HP Mounts 9,000 Midmarket Account Mapping Offensive With Partners

HP has embarked on an ambitious account planning and mapping strategy aimed at working hand-in-hand with partners to win business together in what it has tagged as 9,000 U.S. SMB, emerging growth, midmarket accounts.

The new midmarket account strategy marks what may well be the biggest sales changes in the history of the company aimed at getting HP partners, HP sales reps and HP's top executive team all working together, hand-in-hand to sell more of HP's broad and deep enterprise product line from servers to storage to networking products into what many view as the most profitable segment of the IT market.

The detailed account planning and mapping means significant changes for how both partners and direct sales reps work in midmarket accounts to win business. The long and short of it is HP is going to war with a new sales model to win net new business with an arsenal of sales tools aimed at getting HP and its go-to partners in front of those 9,000 midmarket, emerging growth customers.

The U.S. SMB Enterprise Business Led sales map looks like something out of a war room with needles pinpointing the 9,000 major US accounts. HP has done detailed account mapping focused on size of the IT budgets in those 9,000 accounts with 6,581 of the accounts carrying an estimated IT budget of $300,000 or less and 2,500 of the accounts with carrying an estimated IT budget of $1 million or less.

HP's top enterprise partners have combined with HP's sales managers to do the detailed account profiling and mapping and those partners have been assigned dozens and even hundreds of accounts all over the U.S.

HP's stated goal with the sales changes is to grow at least two times the market growth rate. That means taking share from the likes of Dell, Cisco, Oracle/Sun and IBM by leveraging HP's $115 billion heft as the world's largest supplier of computer products. HP is also taking advantage of a new, more aggressive, nimble and charged up sales team that is willing to make snap pricing decisions on the fly that would have been unimaginable years ago. "We are all about displacing the competition," says one senior HP sales executive. "We are not playing nice anymore. We are taking the game to them."

Taking the game to the competition also means "raising the bar" and turning up the heat on both HP's sales teams and partner's sales teams to win more business. Ultimately, HP's channel goal is to establish and drive what is calls a "focused and accountable" set of ESSN partners dedicated to selling HP's full converged infrastructure product portfolio in those 9,000 accounts.

The strategy already has partners working side-by-side with HP's inside and direct sales teams to team together with an all out sales blitz aimed at getting more wins in those 9,000 accounts. For example, HP is now inviting partners into its Conway, Ark. inside sales operation with a 300 strong HP inside sales team doing call blitzes to get sales appointments for HP partners.

That cold calling is just one example of a combined sales effort aimed at getting the business. HP is also stepping up to offer sales support from top HP executives, including HP CEO Mark Hurd, to win deals and combine with partners to get unsolicited sales proposals to those 9,000 accounts.

"Integrated is greater than the sum" is the new HP mantra, according to HP Vice President, Emerging Growth Accounts, Enterprise Business Sales Kevin Hooper. He says all of HPs direct and inside sales reps, partner reps and enterprise partners are for the first time all aligned under the same sales model.

"We need to be integrated as a team, the inside sales team, the outside sales team and our partners that are going to solve the problems for our customers," says Hooper.

"It's not enough for us all to show up in the same room," he says. "We have got to get paid together the same way. We have got to win together the same way. We have got to be managed together the same way." Hooper says HP's various direct sales teams that are working with partners have a "channel positive compensation model" that allows those sales reps to "retire more of their sales quota" if an emerging market account goes through a partner.

Next: A Dramatic Change In How HP Views Its Partners

Frank Rauch, vice president of ESSN Channel sales, says the new sales alignment represents a dramatic change in how HP views its partners. Using a football analogy, Rauch says in the past it felt like HP was stiff-arming its partners. Now, he said, HP is on the same playing field using the same playbook with its partners.

Hooper, who is on the road pitching the account engagement model to partners, sees the new account planning and mapping strategy as a turning point for both HP and its partners to dramatically increase sales and profits in 2010.

"My entire outside sales team will not show up without you," he recently told the sales reps at NWN Corp., one of HP's fastest growing partners, during the NWN national sales conference. "We want to engage with you."

Fast growing partners like NWN say they expect to see a significant increase in net new accounts leading to dramatic gains in sales and profits in their HP business.

Mont Phelps, the CEO of NWN Corp., which is headquartered in Waltham, Mass., has ambitions to grow his business organically by $50 million this year to a "quarter of a billion dollars in sales" with a "good chunk of that going to HP."

"This is not only different," he says of the new HP go to market model. "It is better. When you are working together you are a lot more efficient and effective than when you are not. The problem (for VARs) has been and continues to be (sales) alignment (with vendors). This just takes a lot of the drama and inefficiencies out of the sales process.

"What we do is we work together in a committed fashion with the vendor, win or lose," Phelps says. "Either vendors or VARs that aren't willing to commit to a program and a relationship to win together or lose together are going to have trouble."

