Brocade Greets 'Year of the Channel' With New Partner Incentives Behind Campus LAN Portfolio Update

Brocade on Tuesday confirmed several additions to its campus LAN networking portfolio, a forthcoming access layer architecture called HyperEdge, and also a host of new channel incentives that add percentage points to partner deals based on the types of deals they are and how they're registered.

It's part of an ongoing expansion of Brocade's Alliance Partner Network (APN) program, which over the past few years has seen continued revision as Brocade seeks to better compensate partners using pay-for-performance metrics.

Those revisions are paying off, said Barbara Spicek, vice president of global channel sales, who told CRN this week that Brocade has in recent months recruited more than 20 new solution providers that do heavy business with Brocade competitors like Cisco and HP, and expects to add another 20 new partners this quarter.

Overall, said Spicek, Brocade will focus more on channel enablement this year than ever before, and at the company's sales kickoff last fall, Brocade's top executives declared 2012 the "year of the channel." Brocade has now reached a point where about 65 percent of its sales go through partners, Spicek said, and the company's sales force has been charged with getting that number to 80 percent by the end of the year.

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"This push will get us to a maximum of 20 percent direct-fulfilled by the end of this year, and that plan has been endorsed by our chief executives," Spicek said. "We've seen tremendous results in the channel so we're putting stakes in the ground."

On the product front, Brocade on Tuesday launched two new ICX switches, and also confirmed the upcoming release of HyperEdge, a new Brocade technology said to provide smoother automation and simpler management of campus LAN networking products.

HyperEdge offers single-point control for managing a customer's entire access-switching infrastructure as if it were a single device, and also enables what Brocade is calling "mix and match stacking" for delivering connectivity and services out of a stack of edge switches. The technology will be available for Brocade's stackable switches, including its ICX and FCX models, with a software upgrade. It is scheduled to debut next year.

"We're strongly promoting a rearchitecting and simplification of the access layer," Spicek said. "We see that as an area where there hasn't been too much innovation in a long time."

The new ICX switches are the ICX 6430 and ICX 6450, both of which offer stacking capabilities and Layer 2 and Layer 3 functionality, and are enabled for features such as energy-efficient Ethernet and MACsec encryption. They come in 24- and 48-port 1 Gigabit Ethernet models and can stack up to 384 ports. Brocade first introduced the ICX line last fall, starting with the ICX 6610 switch.

Both the ICX 6430 and 6450 models are available now, starting at a $1,295 list price. Brocade further confirmed that multichassis trunking capabilities are now available for its FastIron SX family of switches.

The latest updates to Brocade's channel program are intended to encourage partners to be more aggressive about Brocade campus LAN product sales, Spicek said, specifically the ICX lines. Brocade also has teed up a virtual launch and a Webinar for the ICX products, scheduled for today, and for which Spicek said had more than 2,000 channel partners registered.

Among channel incentives, APN partners will receive an additional 3 percent on registered deals of ICX equipment on top of what they'd already qualify for, meaning that partners at Brocade's Elite level could see discounts north of 15 percent. Brocade is also running a promotion, through July 13, 2012, through which customers can acquire a third switch for free if they buy two ICX 6450 or 6610 switches.

Brocade also has begun aggressively discounting its campus LAN demo wares, and will now offer 85 percent off of the list price of demo equipment to all Brocade solution providers. Previously, Brocade partners saw a 50 percent discount on that demo equipment, and they can also further defray its cost by applying market development funds (MDFs) toward its purchase.

Partners will also see additional discounts and other incentives under its Value Incentive Programs (VIPs), including back-end rebates, Spicek said. Last, there is a new APN training site on the MyBrocade portal specific to campus LAN sales, and a new technical accreditation, the Brocade Accredited Campus Networking Specialist, available to partners seeking Brocade Layer 2/Layer 3 Ethernet expertise.

NEXT: Brocade's Channel Ramp-Up

Spicek said her team has been steadfast in tracking how its aggressive discounts and performance metrics translate to channel gains, and that effort has turned up some interesting data.

For example, the revenue contribution by Brocade's baseline Select partners -- the entry-level resellers that are part of its program but don't constitute its upper partner echelons, Elite and Premier -- has increased by 28 percent year-over-year. Spicek attributed that gain to Brocade's strong recruitment and the work of its distributor partners, particularly Avnet, with whom Brocade has become especially aggressive with targeted recruitment campaigns.

Partner recruitment has been steady. Brocade now has about 8,000 base level, or Select, partners -- up from 6,500 a year ago -- and expects to keep adding about 1,000 per quarter, Spicek said. Its top-level partner tiers, Elite and Premier, comprise about 350 solution providers.

It's also seen good traction with recent programs such as Brocade Network Subscription, which allows customers to pay for their network infrastructure on a monthly basis without a term limit or capital lease agreement. Spicek said that Brocade partners have about 25 active deals going now with the subscription program, and Brocade is also now providing a 10 percent finder's fee for partners that close successful subscription deals.

The program benefits -- partners who feel like they're taken care of, Spicek said, with demonstrated financial compensation -- have lured a number of partners who might have spurned Brocade in favor of Cisco or HP in the past.

"There is a lot of frustration in their channel," Spicek said. "The problem with these other vendors is they have become so overdistributed that, for a channel partner, it is very difficult to differentiate. They see Brocade as a true alternative, and we're going to make that alternative very rich for them."