HP's Hurd Promises More Channel Resources, But Likely For Fewer Partners

Hewlett-Packard CEO Mark Hurd said HP will give channel partners whatever resources it takes to beat Dell, IBM and other rivals, but in the future he sees the vendor going to battle with fewer but more loyal partners.

"We are looking for aggressive help, and we'll get just as aggressive as we possibly can to go to the marketplace and win in these strategic battlegrounds," Hurd said late Monday in a keynote address to 1,200 solution providers at HP's Americas Partner Conference in Las Vegas. "We need you. We need your help. There's virtually nothing we wouldn't do short of illegal or unethical to help you go to the marketplace and win."

Industry standard servers (ISS), specifically blade servers, are a key battleground for HP, which faces pressure from IBM down from its mainframe base and Dell coming up from its PC heritage, Hurd said. To help drive HP server sales, the Palo Alto, Calif., company on Aug.1 plans to launch a back-end rebate program for ISS that will increase rebate payments to partners by about 50 percent, he said.

Hurd promised continued support to the channel plus improved operational efficiencies from HP, which he said would help HP and its partners win together. But down the road, that combination may involve fewer HP partners.

In response to a solution provider question on where he sees HP as a company in three years, Hurd said, "I hope we would be leading in most efficiency categories. I hope we are [in a] three-year evolution of the trends and strategies I have described ... and the channel, if it is not doing the same percent of business, doing more.

"But at the same time, I would like to see higher attach and higher loyalty indexes coming out of our channel," Hurd continued. "If that means for us to coalesce around fewer channel partners, I'd be fine with that. If you look at our aggregated list of channel partners, we almost have as many people that call themselves partners as we have employees in the company. We want to put more energy behind key partners that really want to rally behind us."

In the battle against Dell, Hurd said, "We are not that good [in efficiencies and execution], but the bad news for them is that we are going to get a heck of a lot better. And I don't think they have room to move."

Hurd noted that analysts project HP to do $91 billion in sales for its 2006 fiscal year, and that number would likely help HP pass IBM as the world's largest technology company. For decades, IBM referred to itself as the world's largest IT company at the bottom of its press releases, and if HP passes IBM for that honor, "watch the bottom of the press release," he joked.

Hurd's fighting words for the channel resonated with partners, who punctuated his keynote with frequent applause and laughter. "If he delivers on what he said, he's right on the money," said Rick Chernick, CEO of Camera Corner Connecting Point, a Green Bay, Wis.-based solution provider.