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Indirect Hits

In some businesses, the word middleman conjures visions of a profit-siphoning extra wheel, to be disengaged wherever possible.

Not true in storage networking, where the middleman is not only a help but a necessity. Storage companies are increasingly relying on the indirect sales channel, comprising distributors, value-added resellers (VARs), integrators, and other third parties.

"Indirect is where it's all moving, QLogic Corp. (Nasdaq: QLGC) marketing VP Frank Berry says. “The commoditization of SAN technology lowers the cost, and the channel is a way to get products out there."

Channel partners, particularly those that specialize in specific vertical markets, not only have access to more customers than most vendors do, they also do a lot of the handholding associated with putting storage networks in place. "SANs are a complex thing. Customers need help deploying them,” says Bob Wilson, VP of worldwide channel sales at Xiotech Corp.

Wilson says Xiotech's indirect sales increased from 10 percent of its total revenue last year to 42 percent this year. Wilson agrees that indirect sales are crucial for a storage vendor’s long-term growth.

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