NetApp makes changes to sales motions designed to accelerate channel success

The NetApp strategic priorities for the new fiscal year will have implications for their sales strategy. Here’s how that strategy will affect the channel.

Henri Richard, Executive Vice President Worldwide Field and Customer Operations at NetApp

SCOTTSDALE — NetApp met with its top partners here at their C3 Channel Connect Conference this week to kick off their new fiscal year by outlining the company’s focus on go-to-market strategy for the fiscal year ahead. After CEO George Kurian vigorously laid out the high-level strategy, NetApp sales leaders filled in some of the specifics, particularly around changes in the company’s sales motions, and both the benefits to, and asks from partners that will ensue as a result.

“Two years ago, many partners told me that we didn’t have momentum and were concerned about the partnership,” said Henri Richard, Executive Vice President Worldwide Field and Customer Operations at NetApp. “Our growth in the Americas was slightly below the overall, because of high growth in Europe and Asia, but we still had 15 per cent product growth, including a 56 per cent growth in flash. Q4 was an amazing story for NetApp, with record breaking results in several categories.”

Richard emphasized the same triple-headed theme that all the NetApp speakers stressed, that their focus for FY19 is around cloud, all-flash, and hyperconverged [HCI].

“We are focused on three things,” he said. “First and foremost is our cloud strategy, to have new conversations with customers around the power of our data fabric bringing all these solutions together and eliminating the cost of siloes.  Second is our HCI strategy. We see ourselves as an enterprise disruptor and a power in HCI in three years. We are not going to be just ‘one of the other guys.’ Third is flash. We are second in the market now and with our present trajectory, we can get to number one in the US this year. We have concentrated market share in only a few of the prize bands and we are going to expand that number of bands where we are strong.

“We have other things in our portfolio, but we will live and die by the success of these three,” Richard stated.

Richard noted that for FY 19, NetApp has restructured their sales model, adding a Global Accounts category and creating it as a separate sales ‘region,’ so that the model now resembles a pyramid with 55 Global Accounts at the top, with Enterprise and Commercial underneath.

“This is what many of our competitors do,” Richard said. “We had a go-to-market that was more complex than it needed to be, so we took all our global accounts and carved them up into a fourth sales region. We have high ambitions for that team. The difference in those accounts between a high and low penetration is x3. If we can bring the low even up to average, that would be significant.”

In the enterprise segment, the focus has been changed to let reps focus on fewer accounts – 1200 in all.

“That will let them go deeper in those accounts, which is important as we move from what had once been a single product company to a broad portfolio around our three key opportunity areas,” Richard said.

The third area, commercial, is defined by NetApp pretty much as accounts left over when the first two groups are taken out. NetApp is significantly underrepresented in these approximately 70,000 remaining accounts in the Americas. Their share there is 3 per cent — compared to an enterprise share of 18 per cent and 11 per cent in the global accounts.

“We need to be simpler to do business with and faster in this segment,” Richard said. “Our mission in the commercial segment is not just to adapt the enterprise go-to-market, but to think of it as business with different roles for success around velocity, simplicity and partner-led strategy. We need your help to be successful here. It’s a huge opportunity for us.

“We have expanded our focus on commercial, with a dedicated workforce of 65 sales people – 38 commercial territory managers and 27 inside territory reps, who closely align with our commercial segment,” said Jeff McCullough  Vice President, Americas Partner Sales at NetApp. “Our objective is to put a great plan in place to expand our market.”

Richard said that NetApp would engage in the commercial account to support partners as part of this push.

“Our professional services will engage to support you there, but not to compete with you,” he stressed. “We have a few legacy direct accounts, but our fundamental route to market is you. We are there to support you, but we really need your help in the commercial segment. We are going to ask you to do more for us in penetrating the commercial segment, and start by generating leads. We will also need to help you creating these new business opportunities.”

Richard emphasized that the market now has different and higher expectations of NetApp, which in turn compels NetApp to up its ask of its partners.

“What we are facing now is a completely different set of expectations,” he told partners. “It used to be about our survival and the bar was fairly low. In FY17 and FY18, we overachieved. Now the market in FY19 is a different game. The market now thinks we can beat our objectives, so the pressure is greater than it has ever been.  It will require success with each of our three priorities – Flash; HCI and Cloud. I need from you very clear commitments about what areas of the business we can go in and gain share together. I need you to think about how you can leverage our new Go-to-Market strategy for the benefit of your business.”

Richard said he wants partners to pursue success across all three of the opportunity areas – not just the low hanging fruit.

“Success in the three priority areas needs to be balanced,” he emphasized. “Yeah, the big numbers are in flash, but you also want to have success in the cloud and HCI as well. And we need your input into getting ourselves geared to have a real commercial business. You have a closer relationship to the customer than we do, and we intend to leverage more and more of this partnership for success of our mutual business.”

Renewals was another area where Richard emphasized a new focus on discipline. He stated that NetApp has devoted a lot of effort in the last two years to renewals.

“We are now measuring the quality of partnerships by on-time and disciplined renewals,” he said. “It’s not acceptable to have an on-time renewal rate that’s not best in class.

“There’s a lot more that needs to be done to get NetApp in North America where it needs to be – number one in this industry – but the best is yet to come and we looking forward to doing it together,” Richard concluded.