15 Things You Need To Know About HP's PartnerOne Overhaul11:00 AM EST Tue. Feb. 19, 2013
Hewlett-Packard is aiming to put a year of channel trials and tribulations behind it with a massive overhaul of its PartnerOne channel program unveiled this week at the company's Global Partner Conference. The program comes with many solution provider partners anxious to see if the $120 billion behemoth with the industry's broadest partner program supporting as many as 180,000 partners is going to put its money where its mouth is as it mounts a comeback.
HP knows that back-end rebates are critical to partner profitability. The new PartnerOne is heavily weighted on the back-end rebate with a program that allows partners to earn those back-end rebates from the first sales dollar. That's a blockbuster change since 40 percent to 50 percent of partners did not qualify for those back-end rebates last year because they failed to meet their HP sales quotas. HP says the average partner will earn 5-10 percent more in total back-end rebates. The computer giant paid out $2.5 billion in back-end rebates to roughly 160,000 partners in the last fiscal year and plans to exceed that dollar amount this year.
The program rewards partners that invest in higher specialist HP certifications with increased rebates. Stacking HP certifications like advanced networking specialist and converged infrastructure specialist means big bucks for partners. HP, in fact, promises that partners that increase their HP certifications and sell more of the HP product line will earn more than they would selling the siloed offerings from competitors. "If you sell more of our product line, you can earn more money with us," said Doug Oathout, vice president, channel and alliance marketing for the Enterprise Group. "That's what we want. We want our partners to sell the full [HP] portfolio."
The new PartnerOne eliminates a cap on how much partners can earn on back-end rebates, opening the door to virtually unlimited income for partners. Under the old program, depending upon the region, partner's back-end rebates were capped once they hit 300 to 500 percent sales-growth targets. Partners say those targets were tough to hit. Nevertheless, the new program eliminates them, rewarding partners even when they post astronomical sales gains.
HP is backing up its new PartnerOne program with new rules of engagement aimed at preventing HP direct salespeople from poaching accounts from partners. Under the revised rules, HP says it "will not move a customer from an indirect sales model to a direct model on specific registered opportunities without express engagement with the channel partner, and it must be based on customer choice only." HP CEO Meg Whitman, for her part, says HP salespeople who ignore the rules will find themselves out of a job. "If you are scooping a partner deal that you have no business having your fingers in at all, then we will take care of that. It's not appropriate."
HP is extending the amount of time partners have to use all important market development funds (MDF) from three months to six months. That gives partners more time to work hand in hand with the HP Partner Business Managers (PBMs) plan and roll out events and seminars aimed at winning new business. No small matter given partner complaints that HP MDF funding was on the decline last year.
HP's Vertica Analytics Platform is now part of PartnerOne. HP said it is recruiting not only current software partners for the Big Data product but also longtime infrastructure partners. Those infrastructure partners will now be able to sell the analytics platform with pre-integrated solutions on HP Servers. Given HP's sizable server market share and the increasing demand for big data solutions, HP Vertica Analytics is a guaranteed big opportunity for partners. HP estimates the capital investment in certifications and training to sell Vertica Analytics at about $150,000.
HP's Autonomy software suite, considered a scarlet letter of sorts given HP's $8.8 billion charge against earnings related to the acquisition of Autonomy, is coming to PartnerOne. But, don't hold your breath. The Autonomy partner initiative is being piloted with specialties related to the software suite being phased in throughout the year. "We have to go see what the capabilities are with our partners in [specific] industries," said HP's Oathout. He says it may be fiscal year 2014 until Autonomy is officially part of PartnerOne.
HP's New Business Opportunity (NBO) program aimed at providing a higher margin for new HP customers is moving from a back-end rebate to a front-end incentive offering. HP says the NBO incentive will be paid up front with the option for the partner that registers the deal to provide a discount to the customer, provide a higher commission for the sales rep or drop directly to the partner's bottom line. Those NBOs primarily come in areas like software, networking and storage, where HP's customer share is not as great as in the server and printer markets. HP says NBOs accounted for about $200 million in incentives in the past. That's money that partners will now get on the front end, eliminating costly paperwork associated with getting the funds.
HP is reducing the number of certifications required for partners to achieve specialty designations by 60 percent by fiscal year 2014. The changes in the HP ExpertOne program are part of HP's drive to make it simpler to do business with the company. Partners say that could give HP an edge in getting more partners to commit to HP given the more stringent certification requirements from some HP competitors.
HP Financial Services, the IT giant's leasing and asset management services subsidiary, is stepping up to the cloud computing plate with a new program that allows partners and customers to finance large-scale cloud deployments as a monthly operating expense rather than with an astronomical capital expenditure. Look at this as HP wielding its impressive financial muscle to spark more cloud deployments in an era when a major cloud capital expenditure could run from several hundred thousand dollars to more than a $1 million.
Application modernization is critical to winning new cloud computing business. So, HP is adding a new program that lets independent software vendors (ISVs) test applications using the industrial strength HP CloudSystem cloud platform. HP says the program includes access to a "test and development environment, training, a self-certification process, promotion resources and ongoing HP technical support." HP expects up to 10 percent of the 4,500 ISVs currently in the program to take advantage of the new initiative in the first year and as many as 20 percent in 2014.
Given the huge managed services opportunity, HP sees the new PPS specialization being formally included in PartnerOne as a big step to get any and all HP partners to sell managed print services. HP, in fact, is aggressively recruiting partners to sell more HP services. The PPS addition, previously a separate offering, is all about making it simple to add those services to the partner line card.
It's no secret just how critical the printer supplies business is to HP profitability. In a bid to eliminate printer supply counterfeiting and gray-market activity, HP is introducing the HP Verified Online Supplies Reseller Program. The new program provides authorized HP partners with "an online insignia verifying to consumers that they sell original HP supplies."
HP is investing $100 million in what it is calling a new Unison Platform billed as a single unified channel platform. The new offering, which includes a Salesforce.com module, is bringing 15 separate partner tools from quoting and configuration to lead management and passing into a single unified platform. HP is launching Unison this year, but it will take 18 months until the full comprehensive single platform is completed.
HP, long considered the vendor with the biggest and broadest channel program, is going on a partner recruiting binge. That's no small matter in an era when many vendors are focusing on fewer partners. HP is looking to add 2,500 new partners in its Enterprise Group, 500 new partners in its software group and 200 new cloud service providers. "We are recruiting like crazy," said HP's Oathout. The partner recruitment binge, said Oathout, comes with the IT market growing and shifting to a new set of solutions centered around cloud computing, big data and security. Look at it as HP aggressively recruiting a new generation of cloud savvy partners for its PartnerOne program.