Page 3 of 7
Your predecessor added a lot of direct salespeople. Will you continue doing that?
We will continue doing that. But they are targeted to a very specific segment of the market. And by the way, that is not where our channel partners [play].
You re-instituted employee pay increases. Talk about the direct sales compensation, the channel compensation and how they are aligned. Will you make some changes there in terms of go to market?
That is a great question. But to really have a detailed discussion of this you need a lot of granularity. What I did when I came to HP, I actually felt it was really important to give people that raise that they were expecting, if only because, I believe in performance and pay for performance in a performance-driven company. Now we had a pretty good year. So there was no reason [not to give employees raises]. On the contrary. If we really believe in performance, then we should walk the talk and give people pay for performance which is exactly what we did.
The compensation of the direct sales force is basically geared towards incentivizing our direct sales force to sell the entire portfolio of HP ranging from outsourcing services to converged infrastructure, PCs, printers and managed print services and what have you. It is always done in such a way that the pricing structure of how they get compensated on this doesn't discriminate against the channel. So at the end of the day, it is very hard to align compensation for one or the other because they really don't sell the same stuff. And they shouldn't actually be measured in the same way. If I am a fulfillment partner and I ship printers or supplies to an HP large account I will probably be compensated differently than the large account manager of that account by definition, and that is perfectly logical. And that is how we drive it. But we do make sure that there is no disadvantage when it comes to pricing and anything else to our channel partners.
Talk about the services account engagement strategy. Partners want to know where they are going to play and where the HP Services organization is going to play. Can you provide some guidance there?
We had some really deep conversations with some partners on that topic. But what is for sure is that I made it very clear to our partners that in the world of tomorrow, the cloud world, there will be a really great opportunity for our channel partners, provided that they actually adjust a little bit of their business model as well. If they have an on-premise business model that is only based on servicing yesterday's world, they are going to have a problem. Not because I want to cause them a problem, but because the market is going to move away from them.
I am more than happy to make sure that they have a great opportunity in that world as well. But as I said to our channel partners: If we discuss cloud, if we all believe in cloud, if we see cloud as one of the main market-moving things in the future, well then you are going to have to adjust your business model to the cloud as well.