Compaq Commits More Money And Programs To Storage Channel

Compaq Computer

Compaq, which IDC late last year called the largest storage supplier in terms of revenue, units shipped and terabytes shipped, is looking to expand its market share by increasing the resources offered to its enterprise solution providers.

Compaq plans to spend about $26 million more on rebates and market development funds for storage solution providers this year than it did in 2001, said Mark Gonzalez, vice president of North American enterprise storage for the company.

The majority of the benefits from those funds and other new programs will be aimed at partners with a proven track record of beating EMC, Gonzalez said.

Starting in February, Compaq will allow its 360 authorized enterprise storage solution providers to register potential deals for up to six months to protect them from poaching by other solution providers, Gonzalez said. Only the registered solution provider will be eligible for bonus Compaq dollars from that deal, he said. Higher bonuses will be given if the deal includes Alpha servers, he said.

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This month, those solution providers also became eligible for a rebate of more than 5 percent for sales of NAS products. Compaq expects to release new entry-level and midrange NAS subsystems next quarter, said Gonzalez. The rebate is similar to one Compaq has been offering for storage management software sales since the second quarter of 2001.

Up to 50 of Compaq's top partners are in the process of being designated as enterprise storage solution specialists, or ESSS, Gonzalez said.

ESSS partners will receive twice the MDFs of other enterprise VARs and will be able to resell and deliver Compaq storage services, said Gonzalez. Other ESSS incentives will include training vouchers, access to specialized technical resources aimed at closing major deals, and early access to long-term product information, he said.

With the training and certification requirements, Compaq has drawn a very hard line on membership in the ESSS program, Gonzalez said.

It's not easy to become an ESSS, which suits Rich Baldwin, president and CEO of Nth Generation Computing, a San Diego-based solution provider and one of the first to get the designation.

To qualify, Nth Generation had to have several of its engineers certified and accredited, which consisted of taking them out of the field and putting them into the classroom for several weeks, Baldwin said. Revenue requirements were also high, amounting to approximately $400,000 in enterprise storage product sales per quarter, he said.

"It's really got us excited because [it's something that isn't for the masses," Baldwin said. "It is for the guys that make the investment and focus their business and their resources on a particular market. . . . I think there's only two or three partners in the West that are actually at that level, which is a lot different than in the past where there might have been 100 or 200 enterprise resellers in the program."

The ESSS and other enterprise storage programs have been long in coming, but worth the wait, said Mark Romanowski, senior vice president of client services and business development for AMC, a New York-based solution provider which expects ESSS certification shortly.

The requirements are tough, but ESSS certification proves AMC is one of the best, said Romanowski. "There are a lot of storage resellers out there," he said. "But that's the problem. They're resellers, pushing boxes like PCs. . . . If you want to sell a technology solution like [storage, you have to step up to the plate."

Protection for potential deals is important, as it helps make sure investments in developing a client are not wasted, Romanowski said. "You have people like me who invest in designing storage with the customer," he said. "Then some stupid purchasing manager goes out and bids for the lowest price."