Channel Incentive

But solution providers attending the Arrow SBM PowerTrain conference here last week said HP needs to fill in the details on the rules of engagement surrounding its new PartnerOne channel program.

Bill Weaver, HP's vice president of U.S. enterprise and commercial sales, said HP salespeople will receive no compensation for direct enterprise product sales outside the 850 accounts that HP has targeted for a direct relationship.

What's more, HP salespeople will earn commission on enterprise channel sales based on 70 percent of list price, regardless of the final negotiated price. For direct sales, however, they will earn commission only on the actual sales price. Because list price is almost always significantly higher than net, HP salespeople will receive higher commissions for channel sales, Weaver said.

"Compensation for Unix and enterprise storage products will be greater through partners," he said.

Weaver, the head of HP's U.S. sales force and one of more than 50 HP executives attending the gathering of Arrow SBM's HP enterprise partners, said solution providers are key to growth. The midmarket, where HP doesn't sell enterprise products direct, "is where all the new business will come from," he said.

But John Orr, president of Stack Computer, Irvine, Calif., said he has problems with HP's Partner Engagement Policy, which allows HP direct to compete against a solution provider if the partner is not offering an all-HP solution.

Orr said at the conference that he has one large insurance company customer to which he sold HP-UX and OpenView to displace Sun Microsystems but included EMC storage in the deal. As a result, HP's direct-sales force is now competing against him in the account.

"Our intention is not to displace a partner," Weaver said. "There are some elements of [Orr's deal we like, but we are going after EMC in a big way. Let's overcommunicate up-front to minimize the problem."

Weaver also acknowledged that HP is mounting a new Sun attack program. "It's a confidential program inside the company targeted at some specific accounts around Sun," he said.

As part of the PartnerOne rebate program available to all HP solution providers, HP is paying 15 percent on net to solution providers that displace a Sun or IBM system with an HP-UX offering.