HP Channel Exec Reaffirms Channel Commitment Amid Reports of Restructuring

Tom LaRocca, vice president of Americas Partner Development and Solution Partner Organization, said that all signs he has seen from new HP CEO Mark Hurd are positive for partners.

"He is meeting with the partners, so I think he is developing a good understanding of how we go to market and how the channel works," LaRocca said. "Beyond that, I have really got no insight into what he's planning or what changes could possibly be taking place. All I can do is go by the fact that the [Solution Partner Organization] is growing. You go back to the quarter-over-quarter growth. That is always a good thing."

LaRocca's comments came as HP reportedly is set to unveil a major restructuring that could be announced as soon as next Tuesday. Cindy Shaw, an analyst with Moors and Cabot, wrote recently that a Silicon Valley source told her to expect news of a major layoff by Monday. In her report, Shaw said HP could fire between 15,000 to 25,000 employees. Over the past few weeks, Wall Street pundits have been expecting headcount reductions in the 5,000 to 15,000 range.

Synnex CEO Bob Huang said the Fremont, Calif.-based distributor has been working very closely with HP. "So far we have not heard anything from Hurd's office that he will change the direction," he said. "If you look at the business, I think he will look at it and say the channel is needed, efficient and lower cost than they can do it."

Jay Tipton, vice president of Technology Specialists, an HP partner in Fort Wayne, Ind., said which HP employees are laid off will determine how the cutbacks will affect the channel. "It depends on who they lay off," he said. "If they are trying to sell direct, they will lay off channel folks. If they cut their channel folks, I don't want to be looking to HP as a partner."

LaRocca stressed that HP's channel commitment has gotten stronger over the last several years.

"We want to grow [our channel business]," LaRocca said. "There was confusion probably over what our channel strategy was a long time ago. We have come out and publicly stated we are committed. We want to grow that business. It is a huge portion of our business, and we want to keep on growing the business."

David Dennis, senior vice president of product marketing who has managed Synnex's HP relationship for the past eight years, said the HP channel commitment is stronger than it has been in many years. "The first year or so after the merger there was confusion," he said. "For the last couple of years, it has been steadily clarifying. HP is definitely committed to the channel. Look at how many HP folks came to this conference to talk to our customers. I don't think you'd see that if they weren't committed to the channel."

More than a dozen HP employees were courting Synnex VARs at the national conference vendor show Thursday night, Dennis said. "Everyone is upbeat and optimistic about how HP is working with the channel right now," he added.

LaRocca said that one of HP's strengths going forward is its broad product line. "That is our biggest strength," he said. "We have got a wide breadth of products, and we are one company you can go to market with and provide everything to the customer."

As for changes to the HP agent program which in some cases reduces agent fees, LaRocca stressed that marked the first time in four years that HP had changed the agent fee structure.

LaRocca said the agent fee change was not a reaction to Dell. "It was just HP wanting to grow the business, keep the revenue going in the right direction and being able to be competitive on all the deals," he said.

"We had kept it in line for four years and felt like competitive pressures are such that we need to take a look at our business controls and make adjustments that we feel are necessary."

LaRocca said there are no additional changes being looked at in regard to the agent model. He said the company does not see the agent fees changing the mix between HP agent revenue or distribution revenue.