HP Channel Chief: Dell Doesn't Keep Me Awake

Hewlett-Packard channel chief Adrian Jones, vice president and general manager, Americas Solutions Partners Organization at HP, spoke with CRN Industry Editor Craig Zarley about issues facing HP and its solution provider partners. Here are edited excerpts:

CRN: What are you doing organizationally or programmatically to combat Dell's renewed channel push?

Jones: Dell has to do what it needs to do to win in their market place. We are going to continue to do what we need to do with our channel business. For us, we see Dell in the channel a little bit. But we have a very robust channel model and program. It is something that wasn't built in five minutes. It has taken us many years to build the right program and vehicles that we use. My view is that Dell will continue to do what they need to do for their business and we are going to do what's best for ours. Do they keep me awake at night? No, not yet. But I am not complacent. I know that Dell is a large company and they have been very successful at what they do in the past. We are watching Dell and what they do with their channel programs and their people. But I feel we have a very loyal and trustworthy base of partners that help us grow our business everyday and I think they will continue to be HP partners. I don't see a wave of people going to Dell tomorrow. The channel is a great place to grow your business and we are going to expand on what we are good at in the channel. Just because Dell is coming into the channel, we are not going to reinvent the wheel or change our strategy.

CRN: I've heard reports of Dell in cooperation with one of its channel partners going after HP direct accounts. Have you seen any of that activity?

Jones: I haven't seen that yet. We see Dell in different pockets. We watch them like a hawk in our PSG business and we continue to take share from them everyday.

CRN: What was your thinking behind your Fast Start program designed to quickly get ProLiant server solution providers to sell EVA enterprise storage?

Jones: The Fast Start program is simple. When we look at our business and how we can grow incremental storage outside of our existing partner base, we looked at the top 100 ProLiant server guys that were selling everything from EMC storage to NetApp storage, to HDS storage, to IBM storage, and we said how about selling HP storage? How can we get you interested in selling HP storage and drive incremental revenue?

We went to top ProLiant partners who were selling blades, selling servers and doing well in that and we wanted to marry the two together and sell storage and servers. The whole premise of this is we want to grow incremental storage revenue. We have a big push in storage. And we believe this was an opportunity where we would not get channel conflict by going after server resellers and that's what we've done. We are adding a healthy pipeline with absolutely zero conflict with our existing channel partners. We've talked to a lot of channel partners who have concerns around this and we've set the record straight.

CRN: But why should your enterprise storage partners invest hundreds of thousands of dollars in technical training and certifications when someone new to the program can just watch a video and get certified in six months?

Jones: If you look at how EMC or NetApp go out and recruit partners everyday, they say, 'If you are HP certified, you can go out and sell our product tomorrow.' And the reason we went down this path -- we particularly chose the low end of our EVA storage product, the 4000, 4100 range of products. We wanted to create more emphasis on the low end. We decided that was a good space to go after and we believed it wouldn't be detrimental to our existing partners. The question about certifications is that we are only giving these guys a six-month program. After that six-month process, if they feel they have a need from their customer base to sell HP storage, they have to go through the same process that every other partner does. We are really hooking partners with this today, but they will have to go through the exact same certification process after the six-month pilot process we are putting out there. We have just given a grace period of six months.

NEXT: Mark Hurd's Plans For Fewer, Better Partners

CRN:

Jones: I don't think there is any proactive move to trim or reduce the number of channel partners. Channel partners change by nature of attrition. Some partners may drop out because of a credit reason or they got out of business. There are 25,000 partners in the Americas and 140,000 worldwide. You are going to get attrition no matter what you do. As far as far as making our HP exclusive partners more loyal to HP, we've done a lot of things in the Partner One program to deliver additional benefits for selling more HP products. If you're selling more HP and your exclusively focused on all three business units, IPG [Imaging and Printing Group], PSG [Personal Systems Group] and TSG [Technology Solutions Group], you are definitely going to see the benefits by selling the whole range of products. Anything above that, I don't think we are going to do anything different. The benefits of what our HP partners have today outweigh what other people in the industry can deliver.

CRN: HP is incenting its solution providers to sell the entire HP portfolio, but solution providers say the HP business partner managers tend to be more product line specialists focused on specific geographies. Because of this narrow focus, solution providers say their HP rep is sometimes of little help outside of his or her product or geographic expertise. What are you doing to address this issue?

