NetApp has presented an impressive array of new commitments to partners, but in return in for reciprocal commitment in return, specifically selling NetApp’s newer solution areas.

PHOENIX – The beginning of a new fiscal year is typically a time for channel-focused companies to unveil new perks and programs for partners. NetApp did not disappoint at their Channel Connect Conference [C3] here this week, making multiple announcements of significance. Along with the new commitments to partners, NetApp also made a significant ask, requesting that they do more business with NetApp at the expense of other vendors than has been the case in the past. This is particularly so in areas which have not been a big part of NetApp’s business historically, but which they now view as extremely strategic.

“We are laying out a story here around a different NetApp, and laying out a strong value proposition for you,”  Jeff McCullough  Vice President, Americas Partner Sales at NetApp, told partners in his keynote. McCullough hit on the three big themes of  the event – where they emphasized the need to lead with cloud, to sell NetApp’s new HCI solutions, while continuing to sell FlexPod, and to continue to drive NetApp to market leadership in all-flash.

McCullough indicated that the cloud strategy has both defensive and offensive elements. He gave a shout-out early in his talk to Canadian partner Scalar Decisions, who, when told by a customer that they were leaving to move to the cloud, succeeded in selling them NetApp in the cloud instead.

“That was a huge win, not from a dollars standpoint, but in meeting the challenge of the cloud,” he said.

NetApp really emphasized NetApp’s strengths in the cloud, particularly against their main storage competitors, as the suitability of their software to the cloud – recognized by partnerships with the big cloud hyperscalers – presents an opportunity to lead with the cloud, while still being able to drag other business with it. Still, McCullough acknowledged that many partners had concerned about effectively monetizing the cloud, so he indicated NetApp had addressed this.

“The question I still get consistently is how do you make money with the cloud,” he said. “So we are establishing a bar, where we will pay a 10 per cent Cloud First rebate up to a million dollars of ARR on everything you sell – and 15 per cent on ARR above a million. That will last for as long as you have the customer.”

A partner needs to meet certain qualifications to be eligible. This includes achieving NetApp’s Public Cloud Integrator Business Capability, as well as Premier level status with AWS or Google, and CSP status with Microsoft. Partners also must drive $500,000 in ARR for CDS, and have a public cloud service practice.

“We launched Cloud First about this time last year,” McCullough said. “It was our first foray into a program for what we envisioned as born in the cloud partners. We discovered quickly that many of our other partners wanted to participate. They were typically Microsoft CSPs, also selling AWS. Last year, we weren’t able to articulate how to make money on this. Now we are. So we are also expanding the Cloud First membership. Remember that originally we thought this would be a handful of cloud-focused partners. We are hoping to double the numbers of Cloud First providers from 30 to 60, and I have had many good conversations.”

NetApp is also introducing a new Cloud Capability Specialization with a $5000 Specialization Rebate.

“This is the first step to becoming a Cloud First partner,” MCullough said. “It will provide a training framework, and we will count all cloud revenues driven by any specialist partner towards their program benefits. Our hope is that partners will move quickly to gaining that specialization.”

A new Public Cloud Integrator Business Capability was also announced.

“We are soon launching into GovCloud, and once we get that up, we will work out a fuller cloud strategy, around this,” McCullough said. “We will work through that with public cloud partners, and this capability will also be just as powerful for  Canada as the U.S.”

NetApp’s hyperconverged initiative will be a challenging one, given that their product is new and that many partners have relationships with other HCI vendors like Nutanix, so they are addressing that in part by incents.

“We have created what we are calling HCI Partner Rewards, as an umbrella to identify several different incentives around HCI,” McCullough said. “We have big aspirations for HCI and it is important that partners recognize it.”

In North America, there will be incentives of up to $5000 – $2500 for sales and $2500 for technical reps, who will be paid on every deal they bring to the table and close, while in Latin America, a rebate incentive will be used instead. Public sector will have a frontend rebate in conjunction with distribution partner. The 5 per cent bonus on everything sold in CI will apply to HCI as well. The HCI benefits are also stackable with 10 per cent new customer rebate and Run To NetApp competitive takeaway promo. By next year, NetApp is hoping that every partner will be doing at least a million dollars worth of HCI business.

