HP's Rauch: Quarterly Channel Sales Expectations 'Blown Away'
"When we were sitting in meetings in July or August last year we were thinking 12 percent growth was an aggressive channel plan [for HP's fiscal 2010]. We're in a quiet period now until the end of April but I can tell you that our first quarter channel growth blew that plan away," Rauch told a crowd of about 400 VARs at Ingram Micro's VentureTech Spring Invitational conference in Hollywood, Fla., on Thursday.
HP ships 3 PCs every second, two printers every second and a server every nine seconds, according to Rauch, but there's still significant opportunity for the vendor in the small and midsize business markets. "We cover about $800 billion of the $1.3 trillion total addressable market. If we could cover that other $500 billion, that would mean about a $50 billion opportunity for us and for you in the room. That would all be channel opportunity," Rauch said.
HP has been aggressive in recent months looking for VARs to sell additional HP products to their current portfolio, a message that Rauch also conveyed to the VTN members.
"Not to take anything away from VMware or Cisco, but we have it all together," Rauch said. "We kept the PC business. We kept the printer business. Five years ago people asked why not get out of the PC business. Why? It's a $150 billion market. It allows us to have a $70 billion supply chain."
Meanwhile, VARs still have a tremendous opportunity to implement virtualization solutions into the 97 percent of end users that don't utilize that technology, Rauch said.
"The requirements to building a converged infrastructure are being virtualized, resilient, orchestrated, optimized and modular. Take the 97 percent of physical assets and virtualize them. Make them resilient. Make them survive anything that comes at us," he said. "We don't know when [a recession like] 2009 is going to happen again, or some other event. You need to make the data center modular to adapt to what comes at us."
Just over two years ago, HP's server business was about half direct, half indirect, Rauch said. "Now 54 percent is going through the channel, and I guarantee that it will be 60 percent to 65 percent over the next few quarters."