NetApp Puts Feet On Street, Expands Channel Programs

The Sunnyvale, Calif.-based storage vendor is also starting its new fiscal year with significant additions to its channel program including new specializations, certifications, hosting partnerships, and better support for federal government partners.

NetApp is currently in the process of hiring several hundred new sales reps worldwide, especially in the U.S., said Leonard Iventosch, vice president of global channels for the vendor.

NetApp started the hiring push very aggressively last quarter, with the majority of the reps heading to the company's commercial market team where the business is done exclusively through the channel, Iventosch said.

"It's our belief that, if we are heading into a recession, we should be hiring now so we will be stronger coming out," he said. "The same thing happened in 2001."

John Zammett, president of HorizonTek, a Huntington, N.Y.-based solution provider, welcomed the NetApp hiring move because the vendor's reps are so busy that partners lose opportunities.

"HorizonTek lost about a million dollars in potential business over the past two years because we couldn't get help from our local vertical reps," Zammett said. "The hiring of hundreds of reps across the US will most likely be a major benefit to the channel. The only complaint we have about our NetApp relationship is not their selling direct but that we can't get the help we need in opportunities we uncover."

Another NetApp solution provider said off-the-record that the hiring is not consistent across all territories. "They are going to rely on the channel more than ever before. [It's] all good," the solution provider said.

One top NetApp goal for its fiscal year, which started April 29, is to build and implement a partner hosting program under which NetApp plans to bring together its smaller solution providers with large hosting partners, Iventosch said.

The program is different from that of other vendors such as rival EMC, of, Hopkinton, Mass., which offers its own in-house hosting platform which competes with the hosting business of its solution providers, Iventosch said.

"We help our hosting partners go out and get customers," he said. "One aspect of that is, some of our larger partners with their own data centers are willing to set up hosting centers for smaller partners to either resell hosted services or to host their customers' applications. NetApp is not getting into the hosting business. We want partners to work with partners to go out and sell hosting, disaster recovery, and on-line backup."

The program is a good opportunity for NetApp to expand its footprint with its largest partners while helping its other partners with opportunities for recurring revenue, said Rolf Strasheim, director of client solutions at Peak UpTime, a Tulsa, Okla.-based solution provider and NetApp partner.

"Recurring revenue, that's the Holy Grail," Strasheim said. "If the program is broad enough and executed well, it's good for VARs and our customers. As long as NetApp puts resources behind it, it makes sense."

However, Strasheim said, he expects there to be regional differences as to how well the program works. For instance, in his state of Oklahoma, lower energy prices and lower real estate costs compared to the West Coast and East Coast mean that local customers are not as rushed to embrace services to cut costs.

NetApp is also changing parts of its channel program to reward partners for certain activities rather than just for large sales volume, Iventosch said.

For instance, it is expanding its Star level, the highest level in its program, to include more regional solution providers who often reach sales volumes similar to those of larger national partners.

Peak UpTime is one of those regional partners, having just received Star level in the last couple weeks, Strasheim said.

NetApp also added a new lower tier to what had been the three tiers of its channel program. The new silver level has no volume requirements, with some solution providers at this level selling one or two $5,000 units per year, Iventosch said. "We make it easy for all to join," he said. "A year from now, will we change? We might."

The new silver level comes in the wake of NetApp's decision to meld its StoreVault business unit back into the company as a whole.

The company introduced entry-level StoreVault storage appliances two years ago this month, and set up a separate business group with its own channel to handle the product line. However, the company has recently brought the StoreVault business back within the NetApp-branded businesses, including the 800 or so StoreVault solution providers, of which about 90 percent were in the U.S.

"This move makes it easier for partners in the midrange to have access to both the StoreVault line and our FAS2000 product line," Iventosch said. "We believe a significant number of StoreVault resellers will come in at the silver level and start selling FAS2000 appliances as well."

That was a good move on NetApp's part, especially since NetApp has recently rebranded the entire company from its previous Network Appliance brand, Strasheim said.

"I think it has a lot to do with NetApp's branding and new logo," he said. "There was a mixed message to the buying public who may have felt they were dealing with two companies. One customer I talked to about StorageVault once said, 'No, I want a real NetApp.'"

NetApp also added a new specialization to its channel program around server virtualization under which a partner which gets certified with the technology will get access to additional leads and field support as well as a bonus rebate when selling server virtualization with NetApp storage, Iventosch said.

The new specialization is currently focused on VMware, of Palo Alto, Calif., but could also be expanded to include Microsoft, Redmond, Wash., and Citrix Systems, Ft. Lauderdale, Fla., he said.

VMware said earlier this month that it is making such bonuses available through several vendor partners, including NetApp, to help encourage more bundling of its server virtualization technology with other products.

NetApp has been offering such bonuses for a couple months, and has found them to be successful incentives, Iventosch said. "Our finance people are complaining that we paid out in six weeks what we had budgeted for six months," he said.

Peak UpTime has already started taking advantage of that program, Strasheim said. "It forces us to put an additional focus on integrating NetApp and VMware, and that's a good thing. There is a YouTube video out there showing how to provision 100 servers with NetApp. That really impresses a customer."