Power To The Partners: APC Outlines Channel Opportunities

APC by Schneider Electric wants partners and its channel to be a bigger part of the planning process and more hands-on in the sales trenches. To do so, the company plans to incentivize partners as they look to attack the next-generation data center market with power and cooling solutions.

CRN caught up with Marc Sherman, APC vice president, at EcoStruxure In Action, an event hosted in Chicago by APC parent Schneider Electric. Sherman dished on APC's channel plans, the competition and what partners need to do to stay on top as the data center market continues to grow. Here are excerpts from that conversation.

Looking at the channel landscape right now, what are some of the challenges partners are facing in the data center and with power and cooling?

At the highest level, for our partner base and from the communication we get back from them, [the challenge] is that for them to be successful in their core business they have to enable the technology they sell to be highly reliable and highly available. You cannot ignore how critical data center consumption is as it relates to overall energy usage. It has a little more glamour than it has probably had in the past. You almost can't look at helping a customer virtualize or consolidate – and if you look at where a customer is spending their money and how you would maximize share of wallet, the highest percentage of overall budgets are shifting to the physical infrastructure to support the technology, but to also support the application and support business process.

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We find our partners to be much more aware of this topic, this category, than ever before. Before, our business was sort of a peripheral type business. It was a nice to have. You sold a server; you sold a UPS with it. Today, the enablement of their technology to help the customer succeed and reach whatever their business goals are is very dependent on a secure physical infrastructure.

A lot of the discussion here revolved around reducing power consumption and increasing energy efficiency in the data center; how are partners facing these challenges? Are customers and clients coming to them and demanding "green" solutions or massive cost savings on energy?

It's far more relevant than it was ever before. The providers, our partners, certainly need to be armed in how to help their customers understand the dilemma here and understand how to best solve these problems. It's complex. This is a huge crisis in a sense and it's not going to be solved by any one company, any one product or any one partner. It's really, for the first time ever, a real collaborative effort.

Our providers are certainly adding the value they way we know that they know how to and are prepared to go through the ebbs and flows of the IT industry over the last 20 years. If they're still in business they know they've got to stay ahead of things that are ultimately important and on the minds of their customers, of which this category, this discussion point, is critical. Especially because everything our providers sell has a plug. It plugs in. It draws power. There's going to be an efficiency discussion to be had. And if they're not having it, somebody else is going to have it. So we say let's empower you to understand how to ask questions, how to add value on the topic and how to best utilize us to help solve the problems.

Next: How The Cloud And Virtualization Change Power And Cooling

You mention that "everything has a plug," but the shift in IT today is to enable virtualization and cloud computing. How does that impact the traditional data center, power and cooling partners?

I'll use virtualization as an example, where you're going from lots to smaller amounts of servers, essentially. What has happened is you have a lot more now at risk because you went from a whole bunch of distributed systems and now the systems you have today are at a much higher utilization. Therefore we find our customers are very interested in making sure they're highly redundant and highly available. They are now interested in larger UPS systems, more run time, greater levels of redundancy, and if you can imagine that much computing power in a small amount of space. We've talked UPSs for years, but it's the cooling. UPSs are part of the discussion, but how do we get the cooling to the right spot at the right time? When you talk about efficiency in the data center, that big traditional cooling system that was stuck in the corner to blow the whole room versus a highly packed dense set of servers where you need it right here at this spot where these hot spots are: those traditional thought processes are out the window.

For a customer to succeed at virtualizing, there's an efficiency gain. You'd think with virtualization, you're using fewer servers. But if they don't address the massive traditional cooling infrastructure and the large UPSs, the power that's powering the whole room, like most of the large UPS systems that were purchased 10 years ago, the last thing someone would want to do is undersize the UPS and run out of space. What you have in most of your customer environments is some big UPS system that has extra capacity built in and efficiency is gained by using higher utilization rates. When you're not utilizing your full capacity you become inefficient. So you have UPSs that are already inefficient because they were oversized years ago, and now you're virtualizing where you're using less power and you have these traditional power and cooling systems that might be at 50 percent of capacity. So any efficiency gain you might get from virtualizing, if you're not addressing power and cooling, you actually can't meet your virtualization efficiency goals.

How are partners making money today with power and cooling?

Back in 2002, the traditional larger data center UPSs and cooling never went through our traditional partners, our IT providers. This bigger stuff traditionally through our competition was sold direct. When we introduced InfraStruxure, an IT-centric view of the physical infrastructure where you can add in modules of three phase power, add in modules of cooling, rack-based, PDUs, software to wrap and manage the entire thing, we literally introduced something to the IT channel that was never considered. We made a huge leap in technology to innovate and create the first scalable, pay-as-you-grow InfraStruxure solution. That became a huge enablement for the channel to participate in a healthy market. You went from a $300 smart UPS system to integrated three phase power, racks, cooling, PDUs and software and the average selling price is $100,000 for the system. So step one is we're enabling these partners, by rounding out the solutions they're selling, they're now participating in this marketplace.

Secondly, on the minds of the CIO, this overall energy efficiency topic will be one of the top three things they're looking at and because the data center suddenly becomes that large consumption and if you're CIO that's what you're looking after, you will find projects as it relates to upgrading the traditional large legacy UPSs and cooling and trying to get intelligent about it. These projects are there, we just have to enable the partners to be comfortable with this topic.

Next: Sizing Up The Competition

What brings that CIO to a solution provider offering APC versus an Eaton or someone else in this market?

From a technology perspective, if you look at the key categories of the power, the cooling, the racks, the power distribution, the security, and then the services and the software to wrap it, we're the only vendor that has all of those pieces. If you look across the competition they might have two out of three or three out of four, or they might do certain things through partnership where they manufacture this, but that is a partnership. To be successful you need to be looking at all of these categories that can intelligently speak together and act as one. You can't solve power if you can't solve cooling and if you can't solve cooling you don’t know power. If you can't add visibility to it at the plug level you can't get more efficient about how to turn up certain servers. There's a whole fully integrated technology that's critical. There's a huge solution differentiator. That's within APC. When you start to bring in the Schneider portfolio it becomes very powerful.

Our partner base continues to be very loyal. They've sold us for years. They have an appreciation for us to bring them categories that our traditional competition is now bringing to them, but years ago their model never included partners. Because we're setting a precedent and showing them that it is possible to sell this stuff through partners, we still feel very comfortable with the loyalty we have from our partners.

What are some specific incentives your partners receive that they couldn't get from another power player or someone else in the cooling space?

Step one is they get access. You'll find that there are certain product categories that can't go through the channel, but you're going to find that our full company offering is enabled through our partner network. We continue to have great incentives on the front end, traditional registration programs that we refreshed recently giving providers a 15 percent advantage. So this becomes a very profitable opportunity up-front. So there are registration programs on the front end. We're spending more time investing in back end rebate programs that allow them to take some money to their bottom line, but we also reinvest some of those rebate funds into marketing for these partners. We're allowing providers to take their company name and do direct marketing through their rebate program. So they can take advantage of the marketing machine APC has to offer them. We try to look at the whole relationship; everything from financial incentives to technology to training to education, whether it's about our product or what's happening in the industry space.