Hitachi Data Systems prepares to expand its channel

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It wants to move from the direct model

At an event here in Munich today, Johannes Kunz, VP Channels, EMEA of Hitachi Data Systems claimed that the company is set to grow its channel significantly over the next two years, and put more of its business through the indirect route to market.

Kunz said that HDS outperformed because of its VAD business, which grew about 50 percent. “If you compare HDS with competitors our growth is fantastic, together with our partners,” he said. HDS launched its HUS products today and now has a complete stretch of all markets, Kunz claimed.

He said: “We’ve been successful because at HDS we have a clear vision of how we want to grow with the channel. Nearly 50 percent of our net product revenue in the last two years went through our partners, but by FY15 we want to have 70 percent business from them. We’ve grown partners by 57 percent in this fiscal year.”

Why? Kunza said HDS needed to have the right partners in place to help it with more complicated business. HDS divides its partner business into three tiers. “If we look at our partner landscape our top 20 partners deal with the enterprise and specialised services as well as dedicated programmes. Fifty per cent of our partner business is software and services now.

The next 40 partners will look out for new market opportunities into verticals, or new horizontal markets such as entertainment, oil and gas and we need partners to sell our solutions into those markets.” The last, are its value added distributors “who have helped us to accelerate our market. In Europe there are 500 partners through distribution”.

HDS classifies its customers according to the share its systems have. HDS has over a 40 percent share of banking customers. It has some enterprise clients it’s serving direct but the rest of that segment it’s covering with partners, mainly its top 20 partners.

Commercial partners, he said, comprise 100 percent channel based partners but this year HDS will add a lot of sales people to help partners close sales. The volume space, that is to say the SMB market, HDS won’t touch at all. The commercial market is a $4 billion market in EMEA and so the HUS products are mainly designed for that market, he continued. The commercial market is where a lot of growth will come in the next two years.

Zycko, a Value Added Distributor, is a long term partner, he said and it’s a good example of the kind of partner HDS wants.

Darren Sheppard, manager of the vendor solutions division at the company at Zycko, said that HDS is its number one product on the storage side, and it doesn’t sell competitors’ products.

Solutions is the only way to sell these days, he said.

Zycko has worked with HDS for eight years, and was looking for a storage vendor it could work with. Zycko needed a product and a company it could work with and wanted support, which it got.

Sheppard said Zycko’s partners could be two people or 200 people but the relationships partners had with others was important. He said HDS has a clear channel policy and has no ambiguity about it. The marketing has always been strong but now has to step up a gear. Zycko and HDS need to provide more marketing, and incentives, he said.

(We talked to HDS’ Kunz and Zycko’s Sheppard after the launch. More coverage to come.)