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NetApp is enlisting the channel in its cloud strategy, providing financial services and revenue opportunities for partners selling the company's cloud offerings.
The Sunnyvale, Calif., company in past years was best known for its storage hardware but has more recently invested in software, cloud and a subscription model. The company's acquisitions over the past couple of months illustrate its technology direction. In March, NetApp purchased Talon Storage, a software-defined storage vendor. And in April, the company acquired CloudJumper, which provides virtual desktop infrastructure technology
Against that backdrop, NetApp is encouraging its partner base to sell its NetApp Cloud Data Services, consumable services and subscriptions available through the AWS, Google Cloud and Microsoft Azure marketplaces. Examples of Cloud Data Services include Cloud Volumes OnTap, available on AWS and Google, and Azure NetApp Files.
Jim Elder, Americas channel chief at NetApp, said an important goal this year is to make NetApp partners aware of the company's broader "lens of opportunity."
NetApp Cloud Data Services: Partner incentives
Incentives are now in place to support that shift. For starters, partners selling NetApp's cloud portfolio through a hyperscale cloud provider receive a 5% incentive payment on each deal. The incentive is paid monthly for the duration of a customer's subscription. Partners that achieve NetApp's Cloud First Preferred status qualify for an additional incentive of 15% of cloud marketplace deals. To obtain Preferred status, a partner must close five NetApp Cloud Data Services deals or book $300,000 annual recurring revenue (ARR) per quarter, obtain Cloud Data Services accreditation for two sales and two presales people, and submit one customer cloud reference.
Cloud First Preferred partners that exit NetApp's 2021 fiscal year, which ends April 30, 2021, with $500,000 of consumption are eligible for an additional $10,000, according to NetApp.
Additional incentives, which apply to cloud and on-premises products, stem from landing net-new accounts. Partners get a 10% revenue bonus on net-new customers with NetApp's New Account incentive. Partners can stack that incentive with the Run to NetApp competitive take-out incentive when they displace a NetApp rival. The stacked incentives can grow to 20%, enabling partners to earn up to $240,000 per deal. In the case of a cloud deal, the incentives are based on ARR.
Gold-, Platinum- and Star-level partners are eligible for those incentive programs.
The incentive programs reflect an updated philosophy as NetApp pursues its cloud strategy. The company has "removed the connection" to products that its incentive programs have had in the past, said Chris Lamborn, NetApp's head of worldwide partner go-to-market and programs.
"We are not concerned about what you put the data on as far as where the workload sits," he said. "As long as it sits on something connected to NetApp; it could be in AWS, Azure or Google."
That approach is in keeping with NetApp's Data Fabric strategy, which seeks to offer various data services across multiple clouds and on-premises devices.
Enabling partners in the cloud
NetApp's partners are in various stages of providing cloud services. The channel mix includes cloud-native specialists and systems integrators that have transitioned to cloud, Lamborn said. Other partners have yet to adopt the cloud approach.
"There are still a lot of traditional integrators who are uncertain how to move," he said.
NetApp, however, is working to enable partners to provide cloud services. One example is NetApp's cloud design workshops. NetApp has been offering those sessions, but Elder said the company is now helping partners host the workshops with their own personnel.
"We are building up partner capabilities to deliver those assessments," Elder said.
Jim ElderAmericas channel chief, NetApp
The cloud design workshops focus on a cloud deployment's storage component. The workshop's deliverable is essentially a blueprint that helps a customer identify which applications and data make sense to move into the cloud -- and which don't.
Developing cloud skills, moreover, will prepare channel partners to focus on additional technologies. Lamborn called the cloud an "incubator" for emerging fields such as AI, DevOps and IoT. To help partners down that path, NetApp is encouraging partnering among its technology partners and channel partners. For example, NetApp partners with Nvidia in the AI space. That alliance could help partners create managed services or custom offerings around Nvidia's technologies.
NetApp has been using the partnering-with-partners approach in its alliance with Cisco and the companies' FlexPod data center platform offering.
Support, value-added services and technology are among the facets driving NetApp's partnering-with-partners strategy, according to the company. For example, cooperative support for the FlexPod ecosystem is handled through joint organizations such as Cisco's Technical Assistance Centers. As for value-added services, NetApp teams with partner organizations to identify areas where they can monetize using NetApp tools and software, the company noted.
Not all of NetApp's partners are fully invested in the cloud, but those that have embraced the technology are beginning to see the benefits.
"It's been an interesting journey with our partners," Elder said. "Up until a year ago, all we heard from partners was they were concerned with, 'How do I make money in the cloud?' You don't hear that much anymore. They figured out how to engage with customers in that cloud discussion and can make a lot of money-wrapping services around the cloud business."