Eaton Changes The Power Game With Software Sales Offensive

Eaton is shaking up the power management market with an all-out software offensive aimed at driving software, services and recurring revenue for mid-market data center-focused partners.

With the launch of the new Intelligent Power Manager (IPM) software version 1.52 on Feb. 1, the datacenter business unit of the $23 billion behemoth is launching a "monetizing software" initiative aimed at driving high margin software and services sales growth for partners.

Under the program, Eaton expects a $1,500 UPS for a mid-market office data center closet to drive $9,000 in additional revenue for its partners, including $6,750 in software licenses, installation and consulting services along with $2,150 in annual recurring revenue centered on power management monitoring and business risk avoidance.

[Related: Eaton Partners Can Increase Sales Three-Fold With Software And Services]

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"Eaton is providing us with a new category of service we can provide," said Kevin Mullin, vice president of business development for A-TRAC, a Waltham, Mass.-based solution provider building a recurring revenue services model around Eaton's IPM software. "A lot of vendors talk about services. Eaton is actually doing it: providing a physical product, a software based platform and the tools and training to do an assessment, make recommendations and pull it altogether into a new services offering."

A-TRAC is planning on using the VMware vRealize IT Operations Management functionality in IPM version 1.52 to bring a power manager data center assessment and monitoring service including alerts centered on critical UPS functionality. "Eaton has a full suite of tools for us so we can provide the front end, middle and back end of the sale," said Mullin.

The Eaton offering is centered squarely on software-defined data center power management, providing customers mission-critical "visibility" into the data center. The Eaton IPM software provides proactive monitoring to avoid outages with integration with VMware Site Recovery Manager and Microsoft live migration. Eaton has also established power management links to fast growing next-generation hyper-converged offerings from SimpliVity and Nutanix.

"No one else is doing what Eaton is doing in the power category," said Mullin. "We are always looking for differentiation and new technologies like this that will empower our customers." Mullin expects the Eaton software focus to help drive another year of double-digit growth in the mid-market data center power segment for A-TRAC. "This software platform is going to allow us to effectively build recurring revenue around monitoring and managing power assets," he said. "We are certainly expecting to grow our recurring revenue by being able to offer this solution."

Herve Tardy, vice president and general manager of distributed power quality for Eaton, said the company has upped the price of IPM to drive higher software and services margins for partners. Under the new pricing model, a 100 power node IPM license is now priced at $5,000, up from up from $1,500, while the unlimited license is now priced at $10,000, up from $3,000.

"What we are bringing to market is a channel-centric and channel-friendly model so partners can really make money at this," said Tardy. "The channel partner has the ability to make $5,000 [on an unlimited software license]. I don't think partners have a lot of products where they can make $5,000."

As part of the software charge, Eaton is also implementing what it is calling a full "lifecycle management" power management services. That opens the door to services around the installed base of power management devices. Previously, Eaton partners could only sell a warranty service with a new Eaton UPS.

The new version of IPM puts partners front and center in customers' data centers, making sure all the VMs (virtual machines) that have been added are covered by a business continuity software plan, said Tardy. The question customers need to ask, he said, is whether VMs are "connected with the IPM software" to assure a "full level" of business continuity.

"This is an easy opportunity for partners to get back to their installed base to sell a [power management] tune up service with IPM," said Tardy. In addition to moving VMs to a secondary site in the wake of a power outage, IPM can also be used to provide power management cost savings via a monitoring service aimed at optimizing power management efficiency.

The software offensive is a watershed moment for Eaton which has doubled the number of software engineers on its R&D team over the last several years. Software now represents about 20 percent of the company's total R&D budget with hundreds of software engineers working on IPM and future software products.

The software charge comes with Eaton's 500-strong datacenter sales force working hand-in-hand with partners to drive mid-market data center sales around IPM, said Curtiz Gangi, sales vice president of the channel datacenter segment for Eaton. He said Eaton is going to be doing "database mining" with partners to help drive sales opportunities.

"The channel is now part of our DNA," said Gangi of the datacenter sales offensive. "Those 500 [Eaton technical and sales] folks are helping channel partners solve customer problems. In the last couple of years, the channel has become our growth engine."

Gangi said he sees IPM powering a comprehensive "digital assessment" of the health of the data center network and power environment. "This gives VARs the opportunity to upgrade or refresh the environment based on the needs of the data center," he said. "That is a consultative approach to our business. That is huge."