ExaGrid CEO Making Big Investments In 100 Percent Channel Model

ExaGrid Systems CEO Bill Andrews said the fast-growing deduplication backup appliance company is making big investments in its 100 percent channel sales model as it moves to disrupt large competitors such as EMC, Hewlett-Packard and Symantec.

ExaGrid recently doubled the number of territory sales managers that work to close deals with solution providers to 24 and has plans to double it again to 48. "This is the year of the channel for us," said Andrews. "This is the time for us to step on it."

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The Westborough, Mass.-based company ended 2014 with double-digit sales growth and expects to grow by as much as 25 percent in 2015 and as much as 30 percent to 40 percent in 2016 as the channel offensive kicks into high gear. Currently, the company, which was named a visionary in Gartner's 2014 Magic Quadrant for Deduplication Backup Target Appliances, is adding about 80 new customers a quarter and has about 120 highly active solution provider partners.

The channel offensive comes with ExaGrid's scale-out adaptive deduplication appliance winning 70 percent of the time when its solution provider partners are facing off against EMC, HP or Symantec, said Andrews. "We've just got a much better mousetrap," he said. "That is huge for the channel. We are at an inflection point for the company. The product is finally what we want it to be. It's a lot more advanced than our competitors."

About 80 percent of the time, ExaGrid is competing for customers on tape looking to move to disk-based backup. The other 20 percent of the time is head-to-head deals against competitors such as EMC Data Domain. ExaGrid has "traded out" EMC Data Domain close to 150 times, said Andrews."We are trading them out all the time," he said.

One of the keys to ExaGrid's technology is a tight partnership with Veeam Software, a virtualization backup and recovery software provider that reported a 40 percent increase in bookings to $389 million in 2014.

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"Veeam is growing like a rocket ship and we are drafting behind them," said Andrews. "We now have over 700 customers who are running Veeam." That's because ExaGrid has developed technology with Veeam that allows the Veeam Data Mover to run on the ExaGrid appliance.

ExaGrid and Veeam are teaming on about 20 "lunch and learn" co-marketing events each quarter with as many as 25 prospective customers at each event with a solution provider partner. "With Veeam the [ExaGrid] win rate is ridiculous," said Andrews. "When customers see the [ExaGrid] landing zone [technology where backups land straight to disk] with Veeam, it's a no-brainer."

The lunch and learns shine the spotlight on the the ExaGrid Veeam Accelerated Data Mover, which increases the speed of a synthetic backup by six times, according to testing by analyst firm Enterprise Strategy Group.

As part of its channel offensive, ExaGrid added Lifeboat Distribution, a Shrewsbury, N.J., virtualization distributor headed up by Executive Vice President Bill Botti, the former Veeam vice president of North America sales.

Andrews said he sees the Lifeboat distribution deal as a way to put the pedal to the channel metal in 2015. In fact, Lifeboat is adding sales reps to help fuel ExaGrid growth in the field.

Botti, for his part, said ExaGrid has a "technically superior solution" that works in heterogeneous storage environments with 26 of the top 32 replication and backup software vendors. "ExaGrid is lightning-fast and highly reliable," he said. "We are providing ExaGrid access to a broader channel than they are reaching today, positioning them with leading-edge resellers."

The exciting thing about ExaGrid, Botti said, is the company is poised to break out with solution providers looking for disruptive technology that brings high margins. "Timing is everything," said Botti. "ExaGrid is doubling down on its field sales organization. And we have just finished building a field sales organization which is going to help us be closer to our VARs." One sign of the ExaGrid high profit margin potential for partners: a 41 percent deal registration discount.

Key to ExaGrid's channel build-up is getting into more competitive bids against EMC, HP and Symantec, said Andrews. "When you have a product like us with a high win rate, the challenge is getting into more deals," he said. "We are only in 7 percent of the deals. We are not in the majority of the deals because customers don't know we exist. With most products, it is about reach."

Andrews said his call to action to solution providers is to focus more sharply on the backup space where customers are evaluating at a breakneck pace how to reduce the cost of maintaining and securing data.

"Everything is changing around data," said Andrews. "There is money here. We are telling solution providers they are leaving money on the table with backup, and someone else is going to grab it. We want to help them mine it."