NetApp coronavirus response a seamless fit with transition to cloud strategy.

NetApp's short term pandemic policies, its longer term channel initiatives, and its recent acquisition strategy, all drive towards the same cloud-centric goal.

Chris Lamborn, NetApp’s Head of Worldwide Partner Go-To-Market Strategy and Programs

During the last three months, IT vendors of every focus, size and vintage have been rolling out initiatives, and in some cases products, aimed at the dramatically changed environment created by the coronavirus pandemic. For those who have been trumpeting a digital transformation story these past few years, the pandemic has placed new pressures on customers to speed up their transformation, or begin it, if they have been laggards. NetApp is far from unique here. The company is however reaping the benefits that the pandemic’s leading to intensification of cloud focus dovetails with its own continued transition from a hardware vendor to a cloud-centric one. NetApp’s partner enablement reflects this transition as well.

Chris Lamborn, NetApp’s Head of Worldwide Partner Go-To-Market Strategy and Programs, laid out the company’s pandemic strategy and how it impacts their channel.

“The short-term strategy is about shoring up the challenges,” he said. “We are now looking at mid-term strategy for the 3-6 month period after that.”

Lamborn noted a common theme observed by IT vendors that the pandemic has sped up companies’ digital transformation efforts and public cloud and hybrid cloud efforts.

“It has forced a rapid adoption of hybrid cloud, and forced customers to engage more in the public cloud space,” he said. “That’s not likely to roll back.”

Short-term, Lamborn said NetApp focused on business continuity.

“We got out immediately, and extended credit terms by 30 days. We pushed back our August compliance check from August to October. We will promote partners, but we wont’ demote.”

Lamborn said that policies have been put in place for the mid-term as well.

“For the next three months, we will continue to extend credit terms on low value deals,” he noted. “On larger deals, they want a longer-term solution, not just 30 days. So we are funding 6 month deferred payments for the customer. The partner gets paid in 30 days, but the customer has the ability to defer payments.”

NetApp is also reaching out to customers around the increased security concerns that come with the pandemic situation.

“We are conscious that many customers have established NetApp within the environment, and we can identify ones with security concerns,” Lamborn said.. “We are proactively reaching out to partners with customers with potential risks, not to sell them anything new, but how to advise them around optimum security. ONTAP Volumes is now in a majority of solutions, so we are advising those customers that they have the ability to optimize data transfer into the public cloud.”

Jim Elder, NetApp’s Americas Channel Chief

“We are working with partners around cloud design workshops,” said Jim Elder, NetApp’s America’s Channel Chief. “The partner goes into the end customer and does a full assessment of the environment, about what makes more sense to be on-prem and what makes more sense in the cloud. We offer these through our own professional services, but we are building up partners’ capability to do these assessments.”

Lamborn said the challenges and opportunities around the pandemic dovetail perfectly with what NetApp has already been doing around cloud.

“We took hybrid cloud from being a traditional NAS conversation to a hybrid offering in 2015,” he stated. “As that evolved, it became clear that the only way you can optimize putting data in private cloud, colo and public cloud is by controlling your data. We’ve diversified into being native in the three major public clouds. Our role as a vendor is around facilitating business enablement of this with our partners. We are seeing the transition, but just in a much shorter period of time than we all expected.”

Lamborn pointed out that NetApp’s most recent acquisitions, Talon Storage and CloudJumper, specifically address this as well.

“Both these acquisitions are aimed at taking partners along the digital transformation route,” he said.

The Talon deal strengthen NetApp Cloud Volumes with the Talon FAST cloud data service, which uses file shares to address ROBO issues specifically, and Lamborn said they are working on pulling that all together. NetApp sees CloudJumper’s Workspace-as-a-Service offering as an entrée into the VDI services market that complements its cloud-focused storage back end.

“We announced our VDI service with the CloudJumper acquisition,” Lamborn stressed. “Who wouldn’t want to put this into the public cloud in hindsight? It deepens the opportunity around Microsoft Virtual Desktop. CloudJumper also works closely with Microsoft Virtual Desktop. So you have two businesses established on driving into that same marketplace on a phenomenal scale.

“From a portfolio point of view, it’s an acquisition that solidifies Microsoft driving adoption of the virtual desktop,” he added. “Our unique position with Azure and Microsoft is driving this, although we can also expand this with other hyperscalers.”

CloudJumper’s channel is focused more on the SMB space, while NetApp and its partners concentrate on the enterprise. Exactly how all this will be managed is still bring developed.

“We are still working through the logistics, but it opens up a new channel into that cloud space,” Lamborn said. “We don’t have an SMB channel today, although we do have a lot of SMB customers acquiring our NetApp Files Azure storage service through partners.”

Elder noted that NetApp’s consumption-based sales model is also trending up, likely because of the pandemic.

“We are seeing an uptick in our pipeline for our Keystone consumption-based offerings,” he said. “Cash is king now, and with the OPEX model, we are seeing some uptick there. “Some partners resell the service managed by NetApp and others wrap their own services around it and manage themselves, but though a consumption model.”

Elder also observed the degree to which partners had rapidly reworked their own business models to deal with the Work From Home situation.

“It’s been amazing to see how well partners have adapted to the Work From Home push,” he said. “The CDW earnings announcement shows they had a gangbuster quarter. They have a traditional inside-led motion with sellers coming into offices, but they moved to remote offices very seamlessly.”

Lamborn noted that the changes to their channel enablement announced last week serve both the short-term shoring up goals, while emphasizing NetApp’s longer-term cloud direction. These include those automatic payments for new business where the partner gets paid in 30 days, a new ‘as-a-service’ certification, and a de-emphasis of their traditional ONTAP focus.

“You won’t have to have ONTAP certification,” he said. “We’ve deliberately created this so new NetApp partners of different scales and sizes can benefit from the program. The focus of NetApp is transitioning to software and cloud portability. That’s where we are driving. There are no other vendors with the deep integrative engagements with the likes of Microsoft Azure and Google.”

“I would hope partners would be excited about this,” Elder said. “It’s a new space for NetApp, but it is where we are pivoting.”

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