Hewlett-Packard solution providers welcomed the vendor's decision to move its Technology Services business to be a part of the company's huge Enterprise Servers, Storage and Networking (ESSN) division, calling it a chance to better align HP's maintenance services with its hardware sales.
Leo Apotheker, HP president and CEO, on Tuesday unveiled the plan to place Technology Services under ESSN, calling it part of a plan to transform the company with a better focus on higher-margin services.
Technology Services, along with the software group, was one of HP's two "problem children" as far as the channel was concerned, said one solution provider who asked to remain anonymous.
The problem with Technology Services, which handles break-fix services and maintenance renewals, is that its agenda has always conflicted with what HP and its partners were doing on the hardware side, the solution provider said.
"For example, if I go to HP and say there are a bunch of HP customers who want to either renew their maintenance contracts or replace their hardware with something cheaper and faster, Technology Services would not want us to replace the hardware," the solution provider said. "They're biased to maintenance renewals, even if we would tell them that IBM or Dell was looking to replace the hardware."
Five years ago, HP told its channel partners to focus less on enterprise accounts and go develop services and other value-adds for SMB and midrange accounts, the solution provider said.
"Resellers learned to build services in that space, but Technology Services sees us as competing with them," the solution provider said. "So by aligning Technology Services more with ESSN, we'll be better able as a team to discuss services with our customers."
Dhruv Gulati, executive vice president of Lilien Systems, a Larkspur, Calif.-based solution provider and long-term HP partner, saw the Technology Services reorganization as basically a positive move for channel partners.
The move is primarily an HP internal reorganization, but it will benefit solution providers by bringing the services more in line with product sales, Gulati said.
"If you are an optimist, you can imagine fewer surprises, fewer channel conflicts," he said. "If you are a pessimist, you might fear a big push on the part of HP's sales to discourage channel sales. I'm not as concerned about that because if we are doing our job right, we have more of an affinity with our customers than any manufacturer does."
The reorganization is exciting for the channel, said John Convery, executive vice president of vendor relations and marketing at Denali Advanced Integration, a Redmond, Wash.-based solution provider and long-term HP partner.
Denali has made major investments in its services business, and has been leading its sales calls with services which then drag hardware into deals, Convery said.
"We have been challenged over the years about how we deliver our services when they overlap with HP's services," he said. "I can see HP coming in and leveraging the gaps between what HP offers and its partners offer. I think HP is putting a lot of wood behind the arrow. That's good. But not for every partner. It's good only for those who invest in services."
The Technology Services move to ESSN should also help distributors be better able to work with solution providers, Convery said.
"You'll see Avnet, Arrow, Tech Data, Ingram Micro, and the others all invest more in services, including in providing more tools and complete statements of work," he said. "This is important for us. We can't hire services people quickly enough."