NetApp Ramps Up Cloud Opportunities

NetApp’s partners have a growing portfolio of cloud services to offer in 2019.

Jeffrey Schwartz

January 2, 2019

9 Min Read
Cloud Computing

The past year was significant for NetApp in its march to transform from a traditional storage company to a supplier of data-center infrastructure, ranging from hyperconverged systems to a multicloud platform and services provider.

Milestones in 2018 include the launch of a joint venture in China with Lenovo, new or extended alliances with Cisco, Commvault, Red Hat, VMware and Amazon Web Services, among others.

Offering multiple routes to market through a mix of traditional partners and those who offer managed digital and cloud services has played a key role in that transition with new recruitment efforts that include the company’s new Cloud First partner program, which now has 71 partners, up from about 15 when the company first launched it in 2017.

NetApp’s partners have a growing portfolio of NetApp cloud services to offer in 2019, following the recent rollout of its Cloud Volumes enterprise file service in the Amazon Web Services and Microsoft Azure clouds, with Google Cloud Platform (GCP) in preview, along with tiering services for its capacity-based, native cloud storage service – Cloud Volumes OnTap – and container support for its Trident open-source container platform.


NetApp’s Jeff McCullough

Jeff McCullough, vice president, NetApp Americas partner sales, has guided the company’s recruitment and incentive efforts. He talked with Channel Futures about NetApp’s new portfolio and alliances.

Channel Futures: At NetApp C3 [the company’s Channel Connect Conference], you launched new incentives for partners specializing in cloud capabilities and for leading with cloud. What was the key focus?

Jeff McCullough: We’ve moved to focus most of our benefit dollars around the things that matter, like growing cloud, growing hyperconverged and growing flash. And we’re doing that because those are the three biggest growth areas of the market. When you look at where the dollars are moving, it’s happening in cloud storage and it’s happening with hyperconverged, although converged also continues to be a growth segment of the business. The traditional converged segment with FlexPod also continues to do well. And then finally, flash — where our cloud-connected flash platform has taken us to the No. 1 position [according to IDC in October].

CF: Can NetApp keep that momentum going in flash storage?

JM: While that’s great, it’s just a data point for one quarter. Our success is measured over time and we’ve delivered consistently in terms of taking share and growing in the flash segment over many quarters. We’ve got more customers, both net-new customers and our existing customer base, making that pivot over to NetApp flash and taking advantage of its transformation benefits for their on-premises data centers. And if you consider the NetApp OnTap environment, which is the biggest storage operating system in the world, that is now available in the cloud. We offer a nice road map for customers to move to the cloud or to move applications and workloads to the cloud and really be able to deliver excellence in the world of hybrid.

CF: The rollout of volume of Cloud Volumes [NFS/SMB file service] is a whole new area for many of your partners — at least in that respect. How have you prepared partners for Cloud Volumes?

JM: Enablement is one of the big parts of our partner investment area. In June at C3, one of the things we added was …

… our public-cloud integrator specialization. And that is for our partners, and it’s really their onramp into beginning their certification process for Net App for selling our cloud portfolio. And in addition to that, we’ve offered dollars to help fund the training of their people and partners, to get the education that they need for both the NetApp-delivered products and training, as well as the training from third-party providers. That specialization program is really the first step. As partners develop and build out their cloud businesses – which many have – and are certified in one or more of our public cloud partner businesses, like Microsoft and the CSP certification for Azure, that can go along with building up their practice capabilities. There’s a set of certification requirements as well as revenue requirements that can ultimately enable them to come into our Cloud First partner program.

CF: How does Cloud First fit into NetApp’s overall partner strategy?

JM: It’s our top tier of partners that are not only educated about our portfolio of products and how to position them, but they have a practice built around one or more of the cloud-partner businesses. They’re facilitating the fulfillment and building of products to their customers, including the consultation and the expansion and the add-ons and they really are managing the customer experience in cloud.

CF: What’s the proposition of becoming a NetApp Cloud First partner?

JM: It allows them to get connected with our sales organization and analyze and participate in this ecosystem. Our cloud business is a great attach story. It’s for partners that are traditional NetApp partners and are selling infrastructure on premises. It enables them to go and talk to a customer about a cloud solution, to be able to sell Cloud Volumes if they’re looking for an “as a service” offering or Cloud Volumes OnTap if they’re looking for fixed capacity offerings. There’s a great opportunity for our partners who already know OnTap because they can deliver OnTap to build and sell cloud solutions as an attach to the on-premises storage. It’s a great way to accelerate revenue and it’s a great way to accelerate the cloud revenue.

