Channel is rewarding work for HDS

Storage vendor hopes to snatch market share from rivals by rolling out incentive schemes to lure partners

While many of its rivals have hit the acquisition trail in pursuit of growth, storage vendor Hitachi Data Systems (HDS) has been investing in partners to wrest market share from its competitors.

Harvey Smith, HDS regional sales director for the UK and Ireland, said: “We want to take market share from our competition and acquire new customers, and the best way to do that is through partners.”

The vendor is rolling out several partner-enablement initiatives, the cornerstone of which is its newly launched rebate programme, which rewards partners for luring in new customers. “This is the first time Hitachi has done that kind of thing,” said Smith.

“We ask partners in which [technology areas] they would like to work with us and give them a rebate every time they sell something from it. Outside that, any new business they close will win them additional rebates,” he added.

The vendor has also worked with its distributors, Avnet and Zycko, to roll out personalised business plans for partners, training programmes and product demonstration facilities.

“Avnet has the full suite of products at its Bracknell office and Zycko has its demonstration centre in Cirencester, which is a big change for us,” said Smith. “The training courses are great for showing partners how to sell our technology, but seeing it in action has helped some of them close deals in key accounts.”

Mike Fearon, divisional leader of HDS and NetApp at Avnet, said the distributor has ploughed a significant amount of investment into supporting the vendor’s growth plans.

“[Avnet] has shown commitment to partners by putting together joint value propositions, training programmes, providing marketing support and boosting investment in pre- and post-sales resources to drive revenue from HDS technologies,” he said.

“The importance of enablement through training and business planning should not be underestimated, as many partners need additional support to create differentiation.”

Since the start of its new financial year in April, HDS has also been laying on free marketing support for some of its partners, added Smith.

“We used to ask partners to contribute 50 per cent of the cost,” he explained. “Now, in cases where we have established that they really do follow up on the leads those campaigns generate, we have offered to run them for nothing.”

Taking the initiative

HDS has also extended its buy-back scheme to its enterprise product lines, which reward end users for swapping their incumbent storage products for HDS kit. Smith explained: “We get the competitors’ products taken off the floor, destroy them, and then give the customer back some money and a certificate of destruction.”

The channel-friendly initiatives are part of a wider plan that HDS hopes will lead to the channel making a bigger contribution to its overall business by the end of the year.

“About 60 per cent of our business is generated by the channel and our European aim is to close the year with that figure at 70 per cent. We will not achieve that if we just tell partners to go out and get us some more customers. We need to show them how and give them incentives to make it worthwhile,” said Smith.

Gurdip Kalley, business development manager at HDS Gold Partner Simplified Storage Solutions, said the vendor’s previous attempts at partner enablement have yielded results for his firm.

“In the past, we have seen a direct correlation between the amount of business we have done and the rollout of new incentives,” said Kalley.

“For example, in our previous financial year, we saw a 600 per cent year-on-year rise in sales of HDS’ mid-range AMS products thanks to its partner-enablement activities.”

David Galton-Fenzi, sales and marketing director at Zycko, said it was good to see HDS rolling out these programmes and taking a more assertive approach with competitors.

“HDS has a reputation for being a mild-mannered, sleeping gentleman in the storage industry,” he said. “Its products are a bit more expensive, which has allowed other vendors to take deals from it, even though their technology is not as good. I think it has learned that if it wants to stop that happening, it needs to get more aggressive with the channel.”

Making it easy

As well as its growth strategy, HDS’ renewed focus on partner enablement also feeds into another of the company’s aims, added Smith, which is to establish itself as its partners’ favourite vendor.

“I want all our partners to say we are the most profitable and easiest vendor they work with,” he said. “We want to be the first vendor they think about when dealing with new customers. We do not want them talking about the competition.”

Kalley said that so long as HDS maintains its hands-on approach with partners, it should have no problem achieving that. “We know everyone who works there and can always get them on the phone,” said Kalley. “As the firm has grown, that has not changed. But with some vendors, as they have got larger through acquisitions or organic growth, they have become more anonymous and difficult to deal with.”