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NetApp's recently hired channel chief, Bill Lipsin, who filled a position at the data storage and management company that sat vacant for about a year, has his work cut out for him as he touts a message of consistency and predictability to NetApp partners. Earlier this week, NetApp announced the departure of CEO and chairman, Tom Georgens; on May 20, the vendor reported less than stellar fourth quarter 2015 earnings -- subsequently announcing the layoff of about 500 employees.
About 80% of NetApp's revenue is generated by partners, the lion's share of which, about 750, are traditional resellers and 200 of which are systems integrators and/or service providers. In an interview with SearchITChannel, Lipsin, vice president of worldwide channel sales, addressed changes at NetApp and his vision for the NetApp partner community.
Bill Lipsin: When you have a tough quarter or tough business environment, to me that underscores just why you have to be a better partner than ever before. That's helping the channel initiatives, the channel conversations and the partnering that we're doing. We realize that we have to be even closer to our partners than ever before.
There are a few things I'd like to say to partners: first of all, even though you lose some people, the strategy is consistent. We're not changing our strategy; it's been validated with our customers and other key stakeholders inside and outside of NetApp.
There have been some changes in individuals -- you see that in other companies and you see that in sports teams where the coach leaves but the players stay the same. What we're working on now is a three year strategy for the channels that is integral to how NetApp is moving forward in the industry. That will then get mapped to ensuring we have the right programs, resources and investments in place to drive the channel side of the business.
The majority of our business is working with channels so that becomes not just an isolated channel conversation, but something that goes on throughout the entire company including sales, services, support, marketing and product development.
Expect that we'll be communicating to our partners as we start to crisp it up. Some of that will happen as early as next week at our partner summit in EMEA, and we'll be meeting with partners region by region. We also have an event called Insight in the U.S. we run on a regular basis -- Insight is more technical -- and to complement that we're running partner academies across the U.S. aimed at the sales organizations inside our partners. We'll be talking to the Canadians as well.
SearchITChannel: Let's talk about NetApp partners. In a July 2014 SearchITChannel interview with Regina Kunkle, NetApp's channel chief for the Americas, she talked about looking for new partners as well as shedding non-active partners. Is that strategy still in place?
Lipsin: NetApp has different needs for partners globally. In certain countries we do need to do additional recruiting. In other countries we need to invest more with existing partners who have a profile we believe will serve the customers we're trying to address, but also serve NetApp's objectives.
CDOT [Clustered Data OnTap] certification is a key objective for NetApp. And we're looking for organizations in certain parts of the world willing to invest to get to that next level; to get to how you manage data in a much more transparent and seamless way -- whether it's in the cloud or in your own private cloud.
SITC: What about the NetApp partner strategy in North America, in particular?
Lipsin: In North America you will see a very concentrated effort to work with selected partners to drive both CDOT and NetApp's expanded portfolio of products. That will translate into investments we make with certain partners, but I don't want to preclude the fact that we'll be doing some selected recruiting as well.
We'll be doing a combination of two things: investing in key areas; i.e., CDOT, flash, and converged infrastructure, with a focus at this point on the Cisco-NetApp FlexPod products. But we also announced a converged infrastructure play with VMware for their EVO:RAIL capability and we'll be expanding selectively for traditional VARs.
SITC: Also in my interview with Regina Kunkle, she mentioned NetApp was looking to do a major relaunch of the NetApp Unified Partner Program in 2015. Is that still in the cards?
Lipsin: I'll tell you what we have been doing for the last year; that is, looking very specifically at the profitability of our overall channel; how well our partners are doing with NetApp products and services; and also trying to understand where we can improve. At this point, we don't have plans to have a major relaunch at this time.
The one area where we are making additional investments is in CDOT programs, and that's happening as we speak.
What we're really doing is getting back to basics and making sure we're spending the time to put in place actions that address what we've been doing, which is to listen to our partners. We've doubled down on a few key areas with our partners: we've doubled [our personnel in]the channel marketing organization so we can not only more effectively talk about the expanded portfolio of products we have, but also enable our partners to take those products and solutions and sell more effectively to our mutual customers; and we're also adding additional sales capacity to work with partners in the field -- North America specifically.
We're going to focus on four key areas: modernizing the customer's data center and leveraging the cloud; how we transform their data protection to provide better backup and recovery capabilities by using the cloud and NetApp products in that area; converged infrastructure technology with FlexPod and VMware that really takes the heavy lifting away from the partners and gives a validated design for faster deployment; and accelerating the application utilization and there it's all about flash -- not flash as a point product, but as an overall data management approach.
SITC: Would you expand on the expanded sales capability you're adding? Are you saying that the company is changing the way its sales reps work with NetApp partners?
Lipsin: I'll go back to what I said that about 80% of our revenue stems from the channel. That suggests we're already working pretty effectively with our channel partners. What we're going to do, by adding more NetApp sales people, is accelerate that to add more assistance to work with our channel partners.
We will be and are looking at the current rules of engagement; making sure when we work with channels it's done as seamlessly and frictionless as possible. That will be a bit of a shift. I had a chance in my first few weeks at NetApp to meet with all the executive staff and talk about behaviors and engagement with our channels. Everybody in that room agreed it's absolutely critical we work together as effectively as possible.
So you'll see a little bit more refinement in taking that 80% number and doing even better than we did before -- so more salespeople, a little bit less friction and more re-enforcement of the things that we've done right in the past.
SITC: What type of friction have you seen in the past?
Lipsin: You get the usual one or two people who might find a deal and be more aggressive on [it] from a sales perspective. We just want to make sure that behavior is minimized or eradicated as best we can. It's nothing that other vendors have not seen in the past. NetApp is just going to make sure we're on top of it and that our people understand the channel is integral to our joint success in the market.
What we're trying to do is keep a level of consistency and predictability with our channels so they're not being whipsawed back and forth; that they know what to expect from NetApp; that they know we're going to continue to expand our product portfolio and that we're going to be as competitive as anyone in the market in terms of pricing and technology, and that our programs have a level of consistency and predictability allowing our partners to plan their businesses with us.
SITC: What are your top three goals for the year?
Lipsin: Number one is making sure partners understand we are extremely committed to working more intimately and closely with the channel and not just with words, but actions and investments to go behind them.
The second key goal is to make sure we educate and inform our partners in terms of what the entire portfolio at NetApp brings to them to be successful. Now that's an area that when we start to see how we're packaging our technology compared to the past; that is, how we're pricing our technology -- that's a critical area for us to make sure we get our point across to both our partners and our end customer.
The third goal is to help partners manage the transition from the traditional way of handling data and managing data to the new world of the cloud. And to expand a little bit more, it's making sure we future-proof the way they build solutions so that they're not left on an island with any specific point product. Instead, we've got a much more cohesive and holistic view of how we help them get there.
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