HP Sharpens Blade Edge

As Hewlett-Packard's BladeSystem Game Plan comes of age, Rick Becker, vice president and general manager of HP's new BladeSystem Division, and Paul Miller, vice president of BladeSystem marketing, recently sat down with Industry Editor Craig Zarley to talk about their plans to use the channel to forward the Palo Alto, Calif.-based vendor's strategy.

CRN: How much of HP's blade business is currently going through the channel in North America?

BECKER: Probably at least half is going through the channel today. But the important thing to remember is that the whole blade market is in its infancy. We're leading in volume. We've sold over 100,000 blade servers. But when you contrast that to what we take through the channel across our tower and rack servers, that's a really small number. But that's just today. BladeSystems and the infrastructure associated with them are absolutely the direction of the future. By 2008, we see half of dense- and rack-volume servers being comprised on BladeSystem infrastructure. When you look at our channel partners today and the opportunities, they are getting half of the business today but it's a small piece in contrast to the overall server business. But in time it's going to be over half of the server business, and it opens up a lot of opportunities.

CRN: Which HP solution providers are currently most active in the blade market?

BECKER: Fifty percent of our blades today are going into the small- and medium-business market. That brings CDW to mind. We do a good deal of our blade interaction with them.

CRN: That's surprising that you mention CDW. I would think that HP's enterprise solution providers would be at the vanguard of HP's blade strategy.

BECKER: The infrastructure play is huge for our data center customers, but the fact of the matter is we are seeing 50 percent of the business going to the SMB market and we are doing that through partners like CDW.

MILLER: Of that 50 percent that goes into SMB, 50 percent, or 25 percent overall, of that goes into businesses of 100 or fewer employees and the rest goes into businesses of up to 5,000 employees.

BECKER: The fact of the matter is [that with limited IT resources] the agility of the infrastructure enables [SMB customers] to be successful. We also not only meet their price point, but we give them the capability they didn't have with legacy systems. The reason this is huge for our channel partners is that they are the ones touching these customers. In the rather large data center, it could be a channel partner, or it could be an HP salesperson either calling on them alone or together [with a channel partner]. But when you look at this SMB space, there is a high probability that it is a channel partner completing that sale.

CRN: When you talk about the SMB market vs. the enterprise market, you appear to be stressing the flexibility blades offer over density and space advantages.

BECKER: Oh, absolutely. It's not about density at all in the SMB market. It's about the sophisticated management that lets people dynamically change their resources. It's about an enclosure that gives them the capability to have higher availability as their [users] may demand. Also, when you leverage the infrastructure, you can actually run workstation applications in virtual partitions on top of the blade. So they are able to leverage that same infrastructure not only for their server needs, but also for their desktop needs.

MILLER: The blade market is a two-horse race. Our approach is with the tools and capabilities and embracing the channel and distribution, we're driving toward the volume adoption of blades. We're not just focusing on the one data center problem like our competition is. We believe blades will be 25 percent to 30 percent of our [server] business and a huge portion of the channel business and it's all about how you build an infrastructure to achieve volume adoption.

CRN: When I talk to HP solution providers, I find very few that are actively selling HP blades. What plans do you have to jump-start your blade strategy in the channel?

BECKER: That's why I'm in this role and that's why we've created this new organization. You'll see my team working with the channel partners to fix what you've just described. We started early with the bigger [solution providers] because they have more resources and we see them being hugely successful. But we will be reaching out to all of our channel partners and we understand there has to be a whole ecosystem to bring this to volume successfully.