HP Wants To Mend Fences With Partners, But Is It Too Late?

Hewlett-Packard says it wants to rebuild frayed channel relationships. But HP partners -- especially ones focused on the small and medium business market -- are viewing this pledge with a skeptical eye.

In the course of the past year, partners told CRN that HP has failed to adequately communicate strategic channel decisions, such as rebranding its Solution Partners Organization (SPO) and cutting support for small and medium business-focused partners. It is still tough for some partners to get support from HP, and competitors have been taking advantage of the confusion to lure away SMB channel business.

Pete Busam, principal at Equilibrium Consulting, a Marlton, N.J.-based firm that works with HP partners, says HP has recast its former SMB channel reps as field reps supporting partners with annual sales of at least $250,000. Partners that don't meet this revenue threshold, he said, can only obtain support from HP's call center.

[Related: HP Says It Needs To 'Rebuild' Channel Relationships In Coming Year ]

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"The small guys are more frustrated than ever, and they are going to partners such as Lenovo, and even Dell, because they can get someone on the phone to help them," Busam said in an interview. "HP's partnerships are fragile and they need serious improvements quickly, because this is hurting sales."

Even medium-size partners with booming businesses are having trouble getting on HP's radar. One partner, who grew his HP business from $400,000 to $1.2 million during 2012, told CRN that HP insists on supporting him through MarketStar, a third-party firm to which HP outsources some of its channel management.

And despite doing well over $250,000 in HP business in 2011, the partner told CRN he could still only obtain support through HP's SMB call center.

"HP is a huge company that does not understand what it's like to work with them from a perspective of a smaller company," said the partner, who asked not to be named. "That is, and has always been, part of the problem."

HP is denying that it pegs channel support to the amount of revenue a partner generates, however. "Though not all partners have dedicated sales reps, HP does not have a set revenue bar for determining sales coverage," an HP spokesperson told CRN in an email.

NEXT: The Importance Of The SPO

HP's Solution Partners Organization (SPO), formed in 2004 when HP combined its enterprise and commercial channels into a single worldwide entity, included a sales and marketing team that supported more than 25,000 HP partners and distributors.

SPO has been renamed the Channel Marketing Organization, but its functions and programs remain the same, an HP spokesperson told CRN.

Partners, on the other hand, believe that this is more than just a simple name change. SPO was a strong advocate for partners and provided cohesiveness across HP's business units, and the Channel Marketing Organization does not appear to carry the same weight.

Since the name change, HP's direct sales force has been calling on clients, making offers and creating conflict between the client and the partner, Busam told CRN.

HP, in last week's 10-K filing with the Securities and Exchange Commission, spoke of its need to "rebuild our business relationships with our channel partners."

As part of this effort, HP is planning to boost its investment in the channel this year, though the HP spokesperson did not specify by how much. "We are committed to our channel partners, and we continue to work to drive more business through the channel. As such, associated investments in driving channel growth will increase" in 2013 relative to 2012, the HP spokesperson told CRN.

HP also has arranged the Printing and Personal Systems channel organization to allow it to cover more partners, and HP is increasing funding to distributors that have dedicated support resources for SMB partners, according to the spokesperson.

While it remains to be seen if these moves will make life easier for beleaguered SMB partners, the changes could be considered steps in the right direction for a company that has long been plagued by the competing interests of its internal divisions.

John Gunn, president and CEO of ISG Technology, a Salina, Kan.-based HP partner, has been encouraged by recent deals he's seen in which multiple HP business units have worked together on bundles.

"I believe that HP has listened to partners and customers and no longer has its head in the sand," Gunn told CRN.