NetApp on Tuesday unveiled significant changes to its channel partner program aimed at better rewarding partners who focus on digital transformation and helping their clients more quickly move to the cloud.
The changes include making partner benefits available to new types of channel partners who were previously not addressed by the program as well as more traditional partners, and streamlining incentives to focus on key strategic initiatives, said Chris Lamborn, head of global partner go-to-market and programs for the Sunnyvale, Calif.-based storage vendor.
It also involves shifting focus from product certifications to solution specializations, Lamborn told CRN.
The full program is slated to be in force starting in May of 2022, but partners can start now to get ready, he said.
“NetApp‘s been transitioning our partner program very much towards a competency-based model,” he said. “Essentially, what we’re announcing now is that in 12 month’s time we will be making the hard cut-over from a traditional structure where we differentiate our partner tiering based on product certifications and resell revenue to a model that both reduces the number of tiers from five to three and then measures our partners from their overall contribution.”
By “overall contribution,” Lamborn means recognizing two different types of partner revenue, including sell-to revenue as a partner brings out its own managed services, and influencer revenue where partners drive their own services to influence the outcome.
“So [we‘re] taking into account all types of business models that a partner may have, and at the same time moving from product certifications to solutions specializations,” he said. ”So think A.I. Think cloud. Think hosted services, data protection, and data security. And so we will be differentiating our partner tiering and what they earn based on their competency in the market and based on their overall contribution to NetApp.”
NetApp is focused on partner-led services, and wants to recognize partners for their role in the lifecycle of a service as opposed to just the implementation and deployment, Lamborn said.
In its relaunched program, NetApp will consider a couple factors in determining partner level, Lamborn said. The first is financial contribution and whether there will be a minimum level across each of the new tiers. The second is acquiring the required specializations, with two required for the middle tier and three for the top tier.
“It‘s a very clear and structured approach,“ he said. ”So for our partners, it’s highly predictable in how they can get there and in ultimately what they’ll earn.”
In addition to the financial benefits of the new program, NetApp channel partners will be able to become eligible for several new specializations and certifications, Lamborn said.
The first of those new partner specializations is focused on the FlexPod converged infrastructure platform jointly developed by NetApp and Cisco Systems, and will include a new rebate for partners who get the specialization, Lamborn said.
“We are re-introducing a FlexPod rebate for our FlexPod specialist partners where they will gain a rebate from every new FlexPod transaction that they drive,” he said.
NetApp will also introduce new solution specializations for Cloud Preferred, SAP, artificial intelligence and machine learning, data protection, data security, hosting service provider, infrastructure, and Spot by NetApp, Lamborn said. Spot, which NetApp acquired last June, lets partners optimize not only storage resources on the cloud but also compute resources.
NetApp is also introducing new services certified specializations around integration services, lifecycle services, and NetApp Keystone subscription services, he said.
The new specializations are based on a combination of NetApp’s core go-to-market priorities and where customer needs are changing partner engagements, Lamborn said.
“And so it aligns not just to where NetApp‘s taking the business, but it aligns to where our partners are seeing the business opportunities as well,” he said.
Many partners are less focused on the value of the rebate or their payment and more focused on how NetApp helps them engage with their field or their customers, Lamborn said. For instance, he said, NetApp has over 40,000 customers a year coming to NetApp.com to identify the right partner to help solve their business needs.
“And so, along with this transition, we‘re changing our NetApp partner finder, or Partner Connect as we call it, to start to differentiate partners with specializations and give them the ability with enhanced digital presence to upload customer success stories, upload their wins, so that customers coming to NetApp can really see the differentiation that they offer,” he said.
Eligibility for certain specifications will be based in part on partners ability work with certain strategic vendor partners, Lamborn said.
“We don‘t define whether it’s a Rubrik, a Commvault, or a Veeam, but we do determine that you need to have a minimum relationship with one of them [for the data protection specialization],” he said. ”And in a similar way with our cloud preferred specialization, it’s an AWS, a Google, a Microsoft, [or] an IBM cloud relationship. And with A.I., it’s Nvidia or it’s Intel.”
This is more than checking the boxes, Lamborn said.
