CRN Interview: David Crocker, NTP Software

NTP Software may not be a well-known name, but its software is widely used. NTP wrote the disk quota management system that Microsoft uses for Windows NT. Today, NTP offers Quota and File Sentinel, a policy management system that tracks individuals' storage use patterns. As part of that effort, NTP also launched a new, two-tiered channel program. NTP President David Crocker discusses the company's goal to drive 100 percent of its sales through the channel, as well as the solution provider opportunity in policy management applications focused on storage consumption, in an interview with Editor In Chief Michael Vizard.

CRN: Why is policy management for storage an untapped opportunity?

CROCKER: By controlling the behavior of your user, you are better able to manage and control your storage space. All of our products fall under the heading of User Tracking Modeling and Analysis, or UTMA. In the past, people used to just throw space at management problems because it was cheap. But in 2001 to 2002, people started to realize that throwing space at the problem for all those years has created more of a management problem. You'll see some estimates from analysts that have said that it costs somewhere in the realm of $8 to manage every $1 of storage resources. So every time you buy, for instance, $1 million worth of space, it costs you $8 million to manage that space, perhaps even on a yearly basis. Our products are all focused on mitigating that recurring 8X factor in the cost of management of space.

CRN: How does your product accomplish that?

CROCKER: We're modifying the behavior of the user so that users help with the control and management of storage space. Our product minimizes the time that users need from the network administrators because we have things like a Web-based interface that helps users help themselves. When they have problems, they don't have to make phones ring in a network administrator's office. If you have a user that has a 10-Mbyte quota and he exceeds that quota, not only will he get notifications from our product that say he is exceeding the quota, but also our notifications will tell him, 'Here are the things that you need to do or that we suggest that you do to remedy your problem of having used more space than you've been allotted.' In most cases, this completely eliminates the need for a network administrator to get involved.

CRN: What is NTP's relationship with Microsoft today?

CROCKER: We still have a very strong relationship with Microsoft. We see that Microsoft is moving in the direction of storage. It is our opinion that Microsoft is going to use the same philosophy, in that they will build something that could be included in the operating system but--if you want a very heavy-duty utility--you will have to go to their third-party partners and vendors like us.

CRN: What's NTP's approach to the channel?

CROCKER: In the past at NTP, we have employed a fabricated architecture worldwide. In other words, there are two programs. In the international area, we have a two-tiered sales distribution infrastructure where we have distributors and resellers under them. In the United States, NTP operates not only as a manufacturer, but also as the distributor. We do have resellers in the United States. In the United States, approximately half of our sales have been done direct and half of our sales have been through resellers. Over the next 18 months, we want to get to a model where 100 percent of our business is done through resellers and we do nothing direct. We have not really focused on that channel until just recently.

CRN: What's different about NTP's channel program?

CROCKER: We have a channel program that focuses on the business model of our channel partners. It ensures that anything that we do with our channel partners is compatible with their existing, successful business model. It comes with lots of support and lots of resources from the manufacturer to become, essentially, channel resources. It is built on a specific business plan that we built with our channel partners that ensures the success of any relationship.

We have a tool that crystallizes the business plan of the reseller. We'll sit down with the principal of a company and look at the characteristics of their company, [such as] what kind of product do they sell? Do the products meld nicely with the products that NTP sells? Are they selling to the same types of people? How much hardware do they sell? How much software do they sell? What kind of professional services do they offer? All these things go into our assessment of the resellers to determine if they're, in fact, compatible. We even look at things like how much money their salespeople make selling the products that they sell. Do they make at least the same kind of money selling our product? How much money are they spending in marketing and support of each salesperson's revenue that they bring in?

We want to make sure that we're not costing the reseller more money to sell our product. We want to make sure that the salespeople are going to be at least as effective selling our products as they are selling other products. It is that kind of perspective, in addition to making sure that we have in writing a firm business plan that says, 'Once we become a partner of yours, this is exactly what we're going to do together.' Although the specifics of the business plan are different with each reseller, we have through lots of experience been able to develop a business plan that we think is executable.

CRN: What type of resellers is NTP looking for mostly?

CROCKER: In most cases, we really are looking for resellers already interested in professional services. We are looking for resellers that have an installed base of their own. Those kinds of resellers would find NTP very easy to work with.

CRN: How many resellers does NTP have today?

CROCKER: Right now in the United States, I think there are less than a dozen today. And we are recertifying all of our resellers, including the people that are reselling our products today. By the end of the year, we would like to have about 30 resellers in the United States. Typically, they are separated by geography. In some cases, there is vertical separation to the resellers who work very hard at avoiding channel conflicts. Obviously, there would be absolutely no conflicts between the manufacturer and the resellers. They would be controlled to the degree that we want to make sure that we avoid any channel conflicts. The reseller that invests any time and money into our program would be ensured that when he finds business, he is the one that's going to close it.

CRN: Will NTP ever to take this technology to market through distribution?

CROCKER: I think that is step two. I'm certain that there are both pros and cons to focusing on the distributors immediately. We've had to make a decision, and we decided to go directly to the resellers first. I guess I'm certain that at some point in the future--and I'm not sure how far out that is--that distribution might become an important component of our channel strategy domestically. Right now, I think resellers that are Microsoft-centric, storage-centric and network appliance-centric are the best hits for us.