NetApp Sweetens The Pot For Partners

To that end, NetApp has introduced some changes to its channel program, retroactive to May 1, said Leonard Iventosch, who was recently promoted to vice president of worldwide channels at the Sunnyvale, Calif.-based storage vendor.

"There are some things we added that I am stunned that we could add," Iventosch said.

One major change is how NetApp calculates rebates for its star-level partners in order to help them qualify more quickly for extra rebates for meeting goals.

Previously, NetApp and its partners set a base goal based on growth over the previous year and other conditions, along with a stretch goal. Meeting the base goal qualified the solution provider for a certain rebate, with an extra rebate available after meeting the stretch goal, Iventosch said.

Starting this month, solution providers will no longer be required to meet the stretch goal to qualify for the extra rebate. "Now, if they meet the base goal, they get a 'kicker,' " he said. "Then, anything over that, we pay the extra rebate right away."

The change is also aimed at helping partners push sales into the next quarter, Iventosch added. "Before, if they made the baseline goal and then 90 percent of the stretch goal, they got nothing extra for the effort," he said. "They might push sales into the following quarter to get the rebates."

NetApp also introduced a competitive take-out program in which the target competitor varies from VAR to VAR. Over the next few weeks, NetApp plans to talk to partners about which competitors they want to take out and offer additional rebates for competitive take-out sales for the rest of the year, Iventosch said.

The goal of the program, which targets deals with a minimum size of $250,000, is to go aggressive against certain vendors without disrupting partners' business models, he said.

"If the partners sells us and Hitachi Data Systems, we don't want them to drop Hitachi," Iventosch said. "We talk about what it will take to take out EMC in an account. Or if the partner sells NetApp and EMC, we'll talk about how to take out HDS. What we don't want to do is go to a partner with a significant business and do share-shifting."

Also new is FastPath, a program to pull entry-level gold partners to the platinum level as quickly as possible, Iventosch said.

Under FastPath, NetApp is picking up to 30 new NetApp solution providers that show strong potential to enjoy the benefits of being a platinum partner, including all the extra rebates, as they get up to speed with the company. Avnet and Arrow, which distribute NetApp's products, also have similar programs for potential partners that did not qualify for FastPath, Iventosch said.

"So the only gold partners not in FastPath or in Arrow's or Avnet's program are those who do not feel we are a strategic partner," he said.

Rick Marcotte, president and CEO of DLT Solutions, a Herndon, Va.-based NetApp partner, called FastPath one of the industry's best channel programs.

"NetApp is not afraid to put its money where its mouth is," Marcotte said. "Look at FastPath. Very rarely does a vendor go to a reseller and say, 'We've ID'd you as a rising star,' and then provide rebates and training to help it rise to the next level. It's very smart of them. We're late to NetApp. Yet it's interesting that they are treating us with marketing funds, rebates and training to help us rise to the next level."

NetApp is also providing free training classes for its Accredited Storage Architect Program, which previously cost VARs $2,000, according to Iventosch. However, solution providers still pay the $150 test charge, he said.

Also new is a series of application rebates whereby solution providers that sell specific NetApp products tied to certain applications qualify for additional rebates. It's a fixed-dollar rebate based on the size of the deal, not on the selling price, Iventosch said.

The first rebate is available to solution providers that sell NetApp's Snap Manager for Oracle into an Oracle environment. "We will almost certainly be adding Snap Manager for SAP going forward," Iventosch said.

For DLT's Marcotte, those application rebates look good. "We're one of the largest Oracle partners," he said. "We're looking at ways to bring NetApp to add value to Oracle databases. We think there's some acceleration in this program that will bring NetApp into Oracle environments."

Many of the changes to NetApp's program are aimed at simplifying how solution providers do business with the vendor, Iventosch said.

"Our goal is not to create a complicated partner program where the partner needs to jump through hoops," he said. "We're still seen as having strong up-front margins. We want to keep them while looking at what else we need to do to increase partner business."

Marcotte called NetApp a strong channel player. "NetApp probably has one of the best channel programs in the industry," he said. "First of all, the fact that it has written everything down clearly with all the rules is a huge thing."