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Will The New HP's Named Accounts Strategy Turn Out To be Full Of Holes?

This is going to be one of those "we have to wait and see" columns.

Hewlett-Packard finally closed its deal to gobble up Compaq last week and quickly revealed the product road map for the combined company. This was an important step, no doubt, and one that certainly clarifies what solution providers can expect in terms of the HP product lineup. We also now know the identities and responsibilities of the key players within the new HP organization.

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ROBERT FALETRA Can be reached at (516) 562-7812 or via e-mail at rfaletra@cmp.com.

What we don't know is whether Carly Fiorina's statement earlier this year that HP's Hard Deck program would survive the merger will, in fact, prove to be true.

As you will recall, the former HP drew a very hard line in the sand with its Hard Deck policies, designating 400 named accounts in which HP would openly compete with the channel using its direct-sales force. The program was well thought out, and was implemented and communicated clearly. In fact, it came about after a very honest statement by Fiorina to the channel and Wall Street analysts that acknowledged HP had been walking into accounts where it didn't belong.

Compaq, of course, had a similar program, but it was much more vague and harder to grasp. In fact, the program was rather spongy, given that it included some 900 named accounts and there were no hard-and-fast rules as to whether Compaq would approach those not on the list. I've often joked that SpongeBob SquarePants, the cartoon character, designed Compaq's named accounts program in his own image: soft, with lots of holes.

So my question for the combined company is, where do we stand with named accounts? HP can't answer that question yet, and executives say the answer might not come for 90 days.

Mind you, HP has said that 1,000 employees worked more than 1 million hours on the integration planning before last week's merger even took place. I guess the question of whether or not it made sense to continue with a very successful and critical piece of HP's channel program never came up.

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>> 'I've often joked that SpongeBob SquarePants, the cartoon character, designed Compaq's named accounts program in his own image: soft, with lots of holes.'

Don't get me wrong. In many ways I'm amazed by the advance planning that went into this integration and the number of decisions announced last Tuesday when the merger became official. If Fiorina can maintain that momentum, she will have avoided one of the major reasons that mergers of this magnitude typically fail: inertia. But HP's channel philosophy is unclear right now, and the company's inability to articulate details about Hard Deck's future is just one indication.

I look at it this way: HP has excellent momentum behind this merger right now. The integration team has done a better job of preparing up front for the transition than any I have witnessed, bar none. But going into this merger, HP also had momentum behind its channel, largely tied to the success of the Hard Deck program and the company's willingness to say exactly where it would and would not play directly.

Whether or not Hard Deck emerges in its current form, it shouldn't take 90 days to decide and communicate the policy. The longer it takes for HP to come clean on where it is headed with this program, the better the odds that the company is gearing up for a major shift. There is no doubt that the program is under review at this point.

The channel is used to change, something it has encountered since the beginnings of this industry. What solution providers don't like to deal with, however, is uncertainty. Unfortunately, this merger has meant uncertainty for months. Another 90 days is an eternity.

So what's it going to be, Carly,Hard Deck or SpongeBob?

Make something happen. I can be reached at (516) 562-7812 or via e-mail at rfaletra@cmp.com.

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