HP's Plan to Move Midmarket Accounts to Channel Gains Steam

Referred to internally as the Atlantic Project, the plan called for HP to turn over in excess of $25 million worth of HP direct maintenance contracts in midmarket accounts to the channel in hopes that solution providers could better serve the customers.

"Most of these customers' only relationship with HP was the maintenance contract," said Jo Ann Redding, vice president, HP services sales for channel partner accounts. She said that some of the customers were not really working with anyone as chosen partner.

"There was really not anyone selling to them," she said. "[By turning these accounts over to the channel] this will give us better coverage in products and solutions."

She noted that only about one-third of the 750 accounts have been transitioned to the channel because the contracts expire at different times, but the process should be complete this year.

HP last year put out an RFP for solution providers to apply for the services transition program, Redding noted, and about 33 were selected. The accounts that were buying maintenance contracts directly from HP then had the opportunity to choose from among the authorized partners in their area, which one would take over HP's maintenance business.

"So far in the last four months we've seen about 12 opportunities [maintenance contracts] come our way in excess of $1 million," said Marc Sarazin, executive vice president of sales and marketing at AdviseX Technologies, an HP solution provider in Independence, Ohio. "About half of those were existing AdviseX customers and the rest were net new customers where will actually be able to sell hardware, software and services [in addition to maintenance]."

Sarazin added that he expects to get more maintenance contracts as the remaining two-thirds of the targeted midmarket accounts transition over to the channel.

Redding agreed that by having local solution providers manage the maintenance contracts that the solution providers should be able to cultivate other HP opportunities in the accounts. "This is a huge lead opportunity for solution providers to get customers they never worked with," she said.

Don Richie, CEO of Sequel Data Systems, an HP solution provider in Austin, Tex. agreed. "At first it seemed a little slow getting started," he said. "But after a few months we started seeing customers come our way. This has had side benefits as well that allowed us to try and sell more HP products into that customer base which helps grow the HP footprint."