Big Changes Mean New Opportunities for NetApp Channel Partners

With big changes at the company over the past 12-18 months, NetApp channel partners have many new opportunities ahead.

NetApp is a partner-led company with over 80% of the company’s business going through partners. For its 2020 fiscal year, the company updated its Unified Partner Program. NetApp recognizes and rewards partners for new account acquisition, expanding portfolio sales to existing accounts, and for a focus on services.

Recent highlights at NetApp include cloud strategy updates, acquisitions of note, organizational changes and new partner program elements.

For expanded insight on NetApp’s transformation, Channel Futures chats with Jim Elder, channel chief, Americas Partner Organization, and general manager of LATAM at NetApp; and Chris Lamborn, head of global partner GTM and programs.

Channel Futures: There have been many new hires at NetApp, including you, Jim, and most recently, Cesar Cernuda, president of Microsoft Latin America and corporate vice president at Microsoft, who ends his tenure at Microsoft in June. And I know there are others. Partners like stability. Tell us more about these organizational changes.

Jim Elder: Organizationally we’ve gone through a lot of change over the last few months. We’re excited to have a new sales president coming in [Cernuda], in July, I understand. Specifically, for the Americas we’ve also recently made significant structural changes to our sales organization. We’re going from an enterprise and commercial segmented sales approach to a more regional – what we call areas – focused approach. This puts our commercial and enterprise sales teams back under leaders in a north, south, west structure.

NetApp’s Jim Elder

You mention that partners want stability and the great news is that each of the three leaders that we’ve named for the North, South and West — two have been with the company for quite some time. David Sznewajs is vice president of the North, David Young is vice president of the South, and Mike Bush is vice president of the West.

On top of that, with the new commercial and enterprise sales teams, Alex Wallner is our global leader and has been with NetApp for over 20 years.

While there’s change at the top, at the regional level, NetApp veterans know the partners very well.

Chris Lamborn: Touching on that, when George Kurian took over as CEO [in 2015], he laid out a clear plan for NetApp’s transition to a software company. When you look at the acquisitions along the road, whether it be SolidFire and Talon Storage, and more recently to Project Astra, which is taking Kubernetes across infrastructure, and the acquisition of CloudJumper.

NetApp’s Chris Lamborn

Anthony Lye [senior vice president and general manager of NetApp’s Cloud Data Services business unit] came on, and we separated out our cloud services. We built out cloud-focused sellers within NetApp as an ecosystem to help our partners through this transition.

CF: How should NetApp channel partners see the company now?

CL: I think we’re starting to be more publicly recognized for what’s being delivered over the last couple of years. That’s around establishing …

… the company as more than just a storage provider but to be that cloud enabler.

It’s been an evolution. You look at the people coming on board — [for example], Cesar coming from Microsoft. There’s a software and a solution piece that’s in there, that’s used to working with partners. Fantastic NetApp fit. Mike Berry comes from a software-oriented background. Our new SVP of global operations, again coming from a software-oriented background. So they understand that transition and they’ve all been at organizations that have transitioned from an on-premises to a services-oriented outcome.

CF: Let’s talk about NetApp channel partners and what’s changed.

JE: The evolution of our partner ecosystem over the last couple of years has been interesting; particularly, how it relates to our cloud business. Two years ago, even last year, you still heard from partners, “I don’t know how to make money in the cloud.” Frankly, I hear that a lot less these days.

I think that everybody has figured out that the way to make money in the cloud is around services. And also, helping their customers with their journey to the cloud. A lot of our partners have built out extensive cloud migration services, cloud consulting services — and higher ROI initiatives that we’ve driven for the last year are Cloud Designed Workshops. This is something that we’ve led with our own services, where we’d go into an end customer and help them architect their ideal storage solution.

We started to work with our partners to pass along that expertise so we can scale those workshops out. We’ve seen a lot of success. Some partners are more advanced than we are. They wrap applications and performance assessments around that as well.

CF: How many NetApp channel partners are growing the services piece of their business? 

CL: From a high level, we have a fair number of partners that are building our managed services but it’s a smaller percentage who are building out the deep knowledge. It’s not cheap. Whether you’re driving into a cloud consultancy, or AI or DevOps, as a partner you have to look how you invest in your organization.

That’s why we’ve taken the view that we’re not going to drop over the fence and off you run. We’re having engagements with partners to help them build out services. We’re investing in resources with them. And, even in the AI space, there is partnering. We’re helping partners come together, whether that’s investing mutually or having the organizations invest and bring the skill sets together.

The biggest reality check, for me, is when you look at IoT. There’s not any one partner that can solve every IoT need on their own, nor do I think they need to. The notion of partners partnering has become much more real.

CF: Let’s talk about some of the updates to your partner program. 

CL: We’ve morphed and evolved our program over the last three years taking into account the mix of solutions – AI, cloud, traditional storage. We’ve taken a very position on incentives. Bring in a net new customer. And, if you’re a partner with a strong record of net new accounts, you’re going to earn 10%. Plus, at the end of the year, if you’ve grown year on year over the set amount, you’re going to earn $100,000 on top of that.

If you take out a competitor, and the list is endless since we’ve broadened our horizons, we’ll pay you up to …

… 20%. And these are stackable.

We also added an entry tier because we found that a lot of the competitive takeouts started at a lower level, so we wanted to recognize that. We increased the amount a partner earns within that primary category. And, we’ve made it easier for them to get that money.

There’s also a great opportunity for refresh now. We have a lot of customers, as they look at that journey to the cloud, they’re looking at taking our cloud-enabled solutions and expanding that. So we introduced a new tech refresh program for all of our partners.

Two years ago, we launched our cloud program, which was around a focused subset of partners. This year, as its expanded and we see more cloud-centric partners coming in, we’ve expanded incentives. So, any partner at any level within NetApp can earn 5% of every single one of our cloud solutions that they sell.

So, if a partner wants to make money, it’s refresh, compete, bring in a new customer, sell cloud.

CF: What about COVID-19 and impact on requirements for NetApp channel partners?

CL: Some of the big things in our program, like compliance and certifications. We don’t want to be an inhibitor to our partner community continuing to grow. So, we extended our certifications for six months and decided not to demote any partners for at least the next nine months. We also deferred a compliance review — but we’re still promoting. We want to make sure partners can focus on their business.

CF: Other priorities for partners?

JE: One is our consumption-based offerings around Keystone. This program for partners comes in two flavors. They can resell a NetApp-managed opex model. Or, for partners with more advanced services and support capabilities, they can resell an opex model to their customers, but they’ll manage all the service and support. They capture all the services margin and revenue.