HP Overhauls PartnerOne, Aggressively Recruiting New Partners

Hewlett-Packard Tuesday rolled out an overhaul of its PartnerOne channel program backed up by a partner recruitment effort that could add more than 3,000 new solution providers to the fold.

The new PartnerOne initiatives were unveiled at the company's Global Partner Conference in Las Vegas this week where 2,000 of the $120 billion company's partners -- representing more than $35 billion in sales -- will gather to gauge HP's channel commitment.

At the heart of the channel charge is what HP is calling a simplified "pay for performance" PartnerOne program backed up by a recruitment initiative. HP, in fact, is looking to add 2,500 new partners in its Enterprise Group, 500 new partners in its Software Group and 200 new cloud service providers.

"We are recruiting like crazy," said Doug Oathout, vice president, channel and alliance marketing, for the Enterprise Group, in an interview with CRN. "We are out there trying to get value-added partners in storage, networking and servers. We are out there trying to get software partners."

[Related: Is It Too Late For HP's Whitman To Mend Channel Fences? ]

The recruitment offensive comes with HP doubling down on its back-end rebate program, allowing partners to qualify for those incentives from the very first sale. That's an important change, as 40 percent to 50 percent of partners did not qualify for that back-end rebate last year because they failed to meet their HP sales quotas. Under the old program, partners did not qualify for those rebates until they hit 80 percent of their sales target.

"We're really excited about the opportunity with the new program," said one top executive at an HP enterprise partner, who asked not to be named. "This would have been a year where we might not have seen as much of a back-end bump because we had such a great year in 2012," said the partner, which posted nearly 40 percent growth in its HP business last year.

The executive said HP has made the PartnerOne program much more predictable, with less time having to be spent trying to determine channel compensation. "I know what I am going to earn and if I overachieve I can earn more," he said. "That predictability is the secret sauce. We are very bullish on HP right now. They are doing a lot of the right things, from Meg Whitman's positive channel messaging to new rules of engagement."

HP paid out $2.5 billion in back-end rebates to roughly 160,000 partners in the last fiscal year and plans to exceed that dollar amount this year, said Oathout. He said the program will allow the average partner to earn 5 percent to 10 percent more in total back-end rebates.

NEXT: HP Eliminates Rebate Caps

Besides paying from dollar one, the new back-end rebate program eliminates restrictive caps on how much partners can earn if they exceed sales quotas, opening the door to what Oathout called "virtually unlimited additional income" and a big differentiator between HP and the competition.

Previously, depending on the region, partners were capped at how much they could make once they hit 300 percent to 500 percent sales growth targets.

In addition, the new program rewards partners that invest in higher specialist HP certifications with increased rebates. "The more you learn, the more you earn," said Oathout.

Oathout promised that partners that increase their HP certifications and sell more of the HP product line will earn more than they would selling the siloed offerings from competitors.

"If you sell more of our product line, you can earn more money with us," he said. "That's what we want. We want our partners to sell the full [HP] portfolio."

Another big differentiator between HP and its rivals, said Oathout, is that HP's channel program is "open," aimed at bringing a new generation of cloud services providers into the fold. That, said Oathout, is in contrast to competitors that go to market with a "closed" channel offering with "revenue thresholds" and restrictive requirements.

"There is a whole new set of partners coming to market, and we want to be open," said Oathout. "We want to be able to talk to them in the same way we talk to our other channel partners."

The partner recruitment effort, according to Oathout, comes with the IT market growing and shifting to a new set of solutions centered around cloud computing, big data and security, which HP plans to exploit with new offerings over the next year.

That drive around big data and the cloud already is showing up in PartnerOne with a new HP Vertica Analytics Platform available under PartnerOne. In addition, HP is launching a new pilot Autonomy partner program in a bid to get partners to sell HP Autonomy products and services.

Collectively, the changes will make it easier for all partners to succeed with HP, Oathout said.

"We see it driving better account planning and better execution," he said. "It is really about the partner knowing what they are going to make so we can do better planning with them. What we really want is to be joined at the hip with our partners and joint customers making sure we are driving business together."

PUBLISHED FEB. 19, 2013