CF: Are you finding partners that aren’t ready for this?

JM: We haven’t met a partner that doesn’t have a cloud strategy. Their strategies will vary. Some are just reselling cloud services such as AWS because their customers are asking for AWS. And that’s fine. But those are the partners that most commonly say, “I’m not really sure how I make money in this in the long run.” And now what we offer is the opportunity to take that, if you will, vanilla cloud resell motion and upsize it with the ability to add Cloud Volumes for example, which enables them the ability to expose new workloads. The customer might be looking for just basic cloud storage such as a backup repository, or they want to use it as a snapshot target for number of uses. But when you have an enablement partner that understands how Cloud Volumes supports NFSv3,  all of a sudden they now have a solution for that customer who has legacy Unix applications. That provides a whole different way of thinking about the cloud. So, when I think of attach, it’s not just throwing in some licenses, it’s actually creating and exposing new workloads.

CF: What other new services are these cloud partners offering?

JM: There are some really compelling things that are just scratching the surface right now. Partners who are pushing their way out in front are moving into …

… cloud application development. Look at the acquisition rate of channel partners that are acquiring software companies — small little groups that are doing application-development work because they want to get more ingrained in the longer-term opportunity here, which is not only selling customers infrastructure, even in the cloud, but becoming trusted participants in their application development process.

CF: How do these come together?

JM: Look at our new hyperconverged infrastructure our new Red Hat platform or if you’re looking at Trident with Kubernetes management. I’m not saying that every partner has to go deep on all this stuff, but at Red Hat’s partner conference, these partners are all working on selling next-generation application platforms for their customers. They’re not just selling the hardware right or reselling Red Hat licenses; they’re actually doing the consultative work on deals. We have partners who are great NetApp partners, who sell everything including OnTap Cloud Volumes and data protection. There’s a whole portfolio that doesn’t require anything to get plugged in.

CF: Are these all partners that are cloud specialists?

JM: We have a handful of these born-in-the-cloud partners that don’t have hardware businesses. And they were some of the early Cloud First partners and they’re very interested in Cloud Volumes and Cloud Volumes OnTap. And then some of the other partners will be interested in things like Trident because it aligns to their focus. When I talk to partners, my message is … if you’re a NetApp partner, it’s probably never been a better time to be a NetApp partner. We’ve brought a lot of clarity around how we go to market around the world and how partners play in those segments. We’ve aligned our business units so that their focus [is] on the key growth segments of the market and our focus [is] on delivering products in that space.

CF: Where do you stand with partner recruitment?

JM: We’re constantly recruiting or bringing in new partners into the business. I wouldn’t say we have a wholesale recruiting effort going on, but we strategically recruit partners. At the same time, we’re very much focused on working with partners that are setting up cloud practices.

CF: Are you tapping into the partner bases of your alliance partners such as Microsoft, now that Cloud Volumes and the NetApp Files file service are available in Azure?

JM: Yes, and that’s a great point. There’s a whole partner network out there that could technically be a NetApp partner. It could be a Microsoft partner or Lenovo partners.

CF: Are you seeing a shift toward managed services versus traditional integration or reselling?

JM: This is where our FlexPod infrastructure platform plays a big role with our channel partners. We have a lot of partners that are building out their managed-service infrastructure and they’re selling application services directly to their customers and those run on top of FlexPod. It is a great solution because it’s easy for our partners to manage and because they’re selling it and installing it for their own customers, and they use it for their own infrastructure. And then the cloud providers are also doing more around creating ways for partners to resell the cloud products. Amazon’s new channel as-a-seller program allows a partner to create effectively a private offer, if you will, a marketplace offer specific to a customer for a set of cloud products and we participate in that program.

CF: How does that work?

JM: A NetApp partner can sell AWS capacity plus Cloud Volumes OnTap as-a-service offering that they sell to a customer just like they sell traditional products. And that private offer has margin built into it. It’s an important recognition from the cloud providers that there are channel plays. And we have that first-party position with Microsoft Azure with Cloud Volumes being a native plant native to the platform. In that ecosystem, our partners get paid. Certainly, the Microsoft team gets paid too, but that allows partners to participate in that recurring revenue model.

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About the Author(s)

Jeffrey Schwartz

Jeffrey Schwartz has covered the IT industry for nearly three decades, most recently as editor-in-chief of Redmond magazine and executive editor of Redmond Channel Partner. Prior to that, he held various editing and writing roles at CommunicationsWeek, InternetWeek and VARBusiness (now CRN) magazines, among other publications.

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