HP To Limit Partner Incumbency In Enterprise Accounts

"What I'm interested in doing this year is not granting incumbency for any channel partner. There is no strategy for that," said Jack Novia, senior vice president for HP's Americas Technology Solutions Group (TSG). "The goal is that when you put an account plan together, you are going to work with the value partner who has the best capability to win market share in that account. In some cases, that might mean dealing with three different types of partners."

Some HP enterprise partners, aka value partners, have expressed concern that as HP realigns its sales strategy and integrates key enterprise partners with the TSG sales force, some HP sales staff have been protecting incumbent solution providers by keeping other HP business partners out of an account.

The problem is that the solution provider may have a long history of selling servers and PCs in the account but little experience in implementing complex enterprise solutions, according to enterprise partners. As a result, HP and the value partners are missing opportunities, they said.

"Somebody might want to obtain industry standard servers at a low price and high availability, and there is no application discussion. That's a volume partner play," Novia said. "If they have a relationship with the client, god bless them. Keep selling. It is not intended to be the incumbency for a volume player to walk into a complex SAP environment, for example, and roll out a server and storage strategy, pulling together all the data elements from software acquisition to installation. That's a value play."

On an account-by-account basis, HP tests the capability of the partner in the account, Novia added.

"If you are an incumbent partner who is doing a great job from a customer value point of view and from a growth point of view, we are going to support the heck out of you," he said. "If you are an incumbent partner and your customer satisfaction levels are low and your growth is not there, we are going to work with you to put together a rapid get-well plan or switch incumbency. It's important that the HP brand stays strong in these relationships."

HP is determined to partner in accounts with solution providers that give them the best shot at winning new business, said Steve Morrison, executive vice president at NetDirect Systems, an Apex, N.C.-based solution provider.

"That doesn't necessarily mean that the partner that is currently engaged [in an account] is delivering that value. That's where HP is coming from," said Morrison, who also is president of HP's enterprise VAR council. "They want to engage with the partners that give them the best chance of winning the business. Incumbency is important, and there is a loyalty factor that exists that HP has to be cognizant of. But ultimately, they want to put their best foot forward in partnership with people who are bringing the best value to the deal."