HP ESSN Sales Kickoff Gives HP Employees, VARs Unified Focus

Hewlett-Packard used its annual Enterprise Server Storage and Networking sales kickoff to slam the door on its recent rocky past and get both its employees and partners on the same path towards working together to grow its business.

At the event, HP's top executives from CEO Meg Whitman on down emphasized to the company's employees the importance of partnering to grow the business after a string of questionable decisions over the past year -- including the indecision about the fate of its Personal Systems Group -- brought doubt about the company's focus into the minds of customers and partners.

The week-long ESSN sales kickoff event, held in Las Vegas the week before Thanksgiving, ran in conjunction with HP's own internal global sales kickoff. That global event was not open to solution providers.

The ESSN sales kickoff brought together about 4,000 North American sales and support personnel of HP's ESSN division along with 300-plus solution providers to discuss new sales programs and dismiss lingering concerns about the past year.

Frank Rauch, vice president of ESSN channel sales at HP, confirmed solution provider reports that the vendor extended what had been a beta program that offers extra discounts for selling complete solutions.

That program provides solution providers with an extra 3 percent to 5 percent discount, depending on how much ESSN products or HP technology services is sold as part of a solution, Rauch said.

"So sell an HP CloudSystem with 3PAR storage or with HP switches or servers," he said. "Sell two, and get an extra 3 percent discount. Sell three, and get five percent."

Kevin Garrison, vice president of sales at Lilien Systems, a Larkspur, Calif.-based solution provider and HP partner, said that HP also discussed an informal program it called 3x3x3 (three-by-three-by-three).

With that program, HP said that if a solution provider brings three deals to HP, and HP brings three deals to the partner, they can work together to close $3 million in new business.

"It may not be $3 million in new business, but the fact that HP is talking that way is very positive," Garrison said. "Currently, when HP brings leads, they are typically from someone looking to get a $50 Amex card for talking to us. Those aren't customers that we might normally work with. But now HP is talking about bringing in real leads."

HP also gave its partners a heads-up on a number of new programs that were subsequently release publicly including HP's Project 'Odyssey' strategy for integrating x86 server blades into its mission-critical Integrity Superdome 2 Itanium-based servers, new cloud computing certifications as part of HP's ExpertONE Converged Infrastructure certification portfolio; and the news which HP announced this week that it was named to the midrange storage "Magic Quadrant" by analyst firm Gartner.

Getting HP storage into the Gartner Magic Quadrant was a significant event for partners, Garrison said.

"HP has been taking a lot of body blows for its storage business," he said. "Now Gartner has moved HP to the top in terms of storage vendor vision, and almost equal with EMC and NetApp on execution. The Gartner Magic Quadrant has a big influence on the market, especially with enterprise customers who are also Gartner clients. HP has had difficulties with its storage strategy. So this is a big move for HP."

Next: HP Says It Has Moved Past Recent Unpopular Strategy Changes

HP used the ESSN sales kickoff to address a number of decisions it made over the past year, such as first announcing and then canceling plans to consider selling its Personal Systems Group (PSG), and was frank in assessing their impacts, solution providers said.

Garrison said he saw HP executives definitely aligned with Whitman's new course after the previous CEOs Mark Hurd and Leo Apotheker were fired.

HP at the ESSN event was open and honest about the blows it has been taking over the last year, which is a big change for the company, he said. "Before, HP people told us, oh, no, there's no problem," he said.

Garrison said it was also surprising to see how HP was distancing itself from some of its pre-Whitman action.

"I was surprised how much they threw Hurd and Leo under the bus," he said. "A lot of HP people said they were not happy with Hurd's lack of investment in the company, or the confusion that was seen under Leo."

HP also addressed Apotheker's controversial decision to acquire U.K.-based enterprise unstructured data management software developer Autonomy for $10 billion-plus.

Rich Baldwin, CIO and chief strategy officer at Nth Generation Computing, a San Diego-based solution provider and long-term HP partner, said that HP's presentation of Autonomy at the event convinced him to give it a close look, especially given the potential hardware and services "drag" it offers partners.

"I'm seeing the light on the Autonomy acquisition," he said. "It could have a broad appeal to our customers, and a strong drag on other parts of our business. HP told us that the infrastructure drag is three to five times the cost of the software, while the services drag is two to four times. That's pretty significant. Unstructured data is a big growth driver."

