NetEx Building Channel For WAN Optimization Technology
The company next week plans to unveil its first-ever channel program, one designed by one of the storage industry's best-known channel chiefs, Diamond Lauffin.
NetEx is a solid, profitable company that realizes it needs the channel to move to the next level, said Lauffin, an independent contractor who is handling the company's channel sales and marketing.
NetEx is a Minneapolis-based developer of the HyperIP WAN technology, which allows WAN performance to scale from 10 Mbytes per second to 622 Mbytes per second just by turning on software keys within the HyperIP appliance.
NetEx has a strong direct presence in the institutional market, including banks and government departments such as the IRS, but has done little business in the commercial market, Lauffin said.
In order to break into the commercial market, the company hired Lauffin to develop the company's channel plan.
Lauffin, who drove channel sales while working with storage vendors such as Simi Valley, Calif.-based Qualstar and Woodland Hills, Calif.-based Nexsan Technologies, is credited by many in the channel as the inventor of the deal registration program.
One of the planks of NetEx's channel program is deal registration, under which solution providers who register a deal before it is closed gain an extra 45 percent discount on the sale, Lauffin said.
A deal registration discount of 45 percent is one of the highest in the industry, Lauffin said.
"When VARs are in a competitive situation, the deal registration discount is often the only discount the VAR gets," he said. "That's what's wrong with most systems. So I give a smaller regular discount and a larger registered discount. It's the strongest deal registration program in the market."
NetEx is also giving solution providers the ability to make good margins on all their customers' service fees for as long as they work with the customer, Lauffin said. For instance, every time a customer purchases a software key to turn on additional bandwidth or renews its maintenance contract, the solution provider gets paid.
NetEx is also offering its solution providers evaluation units at no charge, as well as full technical and sales support, Lauffin said.
The closest NetEx traditionally came to having a channel base is reselling its WAN optimization appliances through EMC, Lauffin said. However, solution providers who sign on with NetEx will find they are easily able to compete against EMC on pricing. "With our price to the channel, there's not price competition from EMC," he said. "But VARs can tell customers, it's a fully-certified EMC solution."
Lauffin said he has no set goal in mind in terms of number of channel partners, but would like to sign up an initial group of 30 to 40 partners in a variety of verticals and geographic locations.
"In the last 15 years, I have never over-saturated a channel," he said. "I'm following the same exact success model I did at Qualstar and Nexsan."
That seems to be the case, said Steve Bishop, CTO of VeriStor Systems, an Atlanta-based storage solution provider who was approached by Lauffin this week about signing up with NetEx.
"It's a typical Diamond program," Bishop said. "He has put together a program that helps the VARs. Diamond has proven himself time and time again."
Bishop said VeriStor is still evaluating WAN optimization products from a couple of companies, including NetEx and Riverbed Technology, Fremont, Calif.
"We are getting a lot of requests around WAN optimization for data replication services," Bishop said. "We always want to evaluate as many players as possible in a new product space. So we've initiated conversations with NetEx and Riverbed. We're getting gear from both of our lab."
The HyperIP WAN optimization appliances start in price at about $14,000 to $15,000 with 3 Mbytes-per-second performance. A unit with 6 Mbps performance lists for about $20,000. The software key to upgrade a 3-Mbps appliance to 6 Mbps costs about $6,000.
Customers need a minimum of two units, one at each end of the WAN. For redundancy, customers can buy an additional two units at half price, Lauffin said.