Partners the key for NetApp

The storage game is big business in Australia. According to IDC research, the local storage market was worth more than half a billion dollars last year. While ‘snorage’ may not be the most fascinating of areas, it is a highly lucrative – though highly competitive – market for those who understand the opportunities.

One company that appreciated and capitalised on the opportunities around storage early is NetApp. Formed in California in the early ’90s, NetApp is one of several vendors trying to carve out a commanding share of the expanding storage and data management market. The company’s A/NZ arm grew at 80 percent last financial year, generating more than $150 million in revenue.

The prime contributor to this growth was NetApp’s bread and butter Network Attached Storage (NAS) solutions. NAS devices comprise hard disks and management software dedicated to serving files over a network. These IP storage devices accounted for more than 70 percent of the A/NZ business during the last financial year. Disc to disc backup, the burgeoning practice of storage virtualisation and increasing demand for Microsoft Exchange storage platforms also saw NetApp finding new opportunities in verticals such as finance and health care.

CRN was invited to join 140 of NetApp’s channel partners from across Australia and New Zealand at the vendor’s third annual partner summit last month. Held at the Crowne Plaza in Terrigal on the New South Wales central coast, the summit united NetApp’s channel partners for an award ceremony and two days of networking and discussion. Partner companies WatchGuard and VMWare were also invited to conduct seminars on integrating their respective products into a NetApp storage solution.

Over the course of the summit, NetApp staffers took attendees through the company’s future plans and repeatedly emphasised the importance of partners in driving the A/NZ business to become NetApp’s fastest growing global region.

Peter O’Connor, managing director of NetApp A/NZ, thanked the channel and promised an escalation
in investment in the partner community over the coming months.

“The partner contribution has absolutely stepped up in the past 12 months which is tremendous. I’m a channel guy, I came from a channel background and I want to see our partners be hugely successful.

“I believe that the partner programs we are bringing to market now versus when we first launched them two years ago are tremendously improved and enhanced. A lot of emphasis will now go into lead generation.”

Towards the end of last year, NetApp began to pour resources into its channel, starting with the establishment of its Authorised Professional Services Partner (APSP) program. Launched in November, the program allows partners to undergo intensive training to attain the same level of certification as the vendor’s in-house engineers. XSI Data Solutions is the first of NetApp’s partners to achieve this status and a further four partners are scheduled to be certified to deliver services to the APSP standard.

November also saw the appointment of Distribution Central’s storage business unit, SAN Systems, as Australian distributor.

Scott Morris, NetApp’s director of partner and public sector sales, was quick to assuage any concerns about the shift to distribution. He said the distribution model is designed to be functionally transparent and will provide access to resources such as inside sales capability, order processing systems and technology, logistics and lines of credit that the vendor was unable to supply.

“The biggest change for the plan this year is that we are manoeuvring all of our operational focus, our procurement and a lot of the operational administrative backend across to distribution.

“It is a big transitional change for a number of our traditional NetApp direct partners who purchase from us directly. I’m asking for a lot of support, from that partner group particularly, to help us transition the procurement and the business operational aspect of our transactions across to distribution.”
Distribution Central’s CEO, Scott Frew, said the transition will benefit both corporate customers and partners through the provision of increased resources and support.

“NetApp has moved to distribution to leverage its model. It has only so many finite resources. Moving to distribution will allow NetApp to create more demand at the end-user channel.”

To ease the changeover, Distribution Central has launched a web-based sales and configuration system, with a greater depth of functionality than NetApp’s own PartnerEdge system. The new configuration tool allows resellers to track and trace every NetApp asset sold. Resellers will also be able to see which boxes are out of maintenance and thereby maximise their service opportunities. The system even allows carbon credits to be attached to each deployed box.

“The idea is you will be able to log in any time and see all the assets you have sold and what their status is to grab every bit of free money that you can.

“There’s a massive opportunity for integrators that don’t play in the storage market today because they fundamentally saw it as too difficult. If they aren’t playing in this network-attached storage space then they should start leveraging off our and NetApp’s engineers and get involved in that business.”

NetApp’s channel partners are instrumental in driving the company’s growth, representing 32 percent of its total A/NZ business for the last financial year. The channel also leveraged a further 14 percent of the company’s named account business. Going forward, the goal for this year is for the channel to hit 40 percent of the total business and to further leverage 20 percent of NetApp’s direct business.

To sponsor this growth, NetApp is investing heavily in staffing and training. It has taken on 30 new employees over the previous two months and is planning to add a further 20 by the end of the year. There are also plans to train more than 400 sales and technical staff across its partner tiers.

It has also set its sights on the lucrative SMB market, an area in which it has so far enjoyed limited success. Part of its strategy to garner more market share in the SMB space is the addition of a new Silver partner tier to its existing Platinum, Gold and Registered partner program. The new Silver level is targeted at smaller resellers willing to make a commitment to driving sales of NetApp’s Storevault SMB and FAS2000 product range. To achieve Silver status partners will require at least one NetApp-certified salesperson and technician. Certification will be provided for free by one of the vendor’s full-time trainers.

NetApp is also directing focus to helping the channel achieve greater penetration into direct accounts through increased education and services training. Partner discounts are being increased and a seven percent additional upfront discount is being made available upon registration of
new deals.

Morris said that resources are being devoted into NetApp’s eight-strong partner enablement team, particularly around free training.

“We spent an inordinate amount of time last year doing a whole bunch of baseline education around skills and certification. Nothing is free of course. The kickback to me is if I get them trained they’re on the drug.”

New business is another major focus. NetApp’s Peter O’Connor said a newly formed team will be chasing the deep pockets of government agencies in NSW, Victoria and Canberra.

“This year we’re really going to start penetrating and putting focus into government accounts, particularly state and federal accounts through a government-focused team.”

NetApp will also be dedicating the majority of its marketing budget towards lead generation and investment in partner business development activities. A new proposal-based marketing fund has been established and the company has promised to kick in two thirds of the cost of seminars held by partners to sell NetApp products.

Flying in from California for the summit, Tom Mendoza, NetApp’s vice chairman, reassured partners that the company was well positioned to ride out a softening global economy. He said that while its competitors are pinning their hopes on the acceleration of existing business, NetApp is making a strong grab for market share.

“We’re going to win by our commitment to each other, how intense we are, and how much we are willing to sacrifice to win.”

Besides communicating strategy, the summit also provided a platform for NetApp to reward its highest achieving partners. Comedian Russell Gilbert acted as MC for the awards ceremony gala dinner, peppering a blue-tinged standup routine with a healthy bout of interactive activities ranging from rib tickling to risqué.

The coveted Australian partner of the year award was snapped up by XSI Data Solutions, which also swept in to win new partner of the year and take out top partner honours in Victoria, NSW and Queensland. Software and services supplier, Empired, was awarded partner of the year status for Western Australia. New business deal of the year was won by Fujitsu New Zealand, which also landed top partner honours for New Zealand.

With post-dinner drinks running well into the night, NetApp took the very thoughtful step of providing a five-step recovery pack featuring a bottle of water and cup, a Berocca tablet, breath mints and some mirrored sunglasses. The packs proved a hit with many bleary-eyed attendees the following day.

Mike Riley, NetApp’s global systems engineer, wrapped up the summit with an examination of the trends set to drive the storage market over the coming years. Riley highlighted de-duplication, storage virtualisation, data centre Ethernet and flash storage as the technologies set to meet demands to manage ever-increasing volumes of corporate data.