NetApp Pushes Cloud Storage Growth, Partner Incentives

The company is incentivizing the "cloud-first" partner.

James Anderson, Senior News Editor

June 28, 2018

4 Min Read
Cloud Storage

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Storage provider NetApp is exhorting its partners to take a “cloud-first” approach.

The company aims to align its channel community with the overall shift it’s making to provide products and services in the public cloud.


NetApp’s Jeff McCullough

“We’re putting our rewards behind it. We’re going to pay handsomely for it. And we’re going to all participate in the opportunity, and that opportunity we think is unprecedented,” said Jeff McCullough, vice president of Americas partner sales. He and other company executives spoke at a partner event this week in Scottsdale, Arizona.

McCullough told Channel Partners that his emphasis is recruitment, but “reactivating” partners who do a minimal amount of deals and offer a minimal part of the NetApp portfolio.

“Our expectation is that to be a NetApp partner means you’re taking NetApp across your entire customer base,” he said.

McCullough laid out multiple goals for NetApp partners in the next year, including: making NetApp’s cloud storage service Cloud Volumes a core component of their business; earning at least $1 million in hyperconverged infrastructure; helping NetApp grow its share of the flash market to become the top vendor; and contributing to NetApp growing another $150 million in its FlexPod converged infrastructure business.

McCullough listed several “imperatives” for partners, including building recurring revenue through cloud-native services, using NetApp’s Cloud Marketplace, and increasing attached-services revenue.

He noted that the profile of NetApp’s most profitable partners sold $7.41 in secondary products and services for every $1 in primary products.

But while cloud represents the next big wave of evolution for the channel, McCullough said many partners were concerned about taking the step to cloud-first. With that in mind, the company has been rolling out several tools to help its partners make new investments. There’s new lead-generation and a new marketing-resource center. Partners will also get a variety of rewards and rebates, including a new $5,000 rebate for specializing in specific cloud capabilities, and 10 percent and 15 percent incentives for partners that lead with cloud.

“We’ve got to help our partners get a level of confidence, and I do think we’re uniquely positioned to do that,” he said.

NetApp executives reiterated that it the company is making a dedicated shift to the cloud, rather than using cloud as an on-ramp for hardware.

“It’s not about us trying to create a substitute cloud on-premise[s],” McCullough said. “It’s about us trying to create true value in the cloud.”

He shared a story about a partner whose customer planned to move away from on-prem and assumed that its relationship with the partner was at an end. The customer made a “break-up call” to the partner, which retained the client by offering Cloud Volumes ONTAP.

Dave Hitz, NetApp’s founder and executive vice president, reiterated that the company and its partners should “lead with cloud” as more and more customers adopt a cloud-first technology.

“Our conclusion is that our strategy is to lead with cloud if we have a lot of customers increasingly becoming cloud-first customers.”

But mind you — this is not a hybrid cloud strategy. NetApp executives took pains to …

… distance themselves from that posture.

“I’ll tell you how customers interpret hybrid cloud. Hybrid is what dying on-prem vendors say when they’re admitting there’s a little cloud, but they really want to sell you gear,” Hitz said.

Brett Roscoe, NetApp vice president of marketing, told Channel Partners that customers shouldn’t feel locked into any particular infrastructure.

“We’re not afraid of our customers running to public cloud, because we can help them there as much as we can help them on-prem, unlike many of our competitors,” he said.

NetApp is encouraging its customers to frame their customer conversations around use cases and workloads rather than products. Roscoe said ending with the product creates a much more flexible and productive discussion than starting with it does.

“In fact, talking about a use case and a workload allows us to talk about the entire portfolio,” he said. “So how does an AFF product that can accelerate on-prem capabilities connect to the cloud and let them take advantage of new analytics or AI engines that live in Microsoft Azure, Google Cloud or AWS?”

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About the Author(s)

James Anderson

Senior News Editor, Channel Futures

James Anderson is a news editor for Channel Futures. He interned with Informa while working toward his degree in journalism from Arizona State University, then joined the company after graduating. He writes about SD-WAN, telecom and cablecos, technology services distributors and carriers. He has served as a moderator for multiple panels at Channel Partners events.

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