The debate over cost vs. price is an ongoing one in the channel in Canada. This debate is something that Hitachi Data Systems Canada (HDS) and its channel chief Peter Kriparos knows all too well.
The subsidiary is readying its channel base for Hitachi Unified Storage or HUS. HUS is the biggest announcement coming from HDS in quite a while. To make sure its network of solution providers can overcome the sometimes debilitating debate of cost vs. price the company has created a storage economics whitepaper to make it easier for the channel to answer these customer concerns. For Kriparos, his goal is to continue to leverage the strength and legacy of HDS in the enterprise with its HUS’s new virtualization capabilities. He says that channel partners continue to play an important role in scaling HDS Canada’s business not just in the enterprise but also in the mid-market. Kriparos sat down with CDN at the company’s Canadian Channel Summit in Niagara Falls to discuss storage economics amongst other topics. The following is an edited transcript.
CDN Now: What is your channel philosophy?
Peter Kriparos: For me you can have the best programs from front- and back-end and the best marketing initiatives but at the basic level the fundamentals have to be there. The channel needs to be predictable for both parties and there has to be trust and integrity. Those are the basics that we all live by. What is key to me is building a channel on those basic fundamentals. That is our foundation to the channel program.
CDN Now: Why go to market with a small network of channel partners in Canada?
P.K.: It’s under 100 and we wanted to create an intimate model where we can have depth with the partners to enable them with sales and technical services. The fact is our solutions require high touch. They are not fall off the shelf solutions or go pick five drives and integrate it. It requires a lot of expertise and we felt that to focus on a small partner base would give us the best opportunity to scale our business instead of spreading ourselves thin and creating channel conflict. We can’t be relevant to a 1,000 but we can be to less than a 100.
CDN Now: What is your channel plan for the mid-market?
P.K.: This year more than any other are entire focus is on the white space; the acquisition of accounts. How are we going to get there? We will focus on a few partners who have a large available market. Then we want to create disruptive behavour with front-end and back-end rebates along with spiff programs through distributors. Our key new products with HDS Unified Storage gives channel partners an advantage that supports block, file and content data in a unified platform. Application integration is also a key element to that and the HDS solutions are fully integrated and tested for commercial application such as SAP, Oracle, VMware and Microsoft. In addition to that we plan to expand our partnerships with companies such as Cisco so that we can go to market with a reference architecture using UCS and our storage solutions.
CDN Now: Joint ventures with best of breed vendors; do you feel that Hitachi gets shut out of those?
P.K.: I do not believe that. We are not shut out and I do believe we are the best kept secret in the marketplace. We have lacked some in the mid-market on the brand awareness side. However, in the enterprise we are well recognized and respected with a technology-stack that customers can trust and delivers 100 per cent uptime.
CDN Now: You have developed a storage economics approach; why did you want to do that?
P.K.: The storage economics approach enhances the sales cycle for our sales organization and channel partners. We train our partners on this methodology and it helps our partners by leveraging the advantage of selling the cost of storage and the value of that over just the front end price of storage. Storage economics is analysis of 34 costs in the data centre. We can help our customers in reducing those costs and show them a huge advantage leveraging our solutions and technology.
CDN Now: Can you explain the special pricing you have for Unified Storage?
P.K.: All programs are stackable and we launched a number of programs to enable partners to be competitive in an acquisition account. We want them to be profitable by enhancing the margins. The programs are opportunity registration; competitive take-out; front-end rebates; and partners can ask for a price to win and we shall leverage HDS Canada sales leadership all the way up to Barry Morrison (GM). We can make decisions on the spot to win the business. From time-to-time when we get aggressive it will go up the chain and if it’s an acquisition account we will play to win. That said going back to storage economic when we get into the pricing analysis cost is not price and we go through a cost analysis with the customer because the initial price of the storage is not the only cost. Managing the product over five years, for example, can help you save money over the life of that solution.
CDN Now: What do you do to help the solution providers increase their margins on a daily basis?
P.K.: Education is the key factor and the sales organization must be more consultative to sell our technology. This means education for the pre-sales organization as well as the services organization to go and do installations and delivery. We also are mentoring our partners in understanding the competitive environments out there to make sure we are comparing apples-to-apples. This will help them position the technology to customers and emphasis the overall value of the solutions.