HP under Whitman also seems to have addressed serious morale issues, solution providers said.

Baldwin said he ran into several long-term HP people at the event who said they had been thinking of leaving the company, but who now are staying. "HP seems to have figured out its morale issues," he said.

John Convery, executive vice president of vendor relations and marketing at Denali Advanced Integration, a Redmond, Wash.-based solution provider and HP partner, found the morale of HP's sales teams extremely high at the event.

"Everybody on the HP side and the partner side were jazzed about new sales compensation plans aimed at driving sales across all the product lines," Convery said. "It's no longer direct sales vs. indirect sales. Everybody is working together."

Several solution providers said HP encouraged its own personnel and its partners to be proud of working with HP and to add some "swagger" to their HP presentations.

Rauch said HP has seen several changes in the last couple years, and that Seidl used part of his presentation to rebuild confidence in the company.

"Not that it was bad," Rauch said. "But he told us to go out, not arrogantly, but with confidence to the market."

HP's decision to invite over 300 channel partners to what for other vendors would be strictly internal and secret meetings about sales strategies was by itself sweet news to solution providers who attended the kickoff.

Baldwin said the event drove home the idea that HP's strategy is to engage the channel.

"It was a really positive experience," he said. "I came back motivated and excited. I spent the last few days explaining everything we discussed to my sales team. And I heard from HP people that they want to come in and do more account mapping with us. It's good to see how they want to get involved."

HP Provides Unprecedented Executive Access To Partner

Garrison said that HP has never been so open with so many partners as it was this year.

"Before, not many partners went to the event unless they wanted to spend $25,000 on something like lanyards to sponsor the event," he said.

For some solution providers, the kickoff was an opportunity to actually sponsor part of the event as a way to get better exposure to the HP personnel who can make a difference in the relationship between the vendor and channel partners.

Convery said Denali Advanced Integration sponsored a party at La Cave at the Wynn hotel.

"We expected 100 ESSN sales people to come," Convery said. "We ended up with over 200. We were very pleased with it."

Even for partners who did not sponsor specific events, attendance was fairly expensive. One HP solution provider, speaking anonymously, said the base admission charge to the conference was $4,000.

Rauch said it was a unique way to hold a sales kickoff.

"Lots of vendors have partner conferences," he said. "But there are very few companies that tell its partners, 'We want you aligned with us from day one. We want to make sure you get the same program information as HP people get.'"

HP had a handful of solution providers at last year's ESSN sales kickoff, Rauch said. "But this year, it was much larger than last year," he said.

Access to some of HP's top executives such as Dave Donatelli, executive vice president and general manager for the company's ESSN business, and Randy Seidl, senior vice president for Americas ESSN business, was an important draw to partners.

"The hospitality suites were open from 6:00 pm to 1:00 am every night," Baldwin said. "That made the HP execs very accessible to us. I talked to Donatelli and Seidl several times that week."

While Whitman gave a live keynote address during the HP global sales kickoff, she did not do so at the ESSN sales kickoff.

However, in a video message shown at the ESSN sales kickoff, a copy of which HP provided to CRN, Whitman thanked solution providers for their partnership with and support of HP.

"I know that we've been through some tough times, but together, we are the most powerful channel in the industry," Whitman said. "HP is committed to working with you, and we see a lot of opportunity ahead."

Whitman said partners are the backbone for HP's customers. "With a portfolio that streches from the desktop to the data center, and customers that span every market segment and geography, we absolutely need our partners to win," she said. "You are HP's advocates in your markets and with your customers. And we are eager to engage with you, understand more about your needs, and see how we can help each others' businesses grow."

Garrison, however, actually did get in to see Whitman live during the kickoff event.

"I accidently entered the global account manager meeting with Meg," he said. "She should have had partners at that meeting. She was saying the right things."

With the new programs HP introduced at the ESSN sales kickoff, it was easy to feel that now is a good time to be an HP partner, Baldwin said.

"I've seen the pendulum swing back and forth with HP," he said. "But it was great seeing Donatelli and Seidl on stage and hearing them engage channel partners in front of thousands of HP sales reps."