Hewlett-Packard has appointed a 24-year HP veteran to lead the charge on improving the company's pricing, promotions and programs aimed at getting more partners to sell the full HP product portfolio.
Mike Parrottino, who was previously vice president and general manager of Americas Channel Marketing/SMB, has been named to a new post -- vice president of enterprise group channels volume sales -- with the first order of business improving HP's ability to drive pricing, promotions and processes to increase "transactional" sales of the company's enterprise products.
That's an area where HP came up short in its second fiscal quarter ended April 30 with enterprise group sales down 10 percent to $6.8 billion compared with $7.5 billion in the year ago quarter in the wake of intense competition with Dell in the server market, Cisco in the networking market and EMC in the storage market.
Parrottino will report to Stephen DiFranco, vice president of HP's Enterprise Group Channel Organizations Americas.
DiFranco said the appointment is aimed in part at reinvigorating the HP charge to reward "franchise" partners -- those partners that sell the full HP product portfolio. "Mike [Parrottino] has the responsibility and authority to start to now take both our distributor/financial benefit programs and our PartnerOne [channel] programs and start to gear them to bring benefit when you go back into being a franchise reseller," said DiFranco in an interview with CRN. "For a lot of reasons we may have lost focus on that. We are going to bring that back."
DiFranco said it will be up to Parrottino to press the right levers to make sure those franchise partners are provided with aggressive incentives to sell the full HP portfolio. "We have not rewarded sufficiently or provided enough incentives to encourage VARs to buy across the portfolio," he said. "We should do that because it is the right thing to do."
The first order of business, however, will be focused on making sure the HP "engine" is "tuned" to drive more transactional sales of HP enterprise products including servers, networking and storage against tough competition from the likes of Dell, EMC and Cisco. In the server market, for example, HP lost share in the first quarter to Dell, according to market researcher Gartner. HP's storage business, meanwhile, was down 13 percent in its fiscal second quarter ended April 30 and its networking business was up just 1 percent.
HP has already made changes aimed at making sure the company is more price competitive in servers. For his part, Parrottino, who has already been meeting with HP's top distributors, pledged that HP will "become more aggressive and focused on some of the volume aspects of this [enterprise] business."
In fact, Parrottino said he is moving quickly to ensure HP has the right product "combinations" and incentives to assure that HP partners are driving a full HP solution rather than a "singular conversation around a single product.
"The fact remains that HP has the deepest product portfolio, services portfolio, software portfolio in the industry," added Parrottino in an interview with CRN. "We have got the depth and breadth to offer a world class experience both to our partners as well as our customers." That means looking closely at profitability for HP partners, he said.
NEXT: HP Partner Sees More Pressure On Dell, CiscoChris Case, president and CEO of Sequel Data Systems, an HP enterprise partner headquartered in Austin, Texas, that sells the full HP product portfolio, said he expects the changes being made by HP's Parrottino to step up the pressure on Dell in the server business and Cisco in the networking market.
"When competing against Dell and Cisco it gets very price competitive," said Case. "HP needs to be price competitive, and we don't want to be penalized for that. That's the reality of the situation. Since we are focused on HP, we don't have the luxury of flipping and going to another vendor. I know other VARs have picked up other server and networking partners because they can make more money on those and they decided to go in that direction. We decided to stick with HP. It's refreshing to hear that they are going back to rewarding partners that sell the full portfolio."
Case said Parrottino's experience in the channel and within HP will be critical in getting the pricing, promotions and programs to drive stepped up HP enterprise sales. "He [Parrottino] has been around long enough to know what needs to be done," said Case.
Adam Shaffer, senior vice president of marketing for PCM, formerly PC Mall, a $1.5 billion IT solutions and services company headquartered in El Segundo, Calif., agreed. Parrottino, he said, is an "assertive and aggressive player. It can only benefit HP."
Shaffer also applauded HP's push to get partners to sell the full HP product portfolio. "We agree," he said. "That is our business to sell the full portfolio. You need a power player to push these things through so they don't take forever. Since he [Parrottino] knows how to navigate that company and he is well respected there, he will help make things happen quickly."
Shaffer chalked up the Parrottino appointment as just one more aggressive move by HP CEO Meg Whitman and team to "take action to be faster to market, faster to make decisions, more efficient and simple. Everything they are doing is about trying to simplify life for the channel."
The full portfolio solutions push harkens back to HP's channel strategy three years ago when the company reported that franchise partners deriving at least 70 percent of their sales from HP products were growing at a 50 percent clip compared with 18 percent for those not bringing a full HP solution to customers.
As to just what kind of challenges Parrottino will face in his new job, HP's DiFranco said the channel veteran has access to the business units, HP's robust supply chain planning organization and the company's competitive analysis organization to assure that he can get the job done. "We have made sure we have given him the assets he needs to be successful," he said. "We are going to become much better and much more agile and much more efficient in this transactional [enterprise volume product] space."
Once that is done, DiFranco said, the next order of business will be getting partners to "optimize" their product mix to sell the full HP portfolio. "What we have to do first is really get that engine tuned for what we do every day," he said. "Before we get into the concept of franchise resellers and selling across the portfolio, we have to get the engine right. That is the piece we want to focus on first."
So just how big a job does Parrottino now have within HP? "It is a huge task so I have selected the person I trust the most to get it done," said DiFranco.
PUBLISH MAY 30, 2013