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HP Set To Go Deeper With Top Partners

Hewlett-Packard President and CEO Mark Hurd sent his first public message to solution partners last week: Loyalty counts.

In the midst of a major restructuring that will see HP slash some 14,500 positions, or 10 percent of its workforce, and dissolve its Customer Solutions Group sales organization, Hurd said the vendor intends to “double down” on those partners who sell a complete HP solution.

“We have some number of partners that would lead with HP as a product, but underneath that lead with HP is a content-less HP offering,” he said. “It is basically lead with HP with a brand and then a series of non HP products that attach to that solution. That is not an interesting partner relationship for us.” Instead, HP will put more energy and support behind those partners who sell an entire HP solution, Hurd said.

Todd Bradley, executive vice president of HP&'s Personal Systems Group, said that within the context of working more closely with those partners most loyal to HP, the company still plans to work with partners that offer a multivendor solution.

“It is our stance that we&'ll work with partners who drive the most volume and profit margin for HP,” he said. “Someone who is multivendor, if they are doing it in that broad context, we will continue to work with them.” Bradley also said HP has no plans to reduce its channel partners ranks, including distributors, in North America. “We have no imminent plan to do that.”

To back up its strategy to reward loyalty, HP channel executives last week said they are launching a new plan, slated to go into effect Nov. 1, to integrate key HP enterprise solution providers into its Technology Solutions Group&'s end-user sales force.

HP currently is evaluating partners who sell its Alpha and HP-UX servers and enterprise-class storage and then will map designated partners into the TSG sales organizations sales&' plan, said Jim McDonnell, senior vice president and general manager, HP Solution Partners Organization worldwide.

“These guys [enterprise partners] will be responsible for selling with [the TSG sales force] and in conjunction with their sales plan as opposed to today where they are very independent. It will get people linked together so that everyone is on the same page.”

The tighter linkage comes as HP moves the sales staff from its umbrella Customer Solutions Group organization into three business units: Technology Solutions Group (enterprise), Personal Systems (SMB) and Imaging and Printing (consumer).

Rich Baldwin, president and CEO of Nth Generation, an HP enterprise solution provider in San Diego, said the restructuring shows that HP wants to go wide and deep with its accounts. He welcomes the plan to do more with partners who are focused on HP. “They [enterprise partners] have the training and certification,” he said. “Hurd wants to reward such partners. It&'s great for us.”

The move seems timely in that not all partners are satisfied with the current sales engagement model.

One HP solution provider, who requested anonymity, said sales engagements with HP in the enterprise space are often chaotic. “There is no clear [sales] engagement model,” the HP enterprise partner said. “It is a mess. This is going to take some time to work out.” The partner added that HP direct often calls on the same enterprise accounts as partners, resulting in conflicts.

John Thompson, vice president and general manager, HP Solution Partners Organization, Americas, said the new strategy would involve less than 100 HP partners in the United States. “This will further enable partners by having the decision-making as close to the street as possible,” he said.

HP channel executives would not go into detail on any upcoming changes for SMB sales engagements. But one HP partner, who requested anonymity, said HP aims to build tighter and deeper relationships with a select group of VARs serving SMB accounts. The plan is for HP to do more account planning and mapping with select SMB partners in conjunction with HP&'s direct telemarketing sales reps in Colorado Springs, Colo.

But other partners said lingering conflicts with HP&'s telesales center muddies any effort to strengthen relationships with SMB VARs.

JOSEPH F. KOVAR and SCOTT CAMPBELL contributed to this story.

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