Storage Start Up Finds VAR Advice Compelling

Months away from launching itself as an official business, as well as delivering a bona-fide product to market, the company opened up its back doors to resellers and customers in an effort to give them a pivotal role in bringing their product to market.

It was never part of the plan, even when founders Phil Soran, Larry Aszmann and John Guider initially started the company last year. The trio gained a solid reputation within the storage technology community as the founders of XioTech which was sold to Seagate Technologies in 2000 for $360 million. Compellent, which reportedly is creating a data recovery tool for mid-market businesses, was the only Minnesota technology startup to receive venture funding in 2002. That generated a strong buzz among resellers as the company set up shop again in the Midwestern municipality of Eden Prairie.

"People were curious about what we were doing and wanted to get involved early," recounts Soran. "Our first reaction was, 'Well, we don't want to tell you because we are too far away from product.' But after getting a lot of calls from resellers and end-users, we started to think we needed to take advantage of this and be opportunistic."

Compellent executives are still tight-lipped about the specifics of what they are developing, but that didn't stop them from creating what Soran calls the Compellent Customer Council (also known as C3). Quite simply, a handful of resellers were contacted and encouraged to round up some of their customers. Meetings were held, in which resellers and customers were brought in for hours-long sessions where they were asked for all kinds of feedback. They started with one C3 session and with two resellers. But it has grown to 35 individuals which make up these councils and they meet once a month for at least three hours. In a three-month period, they have held nine C3 meetings. Customers are asked everything from what are their pain-points, to what features should be included first in the product's initial release.

"And they are also bringing in partners and asking, 'What would you like to see in the product?'" says John Dusek, a reseller with Convergent Solutions Group. "And that has been very refreshing. Most companies, by the time they come out to the partners and resellers, they have already made all the programs and made all the plans. Then they say, 'This is the way you are going to take it. Good luck.' I've been in this business for 19 years; this is the first time I've seen it done."

Resellers generally facilitate the C3 meetings. Not only do they have a say in the product, they have input in developing the company's partner and reseller programs. Once officially launched, Compellent plans to generate revenues 100-percent through the channel. Executives at Compellent point to a number of advantages for resellers and partners by giving them this sneak preview of the company: they get exposure to the product along side their customers.

"They are getting exposure to the product alongside their customers," says Soran. "Guess what they are able to do then? They are able to start in advance building service and support offerings that are appropriate for this product set. What happens is it preloads their service development, it preloads their customer base and it preloads their revenue."

Reseller Dusek brought in about 12 of his clients to participate in the C3 sessions. About 10 percent of his customers are using storage area networks. That means another 90 percent eventually are going to join the SAN band-wagon. Dusek believes that if Compellent can put together a small version of their product tool, a package that fits in the $20,000 range, it would fill a void that currently exists in the market today.

"There are hundreds of small-to-medium size business looking for solutions like big companies but at a smaller dollar price," says Dusek.

No doubt, there is always room to improve the way resellers interact with vendors and suppliers, says Gary Orenstein, vice president of marketing at Compellent. One way is to fine-tune specific product requirements; another is to fine-tune product offerings in such a way that they can lead into service offerings for resellers. If resellers want to increase their service offerings, they will need an underlining set of features that tie into that.

"So what we were able to do is not just make adjustments to the technology roadmap but make adjustments to our business interaction roadmap so it could serve the channel," says Orenstein. "Both end-users and resellers have a lot of input in formulating the product. It really gives them a sense of ownership. And the resellers are getting a chance, early on in the process, of building a customer-base in advance of signing up for a new offering."

Soran says he understands that different resellers have different skill sets. One may be good at remote replication and disaster recovery sites, while another is good at hosted sites. They have met with one resellers partner, where they discussed building some additional infrastructure and service products that would layer on top of Compellent's technology infrastructure. Now that offering is available to all partners and resellers who sign up.

All of this work seems to have generated some good-will among customers toward Compellent. Michael Roller, an IT manager at the Minneapolis, Minn., law firm of Fabyanske, Westra & Hart, P.A., has attended at least two C3 sessions and was impressed to find out that a suggestion he made during the first meeting was taken seriously enough to be implemented into the product by the second session. Did he find Compellent's strategy a different approach all around? "I never had anybody ask. I'm not big enough for people to ask me. They ask a huge player."

And the product has turned out to be more than just vaporware. "This really does look like an exciting product," he says. "And these people know my size and know my market."