Analysts say NetApp is shifting to a two-tier distribution model to more efficiently attack the midrange of the market. According to IDC, the addressable market for storage systems priced between $15,000 and $50,000 is $4.5 billion -- a segment that NetApp has, until now, had a limited ability to reach.
Just two weeks ago, EMC Corp. (NYSE: EMC) expanded its own channel program to provide new financial incentives to resellers. Arrow and Avnet Hall-Mark, incidentally, both are participants in the new EMC Velocity program (see EMC Intros Partner Program).
"Both [EMC and NetApp] have decided to offer product in the midtier of the market, and they both have to increase their distribution in this area," says Harry Blount, an analyst with Lehman Brothers.
But Blount adds that EMC's partnership with Dell Computer Corp. (Nasdaq: DELL) could give many resellers pause about the prospect of competing against it, and he notes that NetApp doesn't have a similar OEM partner in the midrange space (see EMC, Dell Feel the Love).
NetApp charges value-added resellers (VARs) about $2,400 for professional-level technical certification but doesn't charge an annual fee and claims it provides free access for resellers "to our execs as needed to help drive business together," says Iventosch. By contrast, he says, EMC charges roughly four times that for equivalent training, plus an annual fee and fees for access to EMC "executive mentors."
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