Network Appliance To Expand Channel Commitment

As a result of new pricing and rules of engagement aimed at the channel last August, revenue coming from Network Appliance's North American channel partners is growing at a rate of three times the company's overall revenue, said Iventosch.

For 2002, hardware revenue fell 4 percent to $523.6 million, making it the seventh largest disk storage vendor, according to research firm IDC.

The company is in discussions to establish relationships with two distributors in North America under which all but a handful of its largest solution providers will be supplied via two-tier distribution, Iventosch said.

"Distributors do many things we can't do," he said. "They can attract new partners we don't know of, and they can better manage the support of our partners. %85 The distributors say they will bring in incremental revenue for us and make it easier for us to administer our channel relationships."

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The company is moving forward with training programs, including holding on-site classes for its solution providers, said Iventosch. Plans are under way to make all its training classes available via the Internet, he said.

Network Appliance is also designing certification classes for solution providers that echo certification training available to the company's own direct-sales reps, Iventosch said. This includes technical certifications aimed at letting solution providers independently offer the services now typically handled by the vendor, he said. These programs are expected to be in place within the next six months, he said.

The past year has seen the company introduce two new product lines. Its NearStore line is a storage array based on inexpensive ATA hard drives, which can be used as a backup device in place of or in conjunction with tape backup solutions, said Iventosch. When used in remote locations, it also serves as a relatively inexpensive disaster-recovery solution, he said.

The company, best known for its NAS appliances, late last year also introduced its first SAN solution. It marked the first time Network Appliance took a product to its solution providers for certification, and 25 partners are either certified or in the process of doing so, Iventosch said. "Our direct sales and our partners have had to fight the SAN vs. NAS religion wars for so long, and had to fight to convince customers we were right and everyone else was wrong," he said.

Network Appliance's next product will be its first designed for the channel, said Iventosch. He would not discuss details of the product.

"For the first time in our history, we are actually designing products and solution sets with help from our partners," he said. "I can't say if we will produce this product for the channel only. But we are definitely designing products with the channel as the focus of our go-to-market strategy. These are products which don't make sense to sell direct."