NetApp quarterly profit rises, outlook disappoints

NetApp has hit a rough spot. They are increasing the size of their sales force but sales are not growing that fast yet and they risk alienating their reseller channel:

“They feel like if they can put more people on the street, they can gain a lot of market share,” said Pacific Growth Equities analyst Kaushik Roy. “The problem is, they’re not competing with the little Chinese vendors from Taiwan. They’re competing with the big guys… To gain market share from EMC (EMC.N: Quote, Profile, Research, Stock Buzz) and HP (HPQ.N: Quote, Profile, Research, Stock Buzz), it’s a struggle.”

Perhaps this explains why their reseller channel management is in disarray?

“In a surprise move, popular channel sales leader Leonard Iventosch suddenly left NetApp, where he’d worked for more than eight years. Company officials say it’s business as usual for partners while they search for a replacement.”

It may be getting hard to provide NetApp resellers incentives while they are simultaneously growing their internal sales force to put ‘feet on the street’.

For customers buying new equipment from NetApp this should mean that there is opportunities for negotiation between the competing sales channels. Why not get competing sales quotes from the NetApp, IBM and your reseller channel, which now includes CDW. If you are buying new equipment why not see how well competition works?

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