NetApp deals get larger despite IT budget cuts

NetApp claims that storage purchases actually grew in size during the downturn as companies consolidated and shared resources across multiple internal projects.

At an event in Sydney today, the vendor's director of channels Scott Morris told CRN that budget cuts forced customers to "look sideways" across other projects internally to identify areas where they could cut spending plans for their own projects.

One way to do that was to pool funding from across multiple projects to buy one large piece of IT kit and share it rather than buy a bunch of smaller boxes for each project.

"The result was we actually saw projects accelerate and get bigger rather than get smaller," Morris claimed.

"The value [of deals] to NetApp actually increased as a result of that focus [by customers]."

Morris said NetApp had seen "incremental" revenue growth coming from its channel.

"We're now sitting around 50 percent or just over in revenues coming from the channel," he said.

In February it was suggested that larger enterprise customers, to which NetApp sells direct, had held back on new purchases while they sat out uncertainty over budgets.

The report said that this hold on spending was shifting NetApp's direct/indirect sales mix, resulting in a higher percentage of sales appearing to come from the channel (which did not necessarily equate to channel sales growing outright). 

Morris denied that this was the reason the vendor's indirect mix had grown.

Last week, NetApp founder Dave Hitz wrote that the number of organisations taking up one-year service renewals suggested that there was a lot of pent-up demand for new storage buys in the market.

"In good times, people upgrade their equipment when their initial service contract expires. In bad times, they want to defer capital spending, so they simply extend the service contract by a year," Hitz wrote.

"In the past year, we have seen many one-year extensions, and we believe this reflects lots of pent up demand. IT infrastructure is aging, and eventually companies will need to buy."

But Morris told CRN today that he had not seen "any significant degree of maintenance renewals" in the Australian market.

"To me it's not standing out as an endemic issue," he said.

Channel enablement

Morris revealed today that up to 600 partner personnel had now undergone NetApp's high-level certification program training in Australia.

He launched a new four-day skills development program called Maximise that would be offered free to NetApp partners. The program would enable partners to, among other things, uncover more opportunities to sell NetApp solutions and "win larger deals through a more consultative approach".

Morris said the program would be paid for courtesy of increased channel program funding from NetApp's vice president of worldwide channel sales, Julie Parrish, who is visiting Sydney this week for the second time since her appointment a year ago.

"Often from an A/NZ perspective we cringe when we see the programmatics coming out of the US and what we can implement locally," Morris said.

"[Julie and I have] spent a lot of time working with the partner community and having gone back to the US, [Julie has secured] immediate investment. We've got additional funding to build up some of the areas we thought were lacking."