Claims more legacy-based vendors are ditching two-tier model to save margin
Kaminario's international GM and VP Mick Bradley measures how well the Flash storage maker's reputation is spreading by the number of calls he gets from distributors and potential partners wanting the product. So far this year he is doing well, with interest from an Pan-EMEA distributor and a rising number of potential partners in Germany, where the business seems to be building well. The company has just raised an additional $75m for expansion, so we were interested to see where the investment was going.
With a 100% indirect two-tier and single-tier model in international markets, he knows he has to build the brand and in the year or so since he has been there, having worked in other vendors and as a customer previously, he has been busy building the ecosystem. Prior to joining Kaminario, Mick was EMEA Managing Director at Violin Memory where he built the EMEA business and helped establish the flash market. Before that, he was the Senior Director of EMEA Storage Consulting at Hewlett Packard, Chief Operating Officer at CopperEye and Senior Vice President of Global Services at COPAN Systems. He has also held several senior management positions at both EMC Corporation and Electronic Data System, so knows the business from all sides.
It is clear that models are changing under market pressure. He says he has seen some legacy vendors push back against the channel and try to take business away from distribution, but for him, the value of having help to start and build is valuable, so he supports the two-tier model, asking distribution to help educate and map the partners.
He acknowledges that the new breed of distributor aims at adding value rather than pack and ship, and supports this. The knowledge transfer process is important, so funded heads are good – particularly on the early business, which can then be repeated – the secret of a strong business model in this is half new business, half repeat, he says. And this is another reason for using distribution – controlling the level of competition by not having too many in a given territory. With Germany growing well, with the UK well-established and as France grows, he can spend time on some of the other European and Asia/Pac markets.
“But the acid test is the number of phone calls,” he says referring to the partners calling him. In a relatively new market with a few big brands and a lot of start-ups the key is building the reputation. “An interesting challenge” as he says, as is the customer push to do more with less which pushes them in his direction. The drive to SaaS is having a real impact on enterprise systems, with the cost reduction and performance of flash storage at the heart of the sale - “also saving on complexity,” he adds.
But it take selling hence the need for the ecosystem. The resellers, like the distributors, often need dedicated resource, so on the basis that the first sales is always the most expensive the plan is always”land and expand” - using the investment to build the partner base.