Jones: In November of last year, we changed the model from a generalist model to a specialist model because we wanted to create more focus on those particular lines of business whether it's ISS (industry standard servers) or IPG or PSG products and have those guys really more focused about what they are selling from a technology perspective and really having our partners focus on those particular lines of business. And I think in the beginning, as you go through any transition with any organization you are going to go through some teething problems, and that may be what you are hearing. But I do believe that we have better focus and momentum with our PBM [partner business managers]. We may have two or three different people from different lines of business calling on partners, but as you can imagine HP is a pretty complex organization with the amount of technology and products that we sell everyday. We want to make sure that we create the right focus.

Having said that, I think that we will continue to evolve. We will continue to do things that help benefit the partners. TSG is a good example. We have areas where ISS PBM specialists may be going into a data center environment where they are selling ISS products, storage and software, or they may be selling BCS [Business Critical Systems]. You don't necessarily want four or five different people going into a data center environment. So what you'll see coming out of my organization are more data center specialists where they focus on all the products to sell into the data center.

CRN: But some partners who have a national or broad geographic focus are concerned that their PBM doesn't have a view to or an interest in HP opportunities outside of a specific geography and as a result they and HP are missing out on business.

Jones: They should have a view. Communications lines are open and good. We have daily and weekly meetings with our PBM managers. The leadership teams that control the ISS specialists or the BCS specialists, there is a whole host of communications tools that we use to make sure that they are in synch with the pipeline and what's going on within HP. I don't think there should be any gray areas in that. If there are, maybe some education needs to go on with our PBMs. But we are evolving in that model, and there is more work to do.

CRN: Mark Hurd for a long time has been concerned about HP channel partners who hollow out HP products and put in non-HP components. The channel wants to know what he means by this?

Jones: I can't speak for Mark. The concern is that we want it all. HP wants to continue to sell all of the products that we do everyday, and if there are ways to leverage our brand and technology with those partners, we want to do that. We want to continue to leverage every aspect of our business.

CRN: Is HP concerned about underhanded tactics such as black market components? If there is any clarification you can give, that would be nice.

Jones: When you have 140,000 partners worldwide, some may not do the right thing. As I mentioned early, you go through attrition because of certain things that happen, whether you are HP or IBM. We have a good auditing process with our partners. We are going to make sure that we have the right partners and the loyal partners in place.

NEXT: Jones On HP's Direct Accounts

CRN: Is HP reconsidering revising its Hard Deck list of accounts that it deals with on a direct basis?

Jones: The strategy for the channel only gets better as we look at the whole midmarket space. We have the top 1,300 accounts that we have been going after [direct] in the U.S. and really global 2,000 accounts with 1,300 in the U.S. We are going to continue to pursue that. We are looking at how we can grow share in those top 1,300 accounts. If you look at midmarket, that presents a tremendous opportunity. We want to continue enable our resellers to play in the midmarket space. We want to grow our midmarket business and we believe the channel is the vehicle for us to go do that.

CRN: Does that mean that there are accounts at the lower end of the 1300 that aren't being served well by HP direct that will be turned over to the channel?

Jones: We are just trying to get the channel more enabled in the midmarket. That includes enabling regional resellers more. If you look at the landscape, there are some large channel partners, but there are also a lot of regional resellers that we want to continue to help support and grow. Those are the guys that we feel we can get to leverage the midmarket more than we have done todayparticularly around ISS and PSG products.

CRN: I've heard about an HP account investment program in which HP will fund a channel sales person for six months to work onsite at some of these global 2,000 accounts that haven't been well served by HP direct in an effort to use solution providers to increase HP's share. Can you tell me more about this?

Jones: We have this AIP program that we called basically our 'no coverage initiative model.' It's where we don't have the coverage that we'd like today from the end user sales team. [We said] let's make sure we have coverage in these key end users and have channel partners go cover these accounts. This no coverage initiative is a jointly funded HP/partner effort to go after those accounts and that's what we are doing in the midmarket space. We targeted the midmarket and we've targeted a certain set of solution providers to help us go grow that share and we've probably been doing that for about six months.