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Michael Haley, CEO of Edge Solutions, an Alpharetta, Ga. HP partner, said he sees HP Networking products becoming a significant part of his business now that HP is upping the incentives for partners. Not only that, he sees Cisco gross margins suffering from HP's networking attack. "When you make 80 percent margins it's not fun to start thinking about a business model where you have to exist on 50 percent margins or less," he said. "Do the math."
William Jacques, vice president of Net Tech, a Kenilworth, N.J. HP patner, said he is planning to grow his networking business by 20 percent this year by focusing more on HP's networking products. In 25 years selling IT products, Jacques said, he has never seen a vendor put more financial muscle behind its partners to attack a market. "HP is going after the networking business with a vengeance," he said. "And it's very lucrative for us. I can make 15 percent on HP ProCurve New Business Opportunities."
Dan Schwab, Co-CEO of D&H Distributing, which partners with both HP and Cisco, said he is impressed by HP's strong channel commitment. "Clearly they are incredibly channel focused," he said. "That message comes through from the top to the bottom of the organization. They are able to engender very strong loyalty from their channel base." That's because HP partners have "confidence" in their channel partnership with HP, said Schwab.
Bob Venero, the president and CEO of Future Tech Enterprise, a Holbrook, N.Y. VAR 500 power who opted to attend the HP conference rather than the Cisco partner conference, says the risk/reward ratio for solution providers clearly favors HP rather than Cisco. He expects to grow his HP networking by a factor of five over the next year. His strategy is to get his customers comfortable with the edge ProCurve networking products and bring HP gradually into the core of the network.
One top solution provider CEO, who partners with both HP and Cisco, said that HP has partner loyalty that will result in partners backing HP rather than Cisco in the networking market. "The message is HP is loyal to their channel partners and they want partners to be loyal to them," he said. "And that loyalty is rewarded. It is a multi-vendor world but you have to pick who your strategic partners are. HP has been a big strategic partner with us for many years. They have been loyal to us. And we are loyal to them. HP has it all. They have the servers, the storage, the networking products and the channel. They have all the pieces of the puzzle."