing well, but a certain class of customer goes to CDW."

However, Krishnan said, NetApp's arrangement with CDW should actually benefit the rest of his company's channel partners.

"We don't spend a lot on awareness marketing," he said. "CDW is a place where a lot of people go. This will get us notices, drive traffic to NetApp and maybe give us more leads we can pass on to the channel."

Krishnan said he knows that his company's other solution providers might not like competing with CDW to sell the company's StoreVault line, which was introduced last June.

"StoreVault is not like buying a $1,000 or $2,000 switch," he said. "It needs a certain level of competence. Sure, our partners will not be happy we sign with CDW. But VARs will gain from awareness via CDW. We're bloodying the waters and will attract more customers to our channel."

Because CDW is bound to the same deal-registration program that other solution providers get, partners that register a deal will get the registration discount that will enable them to beat CDW on price, Krishnan said.

"If a solution provider gets access to a deal before CDW, CDW can't beat the deal," he said. "So unless CDW is willing to sell below its costs consistently because StoreVault is so wonderful. . . ."

Kevin Urso, president of Connected Technology, a Great River, N.Y.-based solution provider that first tested the small-business storage waters by signing up with NetApp, said he is mixed about NetApp's new CDW relationship.

"Part of it is good, because it gets NetApp's name out there," Urso said. "When I talk to small businesses, they know EMC and Dell, but not NetApp."

However, many customers buy products from CDW make their decision just from reading a catalog, Urso noted. "For people who contact NetApp, the leads may be passed to the VARs, so that's good," he said. "But at many of the school districts, they may see it in the catalog and purchase it before checking with me even thought I can get a better price."

Merrill Likes, president of UpTime, an Edmond, Okla.-based solution provider, agreed that it takes a lot of effort and expense for a company like NetApp to get the attention of small-business resellers. "Just announcing the product and everybody will come running is just not going to happen," he said.

It's important for NetApp to get its name out into the small-business market, Likes said. "We don't want them to go for two years and then shut down the product because of lack of volume," he said. "They need to find ways to sustain the product line."

The biggest problem channel partners will have against CDW is their own speed of closing business, according to Likes

"CDW won't have much impact on resellers as long as they follow the rules and register," he said. "If they are presenting to a customer, they need to go back right away and register before taking the P.O. [purchase order]. So it will be a challenge to resellers who aren't prompt to register deals."