Lacking In In Partner Services, NetApp Vows Amends

Network Appliance is vowing to fix a major sore spot with its channel partners -- the way it delivers professional services -- with an on-going vamp of the business culminating with the opening up of services to all partners early next year.

NetApp is also doing targeted recruiting of new channel partners, looking for those who work with other vendors but might be interested in adding the company as a vendor partner.

The company's professional services policies have cost the vendor much goodwill among its channel partners, and caused the company to barely lose out to its storage arch-rivals EMC and Hewlett-Packard in the VARBusiness Annual Report Card this Fall, said Leonard Iventosch, vice president of global channels at NetApp.

That lack of services commitment to the channel has hurt partners, said one major NetApp solution provider who asked to not be identified.

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"Their professional services people have been competing with VARs for the last four years," the solution provider said. "We've been almost in direct competition. We have four fully certified engineers who every time they turn around they see NetApp selling services direct. So it's good news if things are changing."

Things are indeed changing, Iventosch said.

Since the ARC loss, which was unveiled at CMP's Xchange 2007 conference in late August, NetApp has had a complete change in attitude towards services, Iventosch said.

"My boss's boss, Ed Deenihan, [executive vice president for NetApp's global services] makes the decision about who to hire to do what," he said. "Now he is hiring people to help build the channel partners' services rather than deliver our own services. That's a very important change."

NetApp has also changed its compensation plans so that field sales managers' comp goals no longer include attached services, Iventosch said.

"Also, our professional services organization was paid on how much professional services were sold, either direct or via partners," he said. "Now they're paid on the total sales district performance, not just on services revenue. So we've eliminated conflict."

NetApp is also modifying its Technical Partner Advisor (TPA) program, Iventosch said. It was originally focused completely on pre-sales and solutions design services, but has been changed so that 40 percent of its focus is now on all services.

"The idea is, most of our partners have pre-sales and post-sales services," he said. "They don't get paid on pre-sales. But they want more revenue from post-sales services. So our TPAs are working more with partners on post-sales services."

The TPAs currently work direct with the top 10 to 20 go-to-market partners in each sales direct, with the rest of the partners expected to work with their distributors Arrow and Avnet to engage NetApp's direct sales service engineers, sales reps, and professional services personnel to deliver services, said Iventosch.

Next: NetApp implements Installation Accreditation Program For Partners

Rick DeTurck, senior director of services for NetApp, said the vendor is also implementing a new Installation Accreditation program to help partners with their own professional services capabilities get up to speed on NetApp post-sales services delivery.

The free Web-based program already has 95 partners who have completed at least half of the coursework, and early next year the company will make a broad range of its professional services available to its entire partner base, DeTurck said.

The company has already reserved 300 seats for solution providers at a "Spring Training" program in February and March in Florida, DeTurck said.

Iventosch and DeTurck both said that NetApp is still in the early phases of modifying its professional services to make them available to a broad range of solution providers, and so some of the details are still not set.

Most NetApp solution providers have yet to hear any details, but are looking forward to doing so.

Lilien Systems, a Larkspur, Calif.-based HP and NetApp solution provider, has such services for its HP clients, but is only just now building them for its NetApp clients, said Dhruv Gulati, executive vice president for the solution provider.

"NetApp has told us they want us to do more services," Gulati said. "They're investing in helping us do more this year."

One solution provider who has seen some parts of the new services push said that NetApp has advised it that it is in the process of improving the services element of its channel program.

"That's good news, as most resellers/solution providers are services-centric for profitability and enhance the customer value by wrapping services into the solution bundle," wrote Rick Marcotte, president and CEO of DLT Solutions, Herndon, Va., in an e-mailed response to questions about the program.

Marcotte wrote that NetApp has yet to fully construct the details, but discussed what he said were pretty unique and meaningful tenets.

These include rearchitecting the comp plans so that NetApp associates are now penalized when services are sold and delivered through the channel and looking for ways to have services delivered with the partner being the prime contractor rather than having NetApp hold the paper while treating the partner as a subcontractor, Marcotte wrote.

"As with most NTAP (sic) channel programs, I suspect they will be predictable, well constructed and objective (i.e. certifications and training will be required to participate in this program -- there is no free lunch)," Marcotte wrote. "They expect a lot out of their channel partners and with their practice of limited distribution and strong channel margins for incremental business, they tend to get it."

Iventosch also said that NetApp, which has grown its partner base to 475 solution providers from 300 partners 18 months ago, is looking to bring on new types of partners.

Whereas in the past the vendor focused on signing on systems integrators, it is now looking to sign on complementary partners, such as those with specific platform focuses.

"For instance, we want to sign HP resellers, partners that can uncover opportunities we don't see," he said. "These guys typically do a lot with services. They need a reason to provide services around storage, which may not be their primary business. We have to be able to let them offer services around our storage product."