Storage vendor Network Appliance Inc. has decided to drop direct and instead connect through channel distribution to its lower-level resellers.

“”This is our entrée into two-tier distribution in North America,”” Jeff Goldstein, Canadian general manager for NetApp, said this week after the

company announced distribution agreements with Arrow Electronics Inc. and Avnet Hall-Mark.

Until now the company has sold either direct to its 14 Canadian resellers or to select customers.

But NetApp sales staff was spending up to 30 per cent of their time on what he calls logistics, such as managing orders and quotes.

With a full channel distribution model “”we can give back a bunch of time to our channel sales people to do more higher-value work with resellers and their sales people,”” said Goldstein, “”and let the distribution channel manage the logistics, which they do well.””

Local channel distributors may also give resellers more flexible financing options, he added.

The Canadian resellers have until the middle of August to choose which will be their supplier.

With the decision, a fight for NetApp resellers between Arrow and Avnet will start, and spokesmen for the two new channel players were quick to promise their companies offer the most benefits.

“”What we’re able to do is bring the value offering we have with our sales teams, lead generation and logistics, and maybe help them from a financial or a marketing end,”” said Jeff Bawol, vice-president of Avnet’s enterprise software and storage business unit.

While there won’t be price-cutting, Bawol said Avnet “”will be very aggressive about showing the reseller how and why we’re capable of growing their business at a better and quicker rate than Arrow is.””

Lance Sedlak, Arrow’s director of marketing for enterprise storage, said his company is in the middle of building a dedicated NetApp sales, marketing and technical support staff in Canada and the U.S. There will also be NetApp-focused marketing and training plans for resellers, he said.

Arrow resellers also have Internet access to its two U.S. data centre labs for doing demonstrations and testing customer solutions, Sedlak said.

“”We believe we’ve got the best support system for helping resellers succeed in the enterprise storage market.””

The NetApp distribution program will follow that laid out in the U.S., Goldstein said, with details specific to Canada (such as training, tax and customs issues) expected to be settled shortly.

Goldstein emphasized that by making the change NetApp isn’t opening up the number of resellers, except to add in areas of the country it isn’t represented in. For example, he said, there are no company resellers in Manitoba or Saskatchewan.

Nor, he added, does the five-level reseller model or discounts change. There are Global partners (such as IBM and Accenture, who will continue to buy direct from NetApp), Star partners (none in Canada yet, although Goldstein is looking), gold, platinum and authorized resellers.

NetApp has three product lines: Filer enterprise and workgroup storage, which makes up about 80 per cent of sales; NearStor disk-based backup and recovery storage; and NetCache accelerator hardware.

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