QandA: Former HP Veteran Gets New Perspective At Arrow

Ed Burke spent years at Hewlett-Packard trying to convince solution providers to sell more HP products. Hired earlier this year as director of marketing for Arrow Electronics’ HP business unit, Burke has the same goal but is taking a different view on how to get there.

This week, he’s in Atlanta for the Arrow HP unit's PowerTrack event, where 233 solution providers are training and testing for HP certifications. Burke shed some light on his new job and where Arrow and HP are headed in an interview with CRN Distribution Editor Scott Campbell.

CRN: After going through your first couple of months at Arrow's HP unit, what are your observations about working for a distributor instead of a vendor?

BURKE: My first observation is moving from company with about 140,000 people to about 70 in the [Arrow HP] group. The biggest thing is you really can make decisions and become more nimble as a company. We can choose a strategy and move more quickly than inside HP.

To that end, we’ve committed to putting a strong focus on developing beyond our core enterprise Unix server and storage business. We have a real practice around storage solutions and ISV software. What that means is, in the past, we have focused on creating demand for base-level HP products. We have the sales, marketing and technical resources necessary now to evolve to an organization that supports backup, recovery, archiving and other facets of ILM [information life-cycle management]. We also are developing a practice around Microsoft’s SQL server as a new area for us--mainly because in HP, that is a real incremental opportunity and a new area for many new partners.

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CRN: How are you developing programs with ISVs?

BURKE: At our PowerTrack event this week, [solution providers] are meeting the current [certification] requirements that HP has. But we also have brought in eight ISVs centered on ILM to begin the process of having them interact with our resellers. All of these companies are centered on part of HP’s ILM family of partners. HP has 53 total, and we were able to get eight to attend our event this week.

CRN: Who are these companies, and can you describe how you are working with them? Are you reselling their products or playing matchmaker between ISVs and resellers?

BURKE: I like the term enabler. We look at this as a solutions enablement function. Each of the companies address nuances of the ILM market around e-content, document management. They almost all have a strong archiving practice. We’ve invited these eight and, from a reseller pespective, this taking backup to the next stage. We are treating backup and archive as a strong horizontal solution that we believe our partners are interested in investing in, instead of strictly as a vertical approach. There is an ILM group inside HP that manages these guys. What they look for from us is working through VARs that have access to SMB and midmarket customers. Our role is to provide navigation, enablement and support.

CRN: But you are not reselling the products, correct?

BURKE: We have no revenue recognition from software or licensing. Our goal is to partner them with resellers so the resellers drive as much incremental hardware as possible. HP has some [revenue-based ISV] programs, but none of these partners here are part of that yet. CRN: Do you view solution providers differently with Arrow than the way you did at HP?

BURKE: It’s interesting being inside HP and now being part of the channel. In working with HP, they tend to think of the channel mainly in terms of those rare, huge deals and don't spend as much attention on the more profitable but smaller deals. These smaller deals are exactly where we are focused. We believe our role is to assist HP in capturing markets where they do not have the direct resources. Sitting on other side of fence now, I see many partners, day in and day out, serving a wide variety of customers in the midmarket--much smaller deals. In dealing with HP, they sum up the channel as three or four large deals per quarter. More attention by us and HP needs to be spent focusing on the fact that partners are where they should be, in deal sizes much less than $1 million. That’s been my epiphany.

CRN: Does HP have 80/20 vision, meaning that 20 percent of the partners are doing deals that comprise 80 percent of the revenue?

BURKE: We, [that is] HP and us, tend to look at a total revenue number. What’s more important is the number of deals, the average deal size. I don’t have the data necessary to answer that. It is a big percentage of total revenue coming from a small percentage number of deals.

CRN: HP’s AttachPlus loyalty program goes into effect this month. Tell us about the response you’re hearing from solution providers.

BURKE: There is some concern that HP has gone from a monthly membership to this AttachPlus, where they are only paid once per quarter. So resellers have some concerns about cash flow. But they all understand the intent of the program and have pretty broad support for what HP is trying to do.

Many of the most loyal HP guys applaud the program. There are some partners that have core business in, say, Unix servers that have not been selling enterprise storage to their account base. They are looking at challenges. HP doesn’t expect to see returns until later in the year. All the partners not hitting enough storage are coming to us and asking what can we do incrementally to drive their storage attach. Partners that had more storage balance seem to be very excited.

CRN: What percentage of your customers are HP-only? Do you expect that balance to shift as a result of AttachPlus?

BURKE: I don’t know the percentage. We have a number of partners loudly expounding that they are pure HP. They are quite vocal about that. They are looking at [AttachPlus] as something for HP to reward them more. We do have a good group that has a balanced portfolio, maybe more on the consulting side. Those guys are looking at AttachPlus as not too beneficial. It’s too early to say somebody is going to change or drop a product line as a result of the program. CRN: HP isn’t the only manufacturer espousing more loyalty and seeking better attach rates. It will be interesting to see how VARs that carry multiple platforms and/or competing product lines will balance those relationships.

BURKE: People here comprehend the HP programs, and we are recommunicating the message with resellers. We produced an AttachPlus document right on the heels of HP. We launched internally a program around HP’s Portfolio tool that came out about a year ago. It’s a great way for partners to work into the AttachPlus metrics. We look at that as one of our roles, taking HP’s prioritizations down to the [solution providers].

CRN: What are some of the hot products in HP’s catalog now?

BURKE: We’re doing a lot of stuff around storage, the new WAN accelerator and the OpenView product that works on Cisco’s VoIP technology. We’re excited about new service offerings. We’re doing more attach there than we’ve ever done before. And we’re really excited about what Microsoft, Intel and HP have put together on Integrity products to go after the Microsoft market.

CRN: Can you describe that solution?

BURKE: We have list of about 20 partners to go after Windows SQL Server. We’ve got Microsoft-dedicated resources and HP and Arrow people to work with partners. There are a number of [end users] that already have SQL Server that didn’t scale as well as they needed to. Now they can consolidate on Integrity servers much better in the midmarket. It used to be that you had to add more servers--you had to scale out, not up. Now with 64-bit Integrity, you can consolidate servers.

CRN: What’s been the most surprising thing you’ve heard from VARs since joining Arrow?

BURKE: Inside HP marketing, we would announce these strategies and think we were doing a good job communicating them. We’d immediately talk to VARs around a launch, things like, ‘Here’s a new blade.’ Two months into Arrow, I’ve noticed that we are answering a lot of questions later about things that launched a month or two ago. HP launches once and that’s it.

But that drumbeat messaging is one of most important things we do. We have to repeat it over and over. There is so much going at resellers that they may hear it and write it down, but unless it’s right in front of them they may not see it. They need to have us communicate it to them. If I went back to HP now, I’d tell them to turn launches into a six-month event. It’s boring to repeat a message, but it’s very necessary.

CRN: Any final thoughts?

BURKE: We’ve done a great job over the last year with the storage business. Now we are putting a focus on blades business and solutions areas. We’re supporting new ISVs. We’ve got an excellent team to create new demand and win more business in the marketplace.