Q&A: HP's New CEO Tells Partners To Adjust Their Business Models

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New HP CEO and President Leo Apotheker has quickly put together a game-changing strategy that unites HP behind one strategic vision and sets the world's largest IT company on a course to play a major role in cloud computing, connected devices, software and services.




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In an interview in his office at HP's Palo Alto, Calif. headquarters, Apotheker spoke with CRN about a wide range of issues, including his views on the need for channel partners to adopt new business models, cloud computing and direct sales-channel account engagement. Here are excerpts from the interview.

You've been meeting with HP partners. Talk about the data you have collected and how it has formed your opinion of the HP channel?

First of all thank you for the opportunity. I had the pleasure of meeting HP partners all over the world actually, in the U.S., in Europe, in Asia Pacific, actually wherever I went I made a fine point of meeting at least one group of partners or individual partners. And I heard a pretty consistent story: It is no secret to you that our channel partners are a huge asset to HP. And I had the opportunity to reconfirm at every meeting how important the channel business is and how important the channel business will remain for HP.

I heard good feedback from our channel partners. They actually really enjoy working with HP which is good. They enjoy the fact that we provide a good partnership to them, great products. Like in any relationship there is always something you can improve. And that came out as well.

But the general term [feeling] around the world from any type of partner was: it is a very, very good and strong and healthy and important relationship. And the first message I wanted to convey to them and I want to convey to you as well is that for HP the channel partners are a strategic asset and we will do whatever we need to do to make sure that they have a great future with HP.

Looking at your experience from SAP, talk a little about your future vision for HP and offer the channel that is perhaps a little more hardware centric a view on how they can be involved in this evolution.

Let me just point out the following things to you. HP already has a very, very powerful software portfolio. Just take the security portfolio that we have which is extremely relevant. As I pointed out to the partners in our discussions, security is top of mind of everyone on this planet and it is growing exponentially. It goes from government to agencies to private enterprise to individuals in fact. Cybersecurity is, unfortunately, a real issue. I encourage our partners to take the HP security suite that we already have and leverage that for their business.

I also told our partners that I believe that their business model needs to evolve over time and should move more toward providing solutions to their customers so that they can broaden the kind of business relationship they have with their customers. Be it vertical or be it horizontal that is up to each partner to decide what they would like to do.

Next: Bringing Business Transparency To HP's Partners So what investments do you think they should make: you have hardware, software and services. Are there certain silos they should be making investments in? They are looking to you to help them map where they need to go.

We have a whole process in place where we chat with our partners, and it is not just me by the way, otherwise it would be a whole other situation. I would be the worst bottleneck on the planet. So we have a very well organized structure that deals with our partners around many dimensions whose job it is to provide insight into what it is we are doing and what we are going to do in the future.

I committed to our partners, by the way, that we will reinforce that and give them even more visibility so that they can build their businesses and their business plans accordingly. So I want HP to be as transparent as we can be to our partners.

I can reassure you our partners are very smart people and they know their markets, they know their customers, they know their abilities, they know what they like to do and it should be our partners who kind of figure out what it is they want to do with the capabilities we offer them. I would feel uncomfortable if we would give them too much guidance because they are close to their own markets. They probably know best what it is good for them. We will probably tell them that certain directions, should they consult us, might be in our view, in HP's view, better than others, but it doesn't mean that we are always right.

Talk about HP's enterprise sales account engagement and precisely where you see HP's direct sales force playing and HP's partners playing?

That is a great question on which we could probably have a three day conversation. But let's try to kind of boil it down to the essentials. So HP, like everyone else in this industry, has a direct sales force that looks after the major accounts. Those are the very large global accounts who actually want to have a direct relationship with HP and that is normal. And when I talk to our partners they all not only understand that, they actually support that. They get it. Perfectly logical.

Now HP has a pretty large footprint. That doesn't mean that HP knows how to do everything. So let's take a domain where our channel partners in particular have a role to play in certain type of services. Even though we have a very large services organization, that doesn't mean that we have a granularity everywhere, all the time, for every type of possible service that a large enterprise could need or would need. That is obviously complimentary [area] that we have with our channel partners. It could be a geo [geographic] play. Some of our channel partners actually create additional specific [value] on top of our solutions that we could actually provide to these large accounts as well. A traditional view would say that our partners are a channel for us. In some cases, it is conceivable that we could be a channel for our partners. Why wouldn't that be the case as long as it makes sense for everyone?

The point of this is: it is like everything else in life if you have an open dialogue and if people are pretty clear on what is happening and what the intent is of all parties concerned it works really, really well. As I said to some of our channel partners, at the end of the day, we should never let an occasional friction, that might be happening somewhere in the field because someone did something that someone else didn't like, [deter us]. That is why we talk. That is why we communicate. We should not take an occasional isolated event and extrapolate a change in strategy or something. We should never go there. That is why we talk. That is why we engage. That is why we communicate. And even in very large accounts, where there is a pretty massive presence of the HP direct salesforce, there is space for our channel partners.

Next: Bringing Pay For Performance To HP

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