Network Appliance To Channel: We Were Wrong, We Do Need You

The effort features channel-neutral direct sales compensation and bigger partner discounts. "The Network Appliance channel program is open for business," said Leonard Iventosch, senior director of worldwide channel sales at Network Appliance. "That was not the case a year ago."

One change is that Network Appliance will no longer insist that its solution providers refrain from carrying competing products, Iventosch said. "Our attitude over the years was, if a partner worked with our competitors, we did not want to work with them," he said. "We found that to be a great strategy for keeping channel sales low."

Amy Rao, CEO of Integrated Archive Systems, a Palo Alto, Calif.-based solution provider that has worked with NetApp for four years, said the vendor is not merely paying the channel lip service.

Rao said NetApp was channel-unfriendly until about eight or nine months ago when the company brought in Whitney Tomlin as vice president of sales in the West. Tomlin was responsible for pushing 90 percent of Cisco's Western U.S. sales through the channel compared to 5 percent five years ago, said Rao. "The new channel programs were driven by Leonard [Iventosch and Whitney," she said.

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Iventosch said Network Appliance is instituting several changes aimed an increasing support for its national and regional solution providers.

First, said Iventosch, the company is implementing a new pricing model, including lower list prices for commodity products and an across-the-board increase in partner discounts. "Our discounts are off gross revenue to encourage partners to not discount off list price," he said. "We feel they can achieve [discounts in excess of 20 percent if they don't drive the street prices down."

NetApp is also revamping its sales training and increasing its technical training for partners, enabling solution providers to be able to independently handle installation and support. In addition, Iventosch said, large partners will be able to borrow demo equipment, while other partners will get reduced prices on demo units.

The company has also tightened its rules of engagement, including enforcing its customer registration process and offering a channel-neutral commission program to its direct sales. "Our rules of engagement have been revamped and will be enforced," Iventosch said. "So our partners will know that when they engage in an opportunity with us, we will not undermine their pricing authority or take it direct."

NetApp said it is currently recruiting solution providers. The company already has two national solution providers, Forsythe Solutions Group and Datalink, and said it would like to sign up an additional six to ten more.

The company said it is also looking for regional solution providers and others that cover specific niches within regions.

At the entry gold partner level, the company will look for partners who can drive $750,000 in annual NetApp revenue, but will be flexible as long as the solution provider engages in training and sales activities, Iventosch said.

NetApp currently does not work with distributors, but that is an inevitable move over the next six to 18 months, said Iventosch. "The distributors we are talking to have relationships with vendors like HP and IBM on the server side," he said. "Most of our business now is attached around Sun and NT. There's a whole world we are not attached to. Distribution gives us opportunities in this space."