Microsoft, HP: Time To Make It Right For Channel Partners


It is sad to say, but the oldest, largest and longest-standing channel partners in the industry — Microsoft and Hewlett-Packard — are becoming less and less relevant to solution providers. And unless they change course and more actively engage solution providers, both companies are going to do serious damage to a program, a culture and a heritage they spent decades building and cultivating.

Let's start with Microsoft. Of all the decisions in 2012, this was the one that has perplexed me the most: Microsoft's surprise Surface announcement and its decision to circumvent the channel for distribution. From its secretive last-minute news conferences to the Microsoft retail stores, the company is so obsessed with imitating Apple that it is turning its back on the enterprise—the one area where it could actually displace iPads.

Yes, the BYOD threat is real and the tablet market-share numbers are foreboding, but why isn't Microsoft ighting the battle in the enterprise market where it has a stronghold? That would play to its strength and heritage and give it chance to enter a market where Apple is weak. Honestly, if my company gave me a tablet that had all my enterprise apps on it and I was able to download a few personal apps, I would use it. And I would probably use it at home and not buy an iPad. But this isn't Microsoft's current approach. Instead, Surface today is a wanna-be iPad with a slightly interesting keyboard that I have to buy on my own dime.

[Related: The Worst Channel Decision Of 2012]

Solution providers building out data centers and working with the enterprise make no money on Microsoft's software offering. But they could on the hardware if Microsoft created a program to get the devices out to companies where partners could provide the mobile integration services. By upsetting the channel and focusing its efforts and dollars on consumers, Microsoft stands to lose in the place where it is the strongest. In fact, it is already losing. Hundreds of millions, if not billions, are being spent on broad-based marketing and, despite this effort, analysts report anemic sales, and Samsung recently said it will no longer produce a Windows RT tablet.

Now let's move on to HP. Righting the ship has proven harder and will take longer than HP executives anticipated. While the company is looking inside at operational issues within each product line and declining sales of HP's core products, it has dropped the ball on engaging the channel. Channel conflict in the field is growing and business units are driving individual partner programs, according to solution providers. Many feel there is no advocate for them within HP. What's more, partners say that market development funds and incentivebased funding dropped significantly in 2012. The worry is as HP looks to fix the problems internally, the market will have passed it by. Some solution providers are vocal about their displeasure, but others are just quietly investing in Cisco, Oracle, VMware and EMC.

The sad part is most solution providers are rooting for HP. They wanted HP to turn this around. But the reality is they need to be profitable to survive themselves and if they don't see programs and incentives to sell HP product, they will be forced to look elsewhere.

Microsoft and HP say the channel is important, but 2013 is the year they prove it to solution providers or become the latest in a list of companies whose time has come and gone.

BackTalk: Kelley Damore, SVP, Editorial Director for UBM Tech Channel, writes a monthly opinion column. You can reach her via email at kelley.damore@ubm.com.

PUBLISHED FEB. 4, 2013