Making more of its share

Georgens: "Absolutely convinced" of reaching the top EMEA spot by 2012

Storage vendor NetApp has set its sights on achieving top dog status in EMEA, with the help of its partner community.

Andreas König, general manager for EMEA at NetApp, said the goal was well within its capabilities. The vendor will be working earnestly towards this goal over the next two-and-a-half years, planning to achieve that position across storage and data management markets in the region.

“We will achieve this by 2012. I’m absolutely convinced of that, but how we are going to get there is not through being arrogant and doing it alone, but through working very closely with our partners,” he said.

König revealed the plan while speaking at NetApp’s latest European partner conference, held in Athens last month.

Around 72 per cent of NetApp’s revenue is generated through its channel partners, a figure he explained the company is hoping to increase through the acquisition of new ones.

“Eighty per cent of our business is done currently through the channel and I have no doubt that this figure will one day reach 100 per cent,” he said.

Rich Fenton, consulting systems engineer at NetApp, said the ability of its partner community to tap into the mid-sized enterprise market is going to play an “absolutely critical” role in getting there by 2012.

“Over the years, we’ve done a lot of work in building up business from our large enterprise accounts,” he said. “But you can only grow so much as a company by focusing on accounts of that size.

“What we need now are resellers that understand and can articulate our values to smaller firms because that is something as a vendor that we cannot do alone.”

Targeting mid-size firms
Conquering the mid-size enterprise market, which contributes around 30 per cent of the vendor’s total revenue, has been a work in progress for NetApp since the launch of its mid-size customer initiative in July 2008.

The plan was to make it easier for NetApp’s partners to infiltrate the sector through the provision of dedicated product offerings and marketing tools tailor-made for VARs to sell into that market.

“On one hand, you could say it [targeting mid-size firms] is not a new initiative for us because customers already understand the value proposition,” said Julie Parrish, vice president of global partner sales at NetApp.

“But what’s going to help us drive our market share forward is doing a better job of simplifying the buying process for customers, through our partners.”

This simplification process has included, among other things, the addition of pre-approved pricing for NetApp products – a move the vendor hopes will save its VARs time, freeing them up to chase other business.

“It can take between four and 10 quotes for every order and that costs money, slows things down and makes things difficult – but that can now be avoided and the whole process should run a lot more smoothly,” added Parrish.

As well as simplifying the pricing process, NetApp has also gone to great lengths in recent months to ensure that its products represent better value for money to the mid-size enterprise community.

In September this year, this resulted in a minor overhaul of its FAS2000 storage system family – a product range aimed at the small business community.

A number of technical enhancements were made to the range’s entry-level offering – the FAS2020 – and a reduction in its overall price followed. The vendor also introduced a new family member – the FAS2040. This is a product designed to appeal to medium-sized users that require more performance and capacity than the FAS2020 can provide.

Hammer, a Silver partner and distributor of NetApp, has played a role in bringing the FAS2000 line to NetApp’s reseller community. Jason Beeson, solutions director at the distribution giant, said: “NetApp is a proven storage leader around the world, and we have thrived on being an approved NetApp Silver Partner Programme distributor.

“Hammer has acquired a significant number of partners for NetApp’s stable of resellers, and working in partnership with NetApp, we are committed to supporting Silver Partner resellers through every element of the sales cycle.”

The vendor on the first day of its Athens channel conference also announced updates and a relaunch of its partner enablement programme, GetSuccessful. The programme, launched in October 2008, offers NetApp’s partners marketing and training skills aimed specifically at meeting the needs of mid-market customers.

These are just two examples of the work NetApp is doing to make its product offerings more appealing to middle-sized customers.

Paul Sweeney, managing director of NetApp Gold partner ANS Group, said NetApp’s readiness to react to changing market conditions is one of the reasons its products have been such a big seller for his company.

“To give you some kind of idea of the difference NetApp has made to our storage sales, in the last three months we have sold more of their products than in the three years we have been selling Hitachi.

“I’m not sure if it is our enthusiasm for the products or NetApp’s overall approach, but it is really paying off for us. We definitely feel we are on a winning team.”

Driving market share
While NetApp will be relying on its VAR community to target smaller businesses, its family of global system integrators (SIs) will also play an important role in the firm’s race for market share in EMEA.

This is because, explained Parrish, integrators are in a much better position to have “higher level conversations” with larger enterprises about their data consolidation and virtualisation needs because they typically look across networking, storage and servers.

To ensure that they are well equipped to trap that business, NetApp will be giving more sales and technical resources to its global SI partners. John Malabon, director of NetApp Star programme partner Alpha, said he thinks this is a definite step in the right direction.

“The biggest challenge for NetApp is not having enough specialist partners to help them target the larger enterprises that are spending a lot of money on storage.

“The company is strong in the mid-market, and working to build share in the MSE sector, and I think big growth will follow once they get more specialist partners on board,” he said.

Only time will tell how successful NetApp’s bid for market dominance in EMEA will be, but if its second quarter fiscal year results are any indication, things seem to be heading in the right direction.

The results, released days after NetApp declared its 2012 statement of intent at its partner conference, revealed that the vendor had more than doubled its profits during its second quarter – exceeding the company’s own expectations.

Its net income was also shown to have rocketed 123 per cent to $96 million, compared to the same period last year – despite NetApp’s revenue remaining essentially flat at $910 million during that time.

Tom Georgens, chief executive at NetApp, said its financial performance showed that customers valued its products. The strong performance will need to continue for at least the next two and a half years if the vendor wants to make good on its 2012 objective.

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