While the sync and share market is hot, cloud-based offerings have limited revenue potential for the channel, something that the Transporter private cloud appliances are designed to address.
Russ Johnson, Connected Data’s COO
Connected Data began by selling $400 appliances into the consumer and small business markets, and only began to make larger 10 TB and 20 TB rackmounted devices at price points that would interest the VAR channel last fall. They followed this up in February with 6 TB and 9 TB desktop appliances aimed at remote locations and smaller companies.
“We empower partners to speak to a need in the sync and share market that is currently not addressed by DropBox and other cloud players,” said Russ Johnson, Connected Data’s COO. “Partners can’t play in the DropBox space and make money.”
Indeed, Connected Data thinks a fundamental problem with the cloud model for sync and share is that even though the market is booming, with IDC forecasting 23.1 per cent five-year compound annual growth through 2018 to $2.3 billion, no one, including the vendors, can make money because the cost of the back end charges for the service overwhelm revenues in a market where most users don’t upgrade past the freemium model.
Connected Data’s offering uses an appliance – essentially a private DropBox with the same ease of use experience – which isn’t hosted in the cloud at all and so avoids subscription fees. The proposition is that customers will be willing to pay the upfront cost for the appliance because there are no costs beyond that point, and because it is more secure than the cloud, and allows the organizations complete control over the application.
Johnson also emphasized that Connected Data appliances play nice with other NAS products.
“NetApp doesn’t do a good job with Sync n’ Share in the NetApp Filer, which they admit,” he said. “Transporters can be sold in conjunction with other storage products like this which partners are already selling now.”
Connected Data’s Excelerate Partner Program has two tiers, an entry level Authorized Partner level, and a Gold Partner level. Authorized partners get access to product through distribution, access to the partner portal, web-based training and access to sales and marketing tools. They have a 5 per cent margin on each of the Transporter Appliances.
The Gold level benefits are significantly higher.
“Gold partners have access to deal registration, and access to a dedicated sales resource,” Johnson said. They also have much higher margins – up to 25 per cent – as well as access to MDF funds.
Partner program members can purchase any of the Transporters as an NFR demo unit for 45 per cent off MSRP. They are also eligible for the Transporter SPIFF program, which presently has an offer of a $1000 SPIFF on a sale of a 10 TB Transporter 75, which lists at $USD 11,798 and $2,000 for a 20 TB Transporter 150, which lists for $USD 22,798. Both are valid on deals which close until June 30, 2015.
Gold partners are required to train one sales and one technical resource. Johnson said that training scored high as a reseller priority, including the ability of partner salespeople to describe the Transporter and its benefits effectively.
Right now, Transporter has about 240 partners in the U.S. and Canada, about half of whom are Drobo partners who picked up the product, with the rest coming directly to Connected Data.
“I’d like to see that hit a thousand partners through the program,” Johnson said. “SMB and midmarket customers rely solution providers as their trusted advisors.”
Johnson indicated that about 10 per cent of their partners are currently Gold partners, a percentage he would also like to see increase as the channel expands.
“When we hit 1000 partners I would like it to be around 15-20 per cent Gold,” he said. “I wouldn’t want it to go above 20, in order to provide differentiated benefits to partners building a business around our products.”
Transporters have had a good response from the education market because of both the total cost compared to cloud services, and security. Accordingly, the Excelerate program also has an Education Flex Program component, which is a deferred payment plan on all Transporters for verified educational organizations and institutions. Payment for purchases made through August 2015 will be deferred until September 1st, 2015.
“Educational organizations’ budgets are typically not released till mid to late summer, when students are gone and IT has the most opportunity to make changes,” Johnson said. “This lets them acquire product now, and they don’t have to pay until later, when they get the funds. This lets partners get in there and work within the budget restraints.”
