Q&A: Mark Hurd, HP Chairman and CEO

Hurd: I have to think of the partners no differently than [an HP-badged person]. That's what I keep saying to partners; you're me and I'm you. It's got to be one integrated relationship. It can't be confrontational. It's nothing more than a decision of where I'm going to put my resources. If I'm going to put it with you, you'd better darn well be as good as me or I'm not going to win. So when I show up with partners, I want consistency, predictability and simplicity. That's the same thing our employees want.

I'm coming to you channel partners saying, 'I want you to be as loyal to me as I am to you. I want to have that relationship where I can bank on you, and the more you do with me, the more I can bank on you.' I want partner loyalty. This is all one ecosystem—to get the right people in front of the right buyers at the right time and with the right capabilities at the right cost. To get that done, then we have to get the best partners in the world doing it.

What are some specific channel accomplishments during your tenure that have benefited both HP and your partners?

Hurd: We've more [salespeople] people out there. For our loyal partners we want to create demand. Our people are creating demand for HP products; they are not out there trying to determine channel preference. We tell our partners all the time, if you can close that business and get it done right, we'd rather have you have the business than we have the business. Here's the economic problem: I've got to get that number [HP's share of the 2009 $1.2 trillion global IT market] as high as I possibly can get it and we can't do it alone. I can't hire enough humans. The only way I can get there is that I have to have friends, I have to have friends of HP. What I'm looking for is to have the best friends I can get. Casual acquaintances don't help me near as well as friends. I'm a big believer that when you get a relationship, it's got to be a great one. For me to go around and have a gazillion channel resellers, that gets you an answer, but does it get you the optimal answer? Are you better off with fewer great ones than less average ones? The bad stuff is that we have some causal resellers that have some relationships with customers that prefer HP and were one of many products that they carry, and one of the reasons they don't like where we are headed, is because we're saying it's not that great a relationship for us. What we are telling channel partners is listen, here's where we're trying to go. We're trying to go in certain geographies. We want to after specific target markets, they could be of an industry, they could be a segment, or they could be of a mixed product set—an integrated portfolio of solutions that we are bringing to market. And then we want you to attack that market with us. Just for you to sign up with us and say you're another guy that carries ProLiants is semi-interesting to us but certainly not fascinating to us.

But what do your most loyal partners get in return?

Hurd: It depends on the plan. We are sitting down with partners and saying, 'Let's talk about a plan.' We are willing to invest in those plans. We've made investments in channel. We've make investments in services plays. We've made investments in solution segments. We're not afraid to invest. Just to be frank, we're taking money away in areas that we don't think are of any value. We're not trying to say that all partners are going to always be the same. There are some partners that are willing to step up and say we are going to go at this target market and we're willing to put some extra skin [in the game for] the partner to make sure something happens. And our point is, 'OK, if you're going to make that commitment, we're going to make that commitment too.' We have partners that love to take our brand and sell a unit, hollow out our unit put a whole other set of stuff around the unit, and say they are an HP partner and come back to us and collect channel compensation dollars. We're not that interested in low-value-add channel activities.

You have this ideal vision of a loyal HP channel partner. Do you have more or fewer of those partners than you had a year ago?

Hurd: I think we have more this year than last. This is not a thing where we get more logos. We need quality partners. Sometimes getting one, two, three, four or five is not a worse thing than getting 10 or 15. There are a lot of quality partners that could do more with HP.