Violin Memory continues its recovery following a stock plummet on the back of its 2013 initial public offering (IPO). Stocks remain shaky but the flash storage vendor is in a much better place than it was in December last year, and even as recently as May.
Specifically, the company sunk from $US6.00 per share on November 21 to $US3.11 the following day after going public at $US7.98 in September. It just couldn’t compete. At time of writing, value per share was $US5.05.
The performance led to the firing of former chief executive officer (CEO), Don Basile, in December. An executive makeover led to the appointment of Kevin DeNuccio as Basile’s replacement in early February, alongside the introduction of other executives, including Eric Herzog as business development senior vice-president and chief marketing officer (CMO).
Violin’s new leadership was followed by a new go-to-market: it commenced transitioning from a heavily user-oriented model to a channel-friendly one once DeNuccio took over.
Visiting Australia in September, Herzog told ARN, “We had always done a lot of business through the channel on paper, but it was always fulfilment; we did the bulk of the sales work, and would work through the channel [rather than with it].”
“We are moving from that to a ‘real channel business’ where we are teaching partners to hunt on their own, helping when they need it, introducing a few programs, and having global channel incentives, including everything from market development funds, to public relations and marketing.”
This is being accompanied by training, demonstration, and evaluation of purchase programs through which Violin memory will support ‘try and buy’ instances to aid resellers with sales.
As part of the new strategy, Violin Australia and New Zealand (A/NZ) sales director, Ross Lynch, said, “We have no intention of setting up a services organisation like EMC, NetApp, or any of those companies.”
Herzog added, “Some competitors let partner sell hardware, then try to do all professional services direct. Our goal is to train partners to do the professional services. Partners can’t make enough margins on hardware.”
Herzog also said Violin will not over-distribute, stating that, “It’s one thing for IBM to do that, but we don’t want channel partners to fight for turf.”
While Violin has deal registration in place to protect resellers’ leads, it promises it will be selective in recruiting value-added resellers.
On the distribution level, Lynch said he has no intent to appoint a third distributor in the foreseeable future. Violin has worked with Nextgen Distribution for about two years, branding it a “great partner with a true distribution model” which is able to provide a pathway to larger players including Data#3 and NTT, for example.
It has also used Independent Data Solutions (IDS) for about three years. As Violin’s first local distributor, it serves the vendor as a value-added distributor (VAD), with Lynch stating that its model is inclusive of the roles of a reseller.
Lynch told ARN that Violin has no intent of consolidating to either party.
Currently, 68 per cent of Violin’s revenue comes through the channel, of which only 25 per cent resembles the vendor’s ‘true channel’ approach.
Herzog said the target is to convert its business to between 60 to 65 per cent ‘real channel’, with another 20 per cent fulfilment, and the rest direct.
As expected, Violin claims its direct deals are predominately the result of multi-national customer requests for a one-on-one relationship sans middle-man.