Scale Computing Launches First Multi-Tier Channel Program In Massive Midmarket Hyper-convergence Blitz

Fast-growing hyper-converged virtualization appliance maker Scale Computing is rolling out its first multi-tier channel program as part of a massive mid-market offensive.

Scale Computing CEO Jeff Ready said the channel expansion will boost the company's fervent following among small- and mid-size business customers anxious to avoid what he calls exorbitant VMware licensing fees.

Scale shipped 1,600 appliances in 2016, saving customers an estimated $32 million in VMware licensing costs, he said. "VMware just doesn't understand the mid-market segment," he said. "There is a disconnect."

[Scale Computing CEO: 'VMware Alternative' Saves $32 Million In Licensing Fees]

Scale's channel partners are saving customers money and finding opportunities to add services into their Scale-based hyper-converged solutions, Ready said. "The partners actually make more money because they are providing services in addition to straight-up infrastructure, and we steal a customer from VMware," he said. "Ultimately that is what we have been doing for the last four and a half years with our product - taking customers from VMware."

CRN reached out to VMware for comment and will update if we hear back.

Now Scale is aiming to increase its partner base from 200 partners to 1,000 partners over the course of this year, said Kevin Greenwood, senior director of global channels at the Indianapolis-based company.

"The product is there," said Greenwood, referring to the rave reviews the company's HC3 appliance is getting from midmarket customers who say they are seeing on average 50 percent to 68 percent savings by switching to Scale and cutting or eliminating VMware licensing costs. "We are now ready to take our message to the market. We're ready to bring on a significant number of partners, invest in them, and be successful with them."

The new program, which includes a Silver and Gold level as well as an invitation-only Platinum level, comes after the 10-year-old company added a dozen new features to its mainstay product in 2016 and doubled its sales over the last year through a channel force made up primarily of large national solution providers.

The Scale Computing Channel program provides the highest-level status based on certifications, dealer registration, field sales engagement and cluster sales

The minimum requirement for a Gold partner is two certified presales engineers, two certified sales reps, two deal registrations a quarter and four cluster sales.

A cluster, in Scale Computing's terms, can be as small as a single node, although a minimum of three nodes is typically sold to provide high availability, Greenwood said. "A three-node cluster starts at under $25,000 MSRP," he said. "We don't want to tie partner tiers to dollars. We want to tie the tiers to bringing in customers and engaging with new prospects."

The minimum requirements for a Silver partner is one presales engineer, one sales rep and one cluster sale.

Greenwood declined to provide details about the invitation-only Platinum level, other than to say that the handful of partners invited to join at that level have a "very consistent cadence of sales with us."

Separately, Scale Computing has a popular referral program that provides significant sales commissions for partners passing on names of customers that buy a Scale Computing solution. The commission is based on a net percentage of an opportunity for one-time transactions, Greenwood said.

The ability to offer hyper-converged infrastructure without requiring separate licensing for VMware's hypervisor and software has made Scale Computing a good alternative for small and midsize businesses, said Michael Sheward, CTO at Solutions4ebiz, a Pendleton, Ind.-based solution provider.

"VMware has a fee for the hardware, a fee for the application. It all adds up," said Sheward. "With Scale Computing, when you add another node to a cluster, you easily know the cost. And its KVM-based solution is solid."

Sheward, which has been working with Scale Computing for about two years, told CRN that only five years ago he would never have believed his firm could provide both high-availability and disaster recovery solutions to clients with a single platform. "Now with Scale Computing, I can offer both," he said. "We still have VMware users, but they are migrating their solutions to Scale Computing."

Scale Computing last year focused on improving its relationship with major large national solution providers such as Lincolnshire, Ill.-based CDW; Merrimack, N.H.-based Connection; El Segundo, Calif.-based PCM; Auburn, Wash.-based Zones; Somerset, N.J.-based SHI; and Chicago-based Soft Choice, Greenwood said.

Scale Computing's new channel program is focused on expanding business with a wider range of regional and local channel partners than it dealt with in the past, and on having those partners handle more of the services side of the business, Greenwood said.

Scale Computing currently works with two primary distributors in the U.S.: Annapolis Junction, Md.-based Promark and Fremont, Calif.-based Synnex, and now works with most of its channel partners through those companies.

Scale Computing late last year launched the ScaleCare Remote Recovery Service, a disaster recovery-as-a-service offering, Greenwood said. The service was not primarily aimed at customers, but instead was an opportunity to build out a service that channel partners could take to customers, he said.

"We proved the program worked in the market with our customers," he said. "We're not a service provider with our own cloud. But we built the solution to let partners invest in the market to offer disaster recovery-as-a-service, with scale-over and scale-back capabilities into the solution."

The service is now available to partners who can offer it with their own data centers or co-location facilities, and is expected to be available in the near future for use with public clouds like Amazon Web Services or Microsoft Azure, he said.

Sheward at Solutions4ebiz has found the Scale Computing offering to be ideal for smaller companies that can typically replace 10 to 30 legacy servers with a cluster of the vendor's hyper-converged infrastructure technology. He said a starting three-node cluster easily serves an IT department with one to four users.

Solutions4ebiz, which depends on Scale Computing as its exclusive hyper-converged infrastructure provider, has already turned its solution into a service, Sheward said.

Some of its customers run their entire Scale Computing clusters in Solutions4ebiz's racks, while others run separate clusters at Solutions4ebiz for disaster recovery purposes, he said.

"When people bring the clusters or the disaster recovery piece to us, they want to put them in a managed facility to get better protection against power [outages] or Internet outages," he said. "And in a failure, many clients want to depend on professional facilities to quickly get them up and running."

Scale Computing is looking for partners that see the opportunity to grab customers away from VMware with what Scale calls its "anti-VMware" alternative, Greenwood said.

"This is a huge effort," said Greenwood of the midmarket channel offensive. "If you think you knew who Scale Computing was, you need to take a fresh look. What we have today is, we believe, by far the best full hyper-converged infrastructure solution for midmarket and SMB customers. Nobody offers those customers more features and more function at the right price at the right solution level for them."

Steven Burke contributed to this story.