“This is a new story for us around HCI,” McCullough said. “We are putting the market on notice that we want to be number two or three in this space in the next couple of years. If we execute our plan, we will move up that list in short order. Every NetApp sales rep has an HCI target – so to be successful they have to execute on HCI.”

The flash business is already doing well, and McCullough noted that 70 per cent of NetApp’s flash business in the Americas was in the room among the attendees.

“Our business grew 9 per cent YOY, but our flash business was up 25 per cent, and our Express Packs were up 750 per cent,” he stated. “We want more of you to focus on delivering an Express Packs strategy.” McCullough said that NetApp is continuing to add more Express Packs, and now have some solutions that are Express Pack-only.

“Some partners were nervous about that, but they take work out of engaging at speed, at a pace that works for them,” he indicated. “Express Packs take the drama out of selling something to a customer who knows what they want, as they are pre-packaged and pre-priced and ready to sell.”

McCullough also said that Express Packs will be particularly useful in the commercial segment – an area where NetApp  wants partners to focus more, because NetApp is significantly underrepresented in these approximately 70,000 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.

“These are customers with an addressable IT spend of around a million dollars,” McCullough said. “It’s not SMB, more midmarket and lower enterprise. We now have a dedicated commercial workforce of 65 sales people 38 commercial territory managers and 27 inside territory reps. We want you to align with our commercial segment. Our objective is to put a great plan in place to expand our market.” New dedicated MDF funding for commercial will be a part of that.

NetApp has also beefed up its lead passing capabilities.

“This has been an area of investment for us, with a focus of establishing capability around lead passing,” McCullough said. “It has been piloted and is now ramping up into full deployment stage . Our call centre in Raleigh has been expanded from 20 people to 33 people.  Their job is to qualify leads and find out budgets and timeline and, send the information AND an appointment to the partner. It’s very much a white glove type of operation.”

NetApp is also introducing what they are terming an Advanced Value Selling strategy.

“Advanced Value Selling means that I’m not selling a product on its tech advantages -but on its business advantages,” said Brett Roscoe, Vice President of Product and Solutions Marketing at NetApp. “NetApp is a company that is 25 years old and once sold a single product. That has all changed. The portfolio is much broader, and the tech admins don’t do all the buying any more. We were starting to do this focusing on business outcomes over a year ago, but this is now a measured program, which we track and monitor. It’s now a very specific program with metrics.”

Advanced Value Selling targets the new personas and new buyers, like data engineers and Chief Data Officers, and looks at how to best market to them.

“Our methodology looks at understanding their internal pressures, understanding their business objectives, helps them understand the internal challenges and helps them navigate these,” Roscoe said. “We also use digital tools, vPlaybooks, that continually update, and address value propositions by use cases and workload.” The vPlaybooks also include digitized old reliables like heat maps and battle cards.

“We now have three vPlaybooks for specific use cases,” Roscoe said. “We have nine use cases and we would eventually like to have nine vPlaybooks.

Finally, McCullough closed his address with a call to partners to place more of their bets with NetApp.

“Don’t sell competitive products around us,” he emphasized. “Going forward, partnering with NetApp means partnering with ALL of NetApp. The time is now to stand up and be counted as part of this plan. My ask of you is is come to the table ready to be bold and ready to win. Now is the time to place your bets.”

McCullough later expanded on this ask to ChannelBuzz later.

“The reason the channel works is that channel partners have choices, that allow them to make recommendations to customers,” he said. “Our partners now have the ability to sell across a broader section of customers and a broader range of solutions. Two years ago, we didn’t have the portfolio that we have today. Our partners sold other HCI vendors because we didn’t have an offering for them. They sold Pure Storage for specific workload applications. We now want them to look at what we have for these kinds of use cases, and others. We will set a higher bar of what it means to sell with us. So partners do need to prepare for a different tone this year. We now have much more for partners, but it comes with a cost that they may not have seen us ask for before.”