Whitman Must Bury 8/18/11


August 18, 2011 is the day that will live in
infamy for HP VARs. In one fell swoop, HP’s
former CEO, Leo Apotheker, announced it was
possibly spinning off its PSG division, killing its
six-week-old TouchPad tablet and buying a UK
software vendor, Autonomy, for more than $10 billion.

Over the months, this date has been specifically referenced
time and again by VARs -- and even HP executives -- as an indelible
mark left on the company -- a time when the biggest IT
channel was turned upside-down and defined more by uncertainty
than predictability.

One cannot understate the damage
done to the channel by the 11-month
tenure of Apotheker. Since 8/18, the
HP channel has been in limbo trying
to decide whether it should stick with
HP, or diversify and invest in other
vendors. This is all against a backdrop
of extraordinary change within the
technology marketplace as VARs try to
shift their business models in order to
capture some of the cloud and mobile
revenue. Still others are looking to an
unlikely ally -- Apple -- in light of its
astounding iPad success.

And HP’s other competitors aren’t
standing still. They are aggressively recruiting
some of HP’s finest and architecting
its field sales force to capitalize on the uncertainty. Cisco,
who had its own share of difficulties during the past 18 months,
seems to have recovered and, according to VARs, is a formidable
foe with a field sales force that is working hand-in-hand with
the channel. HP meanwhile, they grumble, does not have a clear
channel strategy and the field is rife with conflict and confusion.

Enter Meg Whitman. One hundred days on the job, Whitman
has been forced to focus on cleaning up the chaos Apotheker
has rent. But in the next 100 days, she needs to prove she understands
channel dynamics, has an overarching vision for where
HP needs to go and communicates that strategy far and wide.

One of Whitman’s strengths -- from her days at eBay and on
the campaign trail in 2010 -- is communication. She will need
those skills to assuage solution providers’ fears. HP’s channel
clout and influence is waning as it loses mind share and market
share. While Whitman hasn’t met with many channel executives
face to face yet, she needs to hear their concerns. Ironically,
she also needs to take the politics out of HP and break down
the silos that are so firmly entrenched in the company. Today,
HP is a company of individual product divisions rather than a
company that stitches products onto an overall vision.

Furthermore, Whitman should take
a page from HP’s old playbook, circa
2001, when channel engagement was
at an all-time high. One of the first
changes she should make is to appoint
a channel chief. In years past, HP had
one channel chief who was the channel
face of HP. Other large technology
vendors have a similar role. HP
has moved away from this and has
upwards of a dozen “channel chiefs”
within divisions that report up to the
division presidents, making it difficult
for solution providers to align a face
to HP’s channel.

Finally, HP needs to reinstitute the
“hard deck” to minimize conflict in the
field. This was a list of companies that
HP’s direct sales force owned, and any companies outside the
hard deck were fair game for the channel. Today, the hard deck
is unclear or unspoken. What’s more, many of HP’s competitors
have implemented a similar model.

Reversing course is a big job for Whitman, but hopefully a
year from now, 8/18/11 will be a distant memory, and HP and
its channel will be back in all its glory.

BACKTALK: Kelley Damore is VP, Editorial Director
for UBM Channel. You can reach her via e-mail at
kelley.damore@ubm.com.