Neville James (NetApp)
Neville James has met more new partners in the last nine months alone than in his entire seven years at the helm of NetApp Australia and New Zealand’s (A/NZ) channel ecosystem.
Like the rest of the IT industry, the 30-year-old storage vendor has found itself swept up by the en-masse migration to hyperscaler-led public cloud and has been forced to re-pivot itself away from its hardware, capital-intensive legacy.
Now, in what James calls both the biggest challenge and opportunity for NetApp, the vendor is preparing for big changes within its partner ecosystem as customers increasingly demand data-management solutions with one of the big three clouds hyperscalers: Amazon Web Services (AWS), Microsoft Azure and Google Cloud.
“I’ve been a channel director for seven years now and I’m coming across logos that I had never even heard of six-to-nine months ago,” James told ARN. “That’s probably because they didn’t see NetApp as really relevant to them.
“But, this whole migration to cloud has become relevant to both of us. Not a week has gone by that we have not met a potential new partner.
"The fact our software has been chosen by AWS, Google Cloud and Azure as their standard file-based data management platform has really transformed the perception of NetApp away [from] being a storage array vendor to a data management company.
“Traditionally we had a very stable, narrow partner ecosystem. We’re not a broad church like Microsoft. So, this is a very interesting phase for us; it’s an acquisition and expansion phase.”
Currently, NetApp has around 140 partners in A/NZ and, like its competitors EMC, IBM and HP, has had a relatively consistent and “sticky” pipeline of business and partners in the region.
However, according to James, the shift to hyperscale cloud has been “transformative” for its partner ecosystem, introducing NetApp to businesses who may have only been established in the last five years, such as SXIQ, CyberCX and Versent.
As a result, James’s channel team is now split in two: half are dedicated to selling NetApp’s traditional hardware solutions, alongside related services, while the other is dedicated to finding new partners.
In James’ words, the latter team is tasked with finding partners, “having a conversation with them and convincing them that signing up with us is a good thing for their clients”.
“We’ve gone from having relatively monolithic conversations with partners over the last 10 years, to having much more financially driven conversations,” he explains. “How do we fit into the economic model of the modern world?
“It’s not so much that the technology has changed, it’s how you use it. It’s a different business model. I would argue that now every customer in Australia has become a potential customer for Australia, whereas historically, the number of customers we would pinch from EMC or they from us was limited.”
“Now because every customer has a cloud or hybrid cloud strategy, it really has put these customers back into play for us,” he added. “It also opens us up to customers who have a very services-driven business model, rather than hardware or software licence resale.”
James’ channel this split also marks the first time he has had an acquisition team to work with during his seven years at NetApp.
However, despite this focus on acquisition, James expects NetApp A/NZ’s partner ecosystem to go up only to 150 or 160 in 24 months.
Instead, though, James expects “names will change” within the partner ecosystem Previously, he explained, the storage market would largely be a capital-driven game for partners. However, the key now is talent.
“Cloud has made it easier to get started, whereas before, anything as a service was very capital-intensive,” James said. “To sell to customers as they wanted to buy. The barriers to entry are not that high. It’s more about the people and expertise you can get. If you can find those people, you can be relevant and get going pretty quick.”
The beauty of cloud is that it’s relevant to anything.
NetApp launched an updated version of its Unified Partner Program in May last year, which aimed to help partners fully capitalise on the market changes resulting from accelerated digital transformation to the cloud.
The program included additions of specialist partners, solutions and Services Certified specialisations, as well as financial incentives.
Most importantly, according to James, the program now provides some “eye wateringly good” financial rewards for partners, especially if used in conjunction with one of the hyperscalers. Indeed, he said, using AWS alongside NetApp can see partners generating 20-to-25 per cent rebates.
“Our rebate percentages start at 10 and cascade up to 15 per cent,” James explained. “There are 15 per cent rebates depending on whether customer uses one, two or three of our different technologies. All our rebates are very consumption-oriented rather than time-based.”
“There’s a traditional view that you don’t make much from product-in-cloud. The partners do rely on the services revenue and the margins they can get from that,” he continued.
“At the moment, because the cloud providers are keen to really build the cloud adoption as fast as they can, they actually think you can have your cake and eat it too. I think you can have a really robust and profitable services practice.”
However, to achieve a profitable practice requires a degree of specialisation. While storage-as-a-service or cloud management technologies are in demand, partners need to provide the “next level up” for whatever the customer’s outcome is, James said.
“The beauty of cloud is that it’s relevant to anything. The downside is though, if you don’t specialise in one or two of them, you’re not going to be relevant to anybody,” he added. “You need to pick your area of expertise. It doesn’t matter which, as long as your commercial model is sound.”
Locally, NetApp itself has ramped up its level of specialisation – and tripled its Australian workforce – through the acquisition of the Canberra-based open source-as-a-service platform Instaclustr.
“Instaclustr brings some pretty sophisticated technology to our partners and customers,” James said. “This is just the latest in what has been a pretty consistent journey for NetApp in the last few years, including buying software-as-a-service products, specialist, niche companies that complement around the outside of our core offering.”
“The market is there,” he added. “This is probably a once in 30 years opportunity. There is no doubt that there is a cloud migration market out there. There’s nothing more certain.”