Phelps isn't the only partner pumped up about the new emerging growth, midmarket account engagement model. Some HP partners say they are staking their future on the strategy.

"We are probably betting our company on this," says Simon Palmer, president of STA, one of HP's fastest growing emerging account solution providers, headquartered in Tustin, Calif. "We are certainly betting our growth plan on this (emerging growth) account segment with HP this year. I don't have any other growth plan that I am looking at other than this plan. That is how much we believe in the plan."

Palmer says he expects to grow his incremental business with HP in net new accounts by 20 percent. And that's a conservative estimate, he says.

Of course, that means focusing sales reps squarely on the HP emerging midmarket accounts. STA has six sales reps working "religiously" with HP's inside sales reps and outside sales reps on "coordinated call plans" to win business in 100 net new accounts, said Palmer.

"The HP reps are making cold calls for my reps at my sales reps' direction," he said. "The (STA and HP) reps get together once a week and go through an account call plan. The midmarket account space is all about velocity. If you don't get off your butt and act you are going to lose in that space. That is true for us and HP."

"We have the responsibility of attacking those accounts and working those accounts," said Palmer. "It was made clear that if we don't assume that responsibility and show activity and actions over a 60-90 day period those accounts will be moved to someone else. And frankly we are okay with that."

Palmer says the STA and HP united sales effort is aimed squarely at displacing Dell, Cisco, IBM and Oracle/Sun in competitive accounts. "There is a huge opportunity here for HP to acquire competitive market share," he said. "If I am going to grow I have to get share. I can't do that in my HP installed accounts. What is huge here is what HP is doing to supplement my business. I have never had that opportunity before where HP has stood up and said 'I am going to stand up side by side with you and help you grow your business.' That is huge."

Next: A Channel Structure To Hunt New Midmarket Business

Marc Sarazin, executive vice president, sales and marketing for AdvizeX Technologies, one of HP's top 20 partners headquartered in Independence, Ohio, said his team has been mapped into 500 net new accounts.

Sarazin said his goal is to grow sales 25 percent this year. That's not unusual for AdvizeX. The company has over the last three years a compound annual growth rate of 27 percent for its HP business.

Key to AdvizeX's success is a dedicated net new account teams that focuses only on winning new business in the midmarket. That net new account sales team is separate from AdvizeX's traditional sales reps focused on maintaining business with established accounts.

"I have a sales force that is just dedicated to hunting new business in this segment," said Sarazin. "When HP came to market with this model we were very excited because this is the way we have been going to market for the last several years. It is a perfect synergy as it relates to our company."

Sarazin said he has made significant investments to go to market with the new HP sales model hiring "additional account executives to make sure we have the right coverage and then making investments in demand creation."

"This is a lot different than what some of HP's competitors are doing which is throwing all these accounts over the fence to the channel with no sales rep involvement," said Sarazin. "HP is going the extra mile embracing the channel and going the extra mile working side-by-side with us to deliver our joint value proposition to the customer."

Sarazin, who been in the IT sales business for 30 years, said the HP plan represents an "unprecedented level of (sales) alignment and collaboration. What HP is doing is a significant differentiator versus what IBM, Dell and others are doing in the market."

The new sales model follows a dramatic sales reorganization last year that put HP's enterprise server, storage and networking channel, operations, product team and sales reps all under a single organization led by new HP ESSN Senior Vice President Randy Seidl.

Rauch, for his part, calls the restructuring which was driven by ESSN Executive Vice President David Donatelli a "legendary sales transformation." Donatelli and Seidl, who both worked together at EMC, known for its super-aggressive direct sales operation, have brought what partners say is a more engaged sales culture sharply focused on sales growth.

Seidl, who joined HP last October, for example, canceled the two week holiday for some U.S. sales staff. That allowed HP partner STA to close a $250,000 deal on Christmas eve at 5:45 p.m. with the 11th hour help of Hooper and the Emerging Growth account team, said Palmer.

"The HP management team is absolutely focused on getting deals done," Palmer said. "That $250,000 deal was a net new account win against IBM and Dell. I would not have won that deal had HP shut down (for the holiday). That is energy and empowerment that we have never seen before. HP's entire management team cares about selling and getting stuff done and they have aligned under Seidl who owns the whole P&L (profit and loss balance sheet responsibility). There is no more infighting. Seidl makes a decision and it is done."

John Convery, executive vice president of vendor relations and marketing at Denali Advanced Integration, a Redmond, Wash.-based HP partner, said the call to action as set by Seidl is "customer calls, customer calls, customer calls." He sees the HP field sales team engaging partner sales teams like never before with a "full court press" of sales resources.

"It's a battle plan like no other I've experienced," says Convery, who expects a record 15 percent sales growth across the HP portfolio for Denali this year. "It's an exciting time."