Network Appliance Finally Does Distribution

Under a program unveiled Monday, Sunnyvale, Calif.-based NetApp has signed agreements with Arrow Electronics' North American Computer Products group and Avnet Hall-Mark under which about 100 of its solution providers--but not its global and large regional partners--will be required to place orders through the distributors.

"We always said it was a matter of time, not when we would do it," said Leonard Iventosch, vice president of channels at NetApp.

Iventosch said NetApp's goals for bringing its appliances through distribution are two-fold: let the distributors take care of administrative details so NetApp can focus on its core business, and use the distributors to expand its business to even more solution providers. "Our channel sales are growing three times the rate of the rest of the company," he said. "We can't scale without partners."

Iventosch said Arrow and Avnet have access to partners NetApp would love to touch. "They have partners in the midmarket, and that's where we want to be," he said. "Our direct team focuses on strategic customers. We are absolutely counting on our channel team to drive business in the midmarket."

For existing NetApp solution provider partners, about 80 percent of which currently work with one or both of the distributors, Arrow and Avnet can offer stronger lead generation, technical support and financial support than NetApp is able to provide, said Iventosch.

Michael Fanelli, western regional manager at Sales Strategies, a Metuchen, N.J.-based NetApp partner, said that whether he buys direct from the vendor or via one of its distributors doesn't matter, as long as he and his customers get the same sales and engineering support.

Sales Strategies currently has good relationships with both Arrow and Avnet, and can actually get better financing via the distributors than from NetApp, Fanelli said.

NetApp in the past two years has turned out to be a good partner, said Fanelli. "But it wasn't always so," he said. "Prior to that, it was on the same cycle as everybody else: partner-friendly one month, 'partner-who?' the next."

However, at least two direct NetApp partners are glad they are large enough to avoid going through distribution. "Network Appliance products need vendor configuration, and making us go through a distributor would add a layer of complexity," said an executive at one of the solution providers.

Jeff Bawol, vice president and general manager of Avnet's Enterprise Software and Storage Business Unit, said NetApp is only his company's seventh vendor partner. He said Avnet will offer solution providers logistical support, lead generation and other programs.

Avnet will also be looking to recruit some of its customers to resell NetApp's appliances, said Bawol. "We're strong in the midmarket and can help NetApp build their channel there," he said.

While Avnet plans to expand NetApp's channel to new solution providers, Bawol said not to expect a large push to sign up new partners. "It's not about numbers. . . . The last thing we want to do is overdistribute NetApp," he said.

Arrow plans to have NetApp equipment in its two storage labs by mid-August, said Mike Long, the company's president and COO.

Long said that in addition to working with NetApp's current solution providers, about 65 percent of which are already Arrow customers, the distributor has about 300 solution providers that are candidates for working with the vendor. "How many we bring in depends on what NetApp wants from its distribution base," he said.