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Data center server and storage company Rackable Systems is looking to
double the ranks of its channel partners and has built the
infrastructure and products designed just for its end market.
It’s all part of Rackable’s plan to address the SMB market, an area
that is relatively new to a company such as Rackable, whose customers
have included MSN,, Facebook and YouTube.

Rackable Systems’ new channel program, the Eco-Partner Program, will
offer qualified partners deal registration, qualified lead
distribution, the use of the Rackable Configurator that has been used
by the company’s direct sales force, joint sales engagement and
business development, and joint go-to-market campaigns and events.
Partners will also get a partner portal.
Rackable currently has about 20 channel partners and is looking to add
10 to 15 more. To qualify, partners must do $500,000 in sales and hold
certain certifications. Rackable plans to vet partners who apply at the
portal, and partners who do not qualify can still serve as authorized
partners, according to George Skaff, vice president of marketing at
Rackable. And Rackable is looking to make it easier for partners to do
business with it.

"Our existing channel partners have come back to us asking for products to serve the SMB market," Skaff says.

To answer that call, Rackable has created a standard set of SKUs for
partners to sell, plus they can still configure their own by using the
company’s configurator.  It’s the same tool used by Rackable’s
direct sales force and now patched into the company’s partner portal.

Overall, channel partners are expected to do deals that are smaller
than the ones the direct sales force does – in the $5 million to $10
million range. However, "If a channel partner brings a deal to us, it
will always be their account," says Skaff.  "We are not going to
have a channel partner bring a deal to us and then take it direct."

Rackable’s formalization of its channel partner program comes a few
weeks after the company cut its revenue outlook and announced plans to
lay off 15 percent of its work force.

Rackable cut its revenue forecast for 2008 to between $245 million and
$250 million. In October the company’s 2008 revenue forecast called for
revenues of between $275 million and $300 million.

Rackable said that the layoffs would save $4 million to $5 million annually.