“This is also around being able to deliver a customer win,” he said. ”And let me be clear: It doesn‘t have to be a public customer win. It can be a private customer win that we don’t disclose. That’s up to the partner because we know there are some challenges around public wins. But it’s around NetApp really being able to stand up in front of our customers to promote a partner because they’ve got a data protection or an A.I. specialization and know that they’ve delivered the solutions and the competencies to customers that can reinforce their capabilities.”
NetApp does not expect to lose any channel partners because of the changes in how it tiers partners, Lamborn said.
“We have several partners who do a phenomenal job with NetApp about building managed services, or service provider partners who buy NetApp to build a service to power their solutions with NetApp, that have never been recognized for their contributions,” he said. ”So I do see, as we model it, the advancement of some of those partners whose primary business model may not be resale. [And] you may see some transition of some partners that haven‘t moved into the cloud, and fortunately that’s very minimal. They will need to come up to spec to stay in the tiering that they’re in now.”
This also opens up opportunities for new partners to start to get to the top tier, Lamborn said.
“The new solution specializations, the fact that the services specialization now allow you as a cloud partner and a cloud-only partner to get the qualifications required, to get your integration services or life-cycle services, it‘s really reinforcing the message that you have taken to market around the transition to this hybrid cloud and software-driven organization,” he said.
NetApp has also balanced its financial incentives to reward the right behaviors, said Jim Elder, the channel chief in NetApp’s Americas partner organization.
“Driving net-new customers is clearly going to be an important motion for us,” Elder said. ”And a very large percentage of our net-new customers today are brought into our current gold-tier of partners. And so we‘ve made sure that, through these changes, that we’re going to continue to support that motion so that not all of our financial benefits are going to just our top-tier partners.”
NetApp has a large cloud-focused portfolio of roughly 20 products, with targeted use cases that are quite different from those of traditional products, said John Woodall, vice president of engineering west at General Datatech, a Dallas-based solution provider and long-time NetApp channel partner.
Partners, as a result, might end up with two or three different partner profiles that, depending on the customer and whether the deployment is on-premises or in the cloud, may require a different portfolio focus, Woodall told CRN.
“So partners will need more competencies than what they get by passing a test,” he said. “Partners who have been building advanced services capabilities or specific use cases like DevOps or machine learning can be recognized for their differences under NetApp’s new program.
It is also important that NetApp is giving its channel partners a full year to prepare for the new program, Woodall said.
“This gives you time to understand where we are, where you are strong, what areas you already have capabilities in, and areas where you need to invest,” he said. “So you have a year to choose where you want to invest.”
That is starting to become a common approach to channel programs in companies like Cisco, Woodall said.
“It’s a program that makes sense,” he said. “NetApp is saying, ‘Here’s what we’re doing.’ This allows partners to understand what they need. And if they execute it right, it should be easier to do business with NetApp. This also pushes partners down the right path.”
What NetApp is doing is similar to Amazon’s approach to partners, said Tom Holt, vice president of sales at InterVision Systems, a Santa Clara, Calif.-based solution provider and NetApp channel partner.
“Amazon has competencies, and you are recruited as a partner for these competencies,” Holt told CRN. “You don’t need to have every one, but you need the ones based on your strengths. That isn’t a reward system but a competencies system.”
NetApp’s portfolio is definitely driving partners to focus on their competencies, Holt said. However, it may not drive a lot of change for partners who have already invested in the kind of competencies clients are already requiring from partners, he said.
“How attached you are to your clients is based on what you as a partner do with the NetApp portfolio,” he said. “We are client-first in terms of solution. We already have a lot of the key specializations including cloud, Spot, Kubernetes, and storage solutions.”
While NetApp is introducing the changes to its partner program, the final transition is not slated to be complete until May of 2022 in order to give partners time to prepare, Lamborn said. However, he said, partners can start working on getting their new specializations and benefiting from them immediately.
As part of the transition, NetApp is giving partners access to clear dashboards that show what they need to do with each of the specializations that would align to their business and what it would take to accelerate their journey, Lamborn said.
“[We] give partners the ability to truly differentiate themselves as far as how they go to market, and ultimately, as you‘ll see when we launch some of the new tier incentives in Q2, really give those top-tier partners the ability to get predictable earnings. … They understand that they can get to that top tier of NetApp’s program even if they’re coming in purely as a cloud partner, which has never been available to them until now,” he said.