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HP CEO Meg Whitman Tuesday kicked off the company's Global Partner Conference with a pledge that partners will make more money selling HP than competitive offerings as the computer giant doubles down on simplicity and profitability for partners.
"Our objective is for us to be the most profitable partner that you do business with," said Whitman addressing several thousand partners in Las Vegas, who broke out in loud applause numerous times in response to changes HP is making that will dramatically increase partner profitability this year. "We are going to reduce the number of programs, and we will put more focus on making our compensation structure predictable. Let me be clear. It is pretty simple. The more you sell, the more you'll earn. That is how we want to run our compensation programs."
Whitman has driven major changes in the $120 billion IT giant's PartnerOne compensation model that allows partners to qualify for lucrative backend rebate dollars from the very first sale. Under the old program, partners did not qualify for those rebates until they hit 80 percent of their HP sales quota.
Whitman, for her part, says those sales quotas made the HP partner compensation model too complex and unpredictable. With the new simplified program, she said, "growth will come naturally because you will have confidence in serving your customers, and we won't necessarily have to have growth objectives that trigger payouts that are a big source of negotiation and frankly have been a big dissatisfier."
Under the old program, 40 percent to 50 percent of partners did not qualify for backend rebates because they failed to meet HP sales quota targets, according to HP.
"You make choices everyday about who you want to do business with," said Whitman. "If we are simple to do business with, you understand how you get paid, you make more money with us than any of our competitors then you are going to do more business with us. I think over time we have complicated this more than we should have. I think the formula is pretty simple: make it easy to do business with us. You need to make more money with us than any of our competitors. You need to understand how the programs work, and we [can't] change them all the time."
Whitman also received thunderous applause when she laid out a new rules of engagement policy that prevents HP direct sales reps from taking an account from a partner. "Importantly -- and I want you to hear this from me -- we now have a very clear policy about taking business away from our channel and going direct," she said. "My message to you is this simply will not be tolerated. Everyone in the HP organization is crystal clear on the behavior we expect. And I am holding myself and our senior executives accountable for behavior that is befitting of HP and recognizes the value you have brought to this company over many years."
Many solution providers attending the conference were looking for signs of HP's channel commitment in the wake of a difficult year partnering with the vendor. A number of partners said HP had become less strategic to their businesses in 2012, forcing them to shift resources to other vendors.
HP partners said they see the far-reaching changes in HP's partner model as a sign of a reinvigorated channel charge that will result in them committing more sales and technical resources to the computer giant.