More Details Of HP's PartnerOne Come To Light

"We're very enthusiastic about PartnerOne," said Mike Cox, executive vice president of sales and delivery at Logical Networks, Chicago, HP's largest North American solution provider. "We have the potential to double our current margins."

The margin gains would result from a series of incentives attached to PartnerOne that reward partners for winning new accounts, wrestling business away from competitors and selling products into targeted vertical markets.

Dan Vertrees, HP's vice president of enterprise partners for the Americas region, said the new partner incentives will be divided into two classes,ongoing and transactional.

"Ongoing [incentives require attaining a membership level, but everyone can play in the transactional [class," he said.

PartnerOne has three different membership levels: Business Partner, Gold and Platinum. Solution providers said the Business Partner level can be reached simply by maintaining current certifications and sales requirements. The Gold level requires that the solution provider maintain five HP-certified technicians or sell $10 million annually in HP products, solution providers said. The Platinum level requires $75 million in annual sales or 15 HP-certified technicians.

Some smaller regional enterprise solution providers said the gap between the Gold and Platinum levels is too great and will put them at a disadvantage.

Don Richie, president of Sequel Data Systems, Austin, Texas, said enterprise VARs that sell only high-end solutions and few PCs will be penalized because they won't have the PC revenue to push them into a higher membership level.

But Vertrees said transactional incentives, earned by displacing an HP competitor or winning new account business for HP, apply to all HP partners, regardless of membership level. Ongoing incentives reserved for Gold and Platinum partners include hitting agreed-upon quarterly growth goals, maintaining status as a diversity partner (a business owned by a woman or a member of a minority) or selling specific vertical solutions.

Business Partner-level solution providers receive no market development funds (MDFs) under PartnerOne, according to the company. But Gold-level partners will receive 0.3 percent MDFs for commercial product sales and 1 percent for HP enterprise product sales, and

Platinum-level solution providers will receive 0.3 percent for commercial sales and 1.5 percent for enterprise sales, the company said.

All HP product and services sales will count toward attaining the various membership levels, Vertrees said.

Partners on average could receive rebates from HP ranging from 2 percent to 8 percent, depending on the products sold, he said. "Partners can pick and choose and put a master plan together based on where you are, as a partner, with your core competencies today," he said. "And you may also want to shift some resources to product groups that have higher rebate percentages."

Vertrees declined to give specific product group percentages but said personal systems would be at the low end of the schedule, while network storage, business-critical systems and software would be at the high end.

He added that rebates could be doubled in some cases if the products were sold to new accounts.

On the services side, Vertrees said solution providers can sell services packages that will be delivered by HP Services. Or, if they have the technical authorizations, they also will be able to deliver the services they sell as part of the services contract. "We want partners to augment and extend [HP Services capabilities," he said.