A number of traditionally hardware-focused IT vendors now pursue software, services and consumption-based pricing. Cisco provides an example in the networking field, making its first move to sell a switch as a subscription in 2017. Server-maker HPE in June announced plans to deliver its entire hardware lineup as a service by 2022. Storage vendors are moving in this direction as well: the NetApp subscription model provides one example.
NetApp channel executives in March discussed the company’s hardware-to-software transition and partner enablement strategy. Mathew Chacko, director, channel sales, consumptive solutions at NetApp, and Mara McMahon, global principal consultant, Fueled by NetApp, provided additional details in a statement describing the company’s subscription strategy and how partners fit into this approach.
NetApp’s strategy is built around its portfolio of managed and unmanaged consumptive offerings associated with the company’s private and public cloud solutions.
“NetApp, as a whole, believes that these offerings enable partners to embrace a land-adopt-expand-renew model in subscription-based selling,” according to Chacko and McMahon.
With land, adopt, expand, renew — or LAER — the seller seeks to create a long-term relationship with the buyer. The “land” step represents the initial sale, while “adopt” covers activities designed to ensure customers successfully use the offering. This phase is particularly important with cloud-based, subscription software and services — organizations are unlikely to renew an offering users don’t embrace. The “expand” step encompasses up-selling and cross-selling initiatives that extend use. All the steps point to the goal of customer renewal.
NetApp uses LAER in its partner program, with support coming from the company’s Fueled by NetApp (FBNA) program. FBNA equips NetApp partners with best practices for go-to-market strategy and planning. FBNA covers pricing, packaging, defining use cases, creating service-level agreements, messaging, sales training, demand generation and market awareness, the company executives noted. They added that the best practices create a foundation for selling subscription services.
NetApp subscription model for public, private clouds
NetApp’s lineup of consumption-based offerings gives partners various entry points to customer sales. NetApp’s Cloud Volumes OnTap, for instance, offers a way to land deals in the public cloud, putting partners in a position to help customers as they migrate to AWS, Microsoft Azure or Google Cloud Platform, according to NetApp. Cloud Volumes OnTap offers SnapMirror replications for disaster recovery, which NetApp said is a typical first step in a customer’s cloud journey.
In keeping with the NetApp subscription model, Cloud Volumes OnTap is available as an hourly pay-as-you-go subscription or as a one-, two-, or three-year subscription.
Meanwhile, NetApp’s hyper-converged infrastructure (HCI) offering, HCI Cloud Consumption, lets partners land customers in a private cloud setting, NetApp noted. The offering is available as an annual subscription.
“More and more partners are establishing private managed cloud and multi-cloud support services themselves based on NetApp technology,” according to Chacko and McMahon.
At the adoption step, the NetApp partner shifts to helping customers migrate production workloads to the public cloud. In private cloud environments, partners help customers incrementally deploy “right-sized compute and storage nodes” to boost adoption, according to NetApp.
NetApp partners have a few options for expanding upon the initial sale. For public cloud use cases, for example, partners can tap NetApp’s Cloud Data Services portfolio, which includes Cloud Sync for migration and Cloud Insights for hybrid multi-cloud monitoring and optimization. And integration between Cloud Data Services and NetApp’s HCI platform lets partners extend the company’s private cloud offerings to enable hybrid multi-cloud data management, according to NetApp.
Another expansion opportunity: Partners can position NetApp Kubernetes Service for application development on the company’s HCI platform or in the cloud.
“This would enable partners to attach high-value services focused on application lifecycle management in a hybrid multi-cloud environment,” the NetApp officials said.
To complete the LAER sequence, NetApp offers what the company describes as an “increasingly simplified renewal plan” that aims to help partners quickly finalize deals.
Remaining trusted advisors
The LAER approach within the NetApp subscription model intends to help partners avoid churn and encourage customers to renew subscriptions. Successful adoption and the resulting renewals cement the partners’ trusted advisor role among customers.
This model, according to NetApp, “provides NetApp partners with an opportunity to generate multiple, recurring revenue streams that have the potential to increase over time.”