Hewlett-Packard CEO Mark Hurd told Wall Street analysts last week that the company’s drive to realign partner pay with performance represents a “big piece of our opportunity to improve the company.”
Although Hurd refused to detail new channel metrics around partner compensation, he said Palo Alto, Calif.-based HP is focusing on how to properly deploy discounts, market development funds and promotion dollars to incent channel partners to sell a complete HP solution. “The bulk of it is how we deploy it, how we align it so that we incent the appropriate behavior out in the marketplace,” he said.
Hurd said the vendor is focused heavily on maximizing attach rates and sales of additional options or services.
“The mix both across the company as well as within product lines and attach [rates] are really big deals for us,” he said. “We are putting a lot of energy in areas where we see significant margin opportunity.”
Pete Busam, vice president and COO of Decisive Business Systems, an HP partner in Pennsauken, N.J., applauded the progress HP has made under Hurd.
“Partners have become more valuable under the HP strategy,” he said. “As Hurd continues to find ways operationally to take costs out of HP, he is putting it toward the partners and helping drive incremental and new business. That whole organization top to bottom is driving more business to partners that bring a complete HP solution to the table.”
Busam said he expects to see continued steady growth in his HP business. Hurd also reiterated last week his concerns about partners leading with the HP brand, ripping out HP parts and replacing them non-HP components. “We actually have partners that take our brand, which is one of the 12 or 13 leading brands in the world, lead with our brand and hollow out our product and put in other products and components,” he said. “That is not nearly as interesting to us as somebody that really puts a full Hewlett-Packard solution together, provided that fits for the customer.”
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