2008 Channel Champions3:00 PM EST Fri. Apr. 25, 2008
Of the 26 Channel Champion product categories, HP, Palo Alto, Calif., won six overall awards and tied with IBM Corp., Armonk, N.Y., for a seventh. By contrast, Cisco Systems Inc., San Jose, Calif., the vendor with the next most overall awards, won in four categories. IBM won three and tied with HP in a fourth.
HP's showing reflects the breadth of the vendor's product offerings, including notebooks, storage, networking hardware, and software and printers. But it also reflects HP's full-court channel press, led by HP CEO Mark Hurd, to do whatever it takes to enlist channel help to improve HP's U.S. sales coverage.
"We have to stay in constant communication and contact with partners out there to how their models are changing given the market dynamics," said Tom LaRocca, HP's vice president, partner development and programs. "The Channel Champs awards were a huge endorsement of where we're going—not only from a product perspective, but also from a program and technical support perspective. We're not sitting on our laurels. We like the direction that we're going and we're going to continue to get better every quarter."
HP's success serves as a model for those vendors plotting future growth strategies. Technology is only one leg of a stool whose foundation depends on well-thought-out channel strategies and constant communication with solution providers to ensure that product development and channel programs evolve to meet customer needs.
HP surpassed the $100 billion mark in annual sales for the first time in its fiscal 2007, racking up $104.3 billion in revenue for the year ended Oct. 31.
But HP's Channel Champs showing is more than just a reflection of size. Hurd knows that HP hasn't gotten where it is or can't get where it wants to be without solution providers. Hurd told CRN earlier this year that HP has less than 60 percent sales coverage in the global IT market. In order to grab a greater share of that market—he expects to hit $1.2 trillion next year—he has to forge tighter relationships with solution providers, especially in the United States. "I can't hire enough humans. The only way I can get there is that I have to have friends of HP," he said.
Hurd also made clear that meeting and speaking with partners is part of his everyday job. "Every trip I go on, I try to have a partner meeting. Generally, I meet with two or three in every city I go to," he said.
In solution provider meetings at HP's recent Americas Partner Conference, for example, he challenged channel executives to tell him what HP is doing right and what it needs to do better. He promised to send e-mails or make phone calls to solution providers' customers if they needed help in closing a deal, according to solution providers that met with Hurd.
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As Rick Chernick, president of Camera Corner Connecting Point, an HP solution provider in Green Bay, Wis., said, "Mark Hurd gets it. You have to think small to get big."
Added Mont Phelps, CEO of NWN Corp., a Waltham, Mass.-based HP solution provider, "Mark Hurd understands that HP needs to get more aggressive at the street level and now everything is moving in that direction."
Hurd's channel push and solution providers' response to it should go a long way in fixing holes in HP's channel relationships. According to the Channel Champs data, while HP scored more overall category wins by a large margin, its one shortcoming was in its efforts to manage channel conflict. In storage management software, for example, HP finished third in the channel conflict criterion despite having the highest overall program and support satisfaction rating. That scenario repeated itself in the notebooks and mobile computers category, where HP tied for second in managing channel conflict.
But solution providers noted that a sure route to Channel Champion status is for vendors to closely sync their marketing plans with their channel partners and to remain consistent with their channel programs. "A strong channel program is where the vendor works with their resellers to try to drive business together," said Manuel Villa, president of Via Technology LLC, a solution provider in San Antonio.
Villa added that joint marketing between the vendor and the solution provider is key. "I'm talking about inviting vendor representatives into joint [face-to-face] marketing sessions with customers. We have the customers and the vendors have the products."
Villa cited Fortinet Inc., Sunnyvale, Calif., and SonicWall Inc., also in Sunnyvale and Channel Champs award winner in the SMB WLANs category, as two of his vendors that are proactively going after business with him in joint marketing programs.
Simplicity and ease of doing business are hallmarks of Channel Champions, solution providers said. "The majority of the vendors try to push product, solutions and software," noted Brian Deeley, manager of Graymar Business Solutions Inc., a solution provider in Timonium, Md. "It's all about selling something for them, but you have to jump through all of these hoops to reap the rewards of their channel programs."
But he said that Intel Corp., the 2008 Channel Champion in the client and server processor category, is the exception. "All Intel wants us to do is promote and sell their products," he said. "We don't have to report our sales to them or track our rebates. We simply make Intel motherboard and processor
purchases through authorized Intel distributors, and Intel sends us rebates based on distribution point-of-sale records. Every vendor could learn from Intel," Deeley said.