12 Months In The HP Channel10:00 AM EST Mon. Feb. 18, 2013
Hewlett-Packard's solution providers in the past 12 months have seen more than their share of ups and downs as the vendor moved to steady the company in the wake of two CEO changes in 2011 that resulted in wrenching shifts in direction, especially in regards to whether HP would or would not remain in the PC business.
The shifts in 2012 were no less dramatic, despite new CEO Meg Whitman's pledge early in the year to be the "steady hand on the tiller for this company." Whitman in 2012 had to deal with the departure of several top executives, nearly all of HP's top channel execs. She was also called on to deal with questions about the future of its PC business, its services business, and that incredibly expensive but supposedly scandal-ridden decision by her predecessor to acquire Autonomy.
Can the Good Ship HP right itself? Time will tell. It is a large enough company that sheer momentum will carry it through many of its trials. Turn the page and see how the company and its channels fared in the past year.
Meg Whitman, who in September 2011 took over as CEO after the short but tumultuous reign of Leo Apotheker, told partners at HP's Global Partner Conference 2012 that they've been through a lot in the past year.
However, Whitman vowed to make it up to them by steering HP back in a drama-free direction, promising to double-down on R&D and come up with a stable mobility strategy. "I want to be a steady hand on the tiller for this company," Whitman said in her keynote. "We're going to return to being the reliable, trusted partner you can count on to build your businesses."
Whitman later that month promised to make cost cutting a top priority at HP, including eliminating "silos" in its organizational structure. "For years, we've basically run our business in silos, and under that model, we've built some of the leading franchises in technology. But, it has also made us too complex and too slow," she said.
HP merged its PC and printer business units and appointed Todd Bradley, executive vice president of the Personal Systems Group, as head of the $66 billion merged business unit, now known as the Printing and Personal Systems Group (PPS). That left no space for Vyomesh Joshi, executive vice president of HP's Imaging and Printing Group (IPG) and a 31-year HP veteran, who left the company.
However, there was room for a couple new channel chiefs. Mike Parrottino, who had led U.S. channel sales for HP's Personal Systems Group, was appointed head of the PPS Americas channel organization. He was joined by Scott Dunsire, previously vice president of Imaging and Printing Group (IPG) business and sales management in the Americas Solution Partners Organization, who took over HP's U.S. SMB channel sales. The integration of the PC and printer businesses was later scheduled to be finished some time in 2013.
HP lost two of its top channel execs in May and June. Frank Rauch, vice president of U.S. channels in HP's Enterprise Servers, Storage and Networking division, left the company to become vice president of VMware's Americas partners organization. Rauch in September was eventually replaced by Terry Richardson. And, Meaghan Kelly, vice president of channel strategy at HP, in June left the company for SAP, where she took over as vice president of global channel marketing.
May also saw HP switch the roles of Parrottino and Dunsire shortly after getting new assignments in the PPS group. Dunsire was named vice president and general manager of PPS U.S. channel sales, while Parrottino was appointed head of U.S. SMB channel sales. HP in May also lost Gary Koopman, former vice president of U.S. distribution at HP. He joined arch-rival Oracle as group vice president of North America hardware, alliances and channel sales. Koopman followed Tom LaRocca, former vice president of marketing and strategy in HP's Solution Partners Organization, who left in January to join Oracle.
HP disappointed a lot of channel partners when it said it would stop selling the VCX VoIP line it acquired with 3Com. It was a move longtime VCX solution providers called a big mistake given the product's loyal channel following and potential to make HP a truer end-to-end networking competitor against Cisco Systems.
HP said it would sell phones and software licenses into 2013 and will continue to support VCX customers for the HP-standard five years, and would also assist larger VCX customers with migration strategies. However, the company said it would start pointing partners and customers toward VoIP and unified communications solutions from strategic allies such as Microsoft, ShoreTel and Aastra.
HP was slow to roll out Autonomy products to the channel, but in July said it brought in a new channel chief, Stephen Reny, to develop the framework for a worldwide channel program for Autonomy.
Reny is senior vice president of market development for Autonomy.
It was welcome news to HP partners that had been frustrated with the slow pace of the rollout of an Autonomy channel program.
HP won its long-running legal battle against Oracle over Oracle's decision to stop developing new versions of its software applications for HP's Itanium processor-based servers, but by then it had pretty much lost the war.
The judge in the HP-Oracle lawsuit released the text of his final decision in which he concluded that Oracle is legally obligated to continue developing its software for HP's Itanium processor-based servers for as long as HP continues to manufacture them.
