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New HP Channel Incentives Target Aggressive Growth, Cisco Displacement In Networking Deals

By Chad Berndtson
December 08, 2011    2:00 PM ET

Page 2 of 3

HP launched Catalyst for Change -- a program designed to reward partners for displacing Cisco switching equipment in networking deals -- a year ago, and according to Ahmad saw strong take-up from HP partners from the get-go. HP estimates that more than $9 billion of legacy Cisco gear is up for potential replacement at the moment.

"We know that customers are in a position where tying things to one vendor might not be in their best interest," Ahmad said. "So we've helped to open up the debate and conversation."

HP has renewed Catalyst for Change for calendar year 2012, and while the compensation terms will remain the same -- an additional 20 percent back-end rebate on top of the discount partners would already make specific to their HP partnering tier -- the scope of the program has widened. HP will now reward partners not only for replacing Cisco, but also for Juniper, Brocade and other data networking competitors' gear, as well as older gear from HP itself. Customer upgrades from older ProCurve gear, for example, are fairly common, executives said.

"There are customers that may have bought configured stackable switches in the past and want to now go to the matrix stacking, so that's a good opportunity to use the program," Banic said. "Or maybe it's a case where they're moving from Gigabit to 10 Gigabit top-of-rack switches for their data center."

HP has also eliminated the deal size threshold for Catalyst for Change deals. In its first year, the customer deal needed to be over $100,000 to be eligible for the Catalyst discount. But HP will now evaluate deals on a case-by-case basis, Ahmad said, and doesn't have a specific threshold by which a deal is approved or not.

HP Financial Servcies is also offering U.S.-based HP partners the ability to lease HP Networking hardware for 1.5 percent of list price, per month, for 18 months. Lease terms can be extended, or the equipment purchased outright, at the end of that period.

NEXT: HP Networking's Partner Appeal



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