Partners Struggling To Close Brocade-Ruckus Sales Amid Restructuring; Channel Chief Pledges To Resolve 'Confusion'
A sales restructuring at Brocade Communications has added confusion and delay to the storage and networking vendor's field engagement model, making it difficult for solution providers to close deals and, in some cases, causing them to move business to rival vendors, partners told CRN.
The chaos in the sales trenches is the result of a reorganization at the company earlier this month that has added multiple layers to the channel engagement model and made it difficult to get in touch with Brocade and Ruckus account managers, engineers and sales reps regarding special pricing or solution redesigns, solution providers said. That has caused delays from a few days to upwards of a week in getting critical answers required to close sales, according to partners.
Previously, the company's sales organization supported the full Brocade-Ruckus product line. Now each of the company's three businesses – Data Center, SAN and Network Edge -- has its own dedicated sales unit, meaning partners trying to sell across the portfolio now have to work with multiple channel account managers.
At the same time, the company has also reworked its geographic sales regions because Ruckus and Brocade had been organized around different segmentations. Ruckus, for example, had been organized into four geographic regions in the Americas. Now the combined company is split into 11 Americas regions.
The reorganization aims to lay the groundwork for the sale later this year of Brocade to Broadcom and then the subsequent sale of the Brocade networking business and its Ruckus wireless business (which it acquired a year ago) to Extreme Networks and Arris International, respectively, said Brocade channel chief Sandra Glaser Cheek.
Cheek conceded that the reorganization has "caused disruption" and "confusion" for partners, but pledged that the company is focused on resolving the sales engagement issues as "quickly as possible through proactive communications and personal outreach to partners."
Brocade is working internally to understand which account managers are aligned with which partners, and which partners are selling across the portfolio and therefore need to be approached jointly by the Brocade and Ruckus teams, said Cheek.
"We feel like we're getting into the homestretch right now of a very disruptive year, and we're aligning ourselves for success," she said.
For partners, the resolution to the chaos in the field can't come soon enough.
"Trying to get the attention and focus of account managers or their sales team is very difficult, and it has certainly slowed the sales process down," said a high-level executive at one of Brocade's top partners, which is in the midst of shifting a $1 million deal to Cisco due to the current status of Brocade. "Their account reps and people are struggling to figure out what they're supposed to do and how they're supposed to engage. We're having difficulties getting things through."
The high-level solution provider executive said his company had been forced to make some hard decisions regarding its commitment to Brocade now that the data center networking business is being sold to Extreme and the Ruckus wireless business to Arris. The impending sale of those product lines to different companies destroys the value that attracted some customers to the combined Brocade-Ruckus portfolio, he said.
"Those customers that were looking at the whole stack are now taking a step back and saying, 'We're not doing any of it because, before, we saw this being a complete solution. Now what you're telling me is I have to buy this from different people. Not interested,'" he said.
The executive said his company has decided not to sell the data center networking products now that they are being sold to Extreme. "Before, we were bringing the [Brocade] VDX [switch] line to specific customers," he said. "Now, we're focusing on Nexus [switches] from Cisco and getting the price down to a level where the customer can afford it."
A C-level executive from another solution provider that partners with Ruckus and Brocade said his company has lost "at least a few" deals as a result of the inability to get answers from field reps on complex deals.
In one recent example, a former Ruckus customer decided to move to Aerohive Networks for its switching and access points.
"It was difficult and time-consuming to get the [deal process] flowing, so they went with somebody else this time," said the C-level executive, who asked not to be identified. "[Customers are] getting called by a lot of different manufacturers."
Brocade needs to dramatically simplify account engagement, management and deal flow to fix the problem, the C-level executive said.
"The restructuring has resulted in too many field reps with no clear decision maker. Too many people don't know who's in charge of what because the accounts are in total reorganization," he said. "You can have an account with three account managers and two channel managers and still not know who you should be talking to. It does usually get sorted out, but it's a highly manual process."
It's not just customers that are getting calls from Brocade's rivals. The company's channel partners said they are also aggressively courted by competing vendors, including Cisco, Hewlett Packard Enterprise subsidiary Aruba Networks, and Aerohive Networks. The Brocade transition has "peeled open the market," with both partners and customers looking at alternatives, the C-level solution provider executive said.
In December, for example, Aerohive executives told CRN that it was attracting new or deeper relationships with dozens of Brocade-Ruckus partners in both America and abroad following news of Broadcom's plans to acquire Brocade.
Competitors were swooping in to steal partners even before the May sales restructuring, seeing opportunity because of the many twists and turns the Brocade story has taken over the last year.
In May 2016, Brocade completed its acquisition of Ruckus Wireless for $1.2 billion, a move solution providers said would create a more formidable foe against competitors like Cisco.
However, before partners could get their feet wet selling Brocade-Ruckus, Broadcom announced just six months later in November that it was acquiring Brocade in a $5.9 billion blockbuster deal expected to close later this year. To add to the confusion, Broadcom said it was looking to unload the Brocade and Ruckus networking business, which left some partners bewildered and confused.
Then, in February, Arris International agreed to acquire Brocade's network-edge portfolio for $800 million, which includes the Ruckus Wireless and ICX Switch product families. Just one month later, Extreme Networks stepped in to acquire Brocade's data center networking business for $55 million.
Both the Extreme and Arris acquisitions are set to take place this year a few months after Broadcom closes its deal to acquire Brocade.
Brocade was feeling the effects of the acquisitions in the sales trenches even before the May restructuring.
For its first fiscal quarter of 2017, which ended January 28, Brocade acknowledged that customer uncertainty surrounding the impending acquisition by Broadcom and the expected sale of Broadcom's IP networking business accounted for lower IP Networking revenue during the quarter, which in turn contributed to a sequential decline in earnings per share.
As part of the company's plan to establish clear post-acquisition channel engagement models, Brocade is holding a series of webcasts to answer partners' questions about Arris and the opportunity that lies ahead said Cheek. Brocade is planning similar events for the data center and SAN products Extreme is buying, she added.
At the same time, the company is moving quickly to clear up all account engagement issues for partners, said Cheek. "This is just a byproduct of what happens when you're acquired and the alignments that happen, but our intent here is to do this as quickly as possible," she said. "Almost like 'rip the Band-Aid off' so we can be ahead of the curve by the time the acquisitions close."
Cheek urged partners to work with the company proactively to resolve the sales engagement issues in the field and remain loyal to the company amid the many changes.
"We recognize that this has been a pretty tumultuous year and disruptive, to say the least," she said. "We appreciate not only the support and loyalty, but this kind of feedback is terrific, even if it is hard to hear … The last thing we need to do is lose partners. We've really worked hard this year to retain our partners, and I think we've done a fairly good job. We do feel really bullish about the future, and we hope partners stay with us."