However, the dispute with Oracle had by then led to a massive drop in sales of HP's Itanium-based servers, a line that for decades had been profitable for HP and its long-term channel partners.
Oddly enough, those HP servers had traditionally been one of the biggest installed bases for Oracle's software, meaning Oracle's move to kill HP's server business also hurt its own software business.
HP, after pulling back from its announced plans to consider selling its PC division, had to deal with reports that it explored options for selling its Electronic Data Systems (EDS) outsourcing business and indeed had put out feelers to potential buyers.
The possibility that HP, which in August said it expects to write down $8 billion from its Services division, would sell off EDS caused concerns among solution providers that worried it could create the appearance of further turmoil at a company that has seen more than its fair share over the past few years.
HP's networking business and channel took a big hit when Kevin Hooper left HP.
Hooper, a well-known sales and channel executive and most recently vice president and general manager for HP Networking, joined HP in 2007 but was head of its networking business for only six months.
He is now senior vice president of enterprise platform solutions at NEC Corporation of America.
HP unveiled new systems for managing Enterprise Services employees and matching them to customer assignments to overcome barriers caused by outdated internal systems, and the company said it will implement a new operational model for Enterprise Services in which salespeople for the unit's top 200 customers will be more accountable for revenue, cost and profit by 2013.
The company also unveiled HP Multivendor Services, a system for making life easier for partners that work with multiple vendors on data center maintenance services.
Under HP Multivendor Services, the company is training its call center staff to field customer support calls for both HP and non-HP products, thereby enabling partners to maintain relationships with clients for issues that fall outside HP's purview.
HP officially re-entered the tablet market by pre-announcing its ElitePad 900, a business-class device with an Intel Clover Trail Atom processor, a 10.1-inch display and Microsoft's Windows 8 OS. The ElitePad 900 was eventually released in January of 2013.
Partners waiting for an HP smartphone, however, are out of luck for now. HP CEO Meg Whitman said in October that while she does not expect HP to release a smartphone until 2014 at the earliest, her company will be a major force in the tablet and mobile PC markets.
HP shocked the investment world and the channel when it said it was taking an $8.8 billion charge against earnings after discovering what the company called "serious accounting improprieties" by Autonomy.
That led to a shareholder lawsuit against HP's Board of Directors, other HP execs and the accounting firms that advised HP on the acquisition.
It also prompted the start of a Department of Justice investigation into alleged accounting improprieties surrounding HP's acquisition of Autonomy, as well as a finger-pointing between HP and former CEO Leo Apotheker.
HP added new services and programs to its Converged Cloud portfolio, including more support for its channel partners, allowing them to offer cloud services to clients across private, public and hybrid clouds.
This included adding new features to its HP CloudSystem, which allows HP solution providers to build and manage cloud, and extending existing programs.
For its Cloud Maps program, HP increased the number of templates by 30 percent, adding more than 200 templates to its catalogue with which partners can add programs such as Microsoft Exchange and Microsoft SharePoint to their cloud services offerings for customers.
HP CloudSystem is also offering service lifecycle management as well as support for KVM virtual machines and bursting capability, or the ability to tap the full computing capacity of service providers.
In HP's annual 10-K filing with the Securities and Exchange Commission, the vendor listed its "need to rebuild our business relationships with our channel partners" alongside other strategic goals such as boosting R&D spending, revamping internal tracking and reporting systems and ironing out organizational inefficiencies.
The notice was welcome news for partners that were concerned that HP's traditional strong commitment to the channel had been wavering.
HP in January found itself once again denying plans to sell off its PC business.
Concerns in the channel about that possibility sprang up after a late-December SEC filing in which HP said it is considering selling off underperforming assets and business units.
That forced HP to once again address concerns about a possible sale of its PC business. HP's Chief Strategy Officer Mohamad Ali told CRN that HP CEO Meg Whitman has continually said she is committed to the PC business, and that nothing has changed.
"We are committed to the PC business," he told CRN.
HP said it is in the process of rolling out revised rules of engagement for its salespeople. The revision will spell out what behavior is and is not acceptable in regards to working with the channel.
The revised rules, expected to be unveiled at February's HP Global Partner Conference, are part of a broader campaign to rebuild channel trust.
Under the revised rules, once a deal is registered with a solution provider, an HP sales rep will not be allowed to take the customer direct unless requested by the customer and only with the approval of the channel partner. And, solution providers that find a case of channel conflict will be able to escalate issues to HP executives, something that previously was not a part of HP's policy.