NetApp Recruiting Solution Providers For Service Business

Sunnyvale, Calif.-based NetApp has put the word out to its solution providers that it wants them to become service providers on the company&'s behalf, said Dan Warmenhoven CEO of the storage vendor.

To that end, NetApp has just wrapped up a pilot program that offered a limited number of partners training and self-certification opportunities around NetApp services, Warmenhoven said. “Now we&'re ready to roll the program out worldwide,” he said.

NetApp posted strong growth from services in its second fiscal quarter ended Oct. 28, hitting $58.3 million, up from $38.4 million a year earlier.

Going forward, however, more of that growth should come with the help of the channel, said Amy Rao, CEO of Integrated Archive Systems, a Palo Alto, Calif.-based storage solution provider. “NetApp is not looking to grow their own professional services,” she said. “They are looking to do it through partners.”

Rao said she sees two main services opportunities from NetApp going forward. The first is around NetApp&'s new security offering, based on the company&'s June acquisition of Decru, a developer of appliances that encrypt data as it is being stored.

“Decru has become a big part of NetApp&'s total solution,” Rao said.

NetApp&'s data security business, while still small, is expected to grow quickly, Warmenhoven said. It will account for about 1 percent of NetApp&'s business this quarter. He said security revenue should hit about $15 million this fiscal year and grow to between $35 million and $50 million in the next fiscal year.

According to Rao, the second big opportunity is migrating data, especially from older versions of NetApp&'s Data OnTap operating system to the newest version, Data OnTap 7G. “There&'s a tremendous amount of migrating to be done,” she said.

Warmenhoven said the channel accounts for 50 percent of NetApp&'s North American revenue and 60 percent of its worldwide revenue. The storage vendor has high expectations for NetApp sales growth in the channel, he said. “We&'re telling [solution providers] we expect their revenue to grow 40 percent this [fiscal] year.”