Brocade seeks differentiation with its partnering model

Regan-McGrath-Brocade
Brocade channel chief Regan McGrath

Networking vendor Brocade, a long-time OEM provider, is relatively new to the channel. But the company thinks that its channel model, which differs in some ways from its competition, is just what resellers are looking for today.

Regan McGrath, who became Brocade’s global channel chief in 2012, said last year that 2012 would be the Year of the Channel at Brocade, and believes that the year was a tremendous success.

“Whenever you transition to a channel-led model, which is basically what we did in 2012, you have to get things right,” McGrath said. “We worked hard on field alignment, making sure we had a consistent, predictable model. It couldn’t have gone any better in my mind.” Brocade’s percentage of sales through partners in dollars rose from 2/3 during the year to the high 70s.

“We are right where we want to be there,” he said.

At Brocade’s Think Forward 2013 Partner Summit earlier this month, McGrath gave partners his scorecard for the components of their partner program, and he gave field engagement as Green, the highest score.

“We displayed strong field engagement, technical competence, and an aggressive marketing program, especially given that two years ago, we didn’t have a channel-led model,” McGrath said.

Ease of doing business with Brocade also got a Green from McGrath.

“2012 was key for us here,” he said. “We implemented a brand new PRM system based on salesforce.com, including onboarding, lead management, education, business plans, MDF, and deal registration. We also optimized deal reg and the special pricing process, to optimize turnaround times. And we made it easier to receive and manage our MDF.”

Brocade also built a new configuration tool which can be used by less technical users.

“The old one was cumbersome, more for expert users, while this is for more casual users, and also compares competitor products,” McGrath said. “It has been very well used.”

Brocade also just implemented new sales and marketing tools. They are: the Kit  — a site that houses all product launch material  for onboarding new salespeople in one place; the Hub, a self- service platform to customize co-branded flyers and emails; and the Grid, a third party company that helps partners with multi-touch demand generation activities like mass emailers.

Product innovation also scored a Green, with Brocade’s Fabric connectivity and HyperEdge architecture among its differentiators.

“I don’t think there’s any question we have the kind of innovation you need,” McGrath told partners. “We need you to be able to articulate our position as a company. We need to get your people smart on our value proposition.”

McGrath noted several areas he still considered Yellow, meaning Brocade still has to fix some issues. Technical enablement is one.

“We have made good strides here with online tech training, but we still need to do more things, like provide easier access to demo gear,” McGrath said. “We have more work to do.”

Demand generation awareness, where Brocade is clearly at a disadvantage compared to its much larger competitors, also scored a Yellow.

“It takes hundreds of millions of dollars to create that kind of awareness ourselves,” McGrath told the partners. “This is where we need your help. Do whatever it takes to get the right people in the seats.”

McGrath told eChannelline later he would give Brocade a Red grade in one area.

“I would like to see us work with distribution partners to provide more bundled solutions — like a VSPEX from EMC — but where it’s an open stack,” he said.

McGrath also indicated he thinks Brocade is benefiting from channel dissatisfaction with other networking vendors.

“The market dynamics have changed,” he said. “A year and a half ago, I wasn’t taking advantage of the fact my competitors weren’t doing a great job with their partners. The last eight months, we’ve had a great deal of interest from those. Some of our competitors are overdistributed or their partner programs are dysfunctional. And that’s global, not just the U.S. and Canada.”

McGrath stressed that vendors looking to consolidate, and even vendors pushing partners to sell more across that one vendor’s portfolio, creates opportunities for Brocade.

“The philosophy of vendors — pushing partners to sell more of their portfolio — is 100% against what they should be doing,” McGrath said. “I tell partners, when competitors want you to sell many different components of their stack, it’s nonsense in my mind. The role of the value-added integrator is to provide best-in-class. You can’t do this, and you can’t differentiate, if everyone is selling the same stack. And if you all sell the same stack, that’s why you have 12 partners bidding on the same deal and driving down margins. Our solution is best-in-class agnostic. Where opportunity exists, we are looking to educate partners on selling our different solutions, but our go-to-market is fundamentally different.”

For 2013, McGrath said probably the most exciting new thing for partners is Brocade Network Subscription Plus, which was just rolled out at the Partner Summit.

“Our [original] Brocade Network Subscription offering is the unique ability to charge on a per port business, and take the capital acquisition cost and put it on our balance sheet. It differs from leasing because it will always be an operating expense, and we will take it all back on 60 days notice. The Plus offering is the ability to do this, plus any other lease or service offerings and roll it into a single payment for the customer.

“This is very flexible for Cloud services offerings,” McGrath said. “60-70% of partners I met with in New York have a cloud services offering. They know how to build out architectures. But their model breaks when revenue streams don’t align with capital. This is the perfect platform for Cloud services offerings. And to help partners, we focus on the financing.”

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