Disties Cautiously Optimistic About New HP Regime

After several years of inconsistent channel programs and execution that hindered those programs, as well as an increased focus on a direct initiative, distributors are willing to forgive Hurd the transgressions of the previous administration led by Carly Fiorina.

"We're glad to see someone on board. We haven't had a lot of interaction with Mark but with change comes opportunity. We hope they will continue to focus on some of the channel commitments and strategies they laid out at [Annual Partner Conference]," said Paul Bay, senior vice president of vendor management at Ingram Micro.

HP promised to create a simpler channel program and use the channel more at its Annual Partner Conference last month, Bay said.

"We want to get in front of Mark, make sure the channel is heard. It's a new playing field. The sooner we get out and evangelize the benefits of the channel, the sooner we are able to engage with HP," Bay said.

Hurd was previously the CEO of NCR and is a relative unknown to the channel because 90 percent of NCR's business was direct. But distribution executives knew of the company and its performance.

"Their POS business is very solid. He's done very well there," said Ken Lamneck, president of the Americas at Tech Data. "There is a difference in scale between HP and NCR. It is a more complex organization than he had at NCR. Looking at his background, he executed very well."

It was important for HP to replace Fiorina as quickly as possible to avoid losing marketshare to IBM and Dell, executives said.

"I was most impressed with how quickly [HP's board] could get someone in the seat. That's good news. The longer that went on, the more unsettled people could become," Lamneck said. "His channel experience is not as extensive as HP's direction. We're all anxious to see what his strategy and position is on the channel as I'm sure all the solution providers are."

One distribution executive who asked not to be named said it is important for Hurd to come out with a strong channel message immediately.

"We need HP to provide to us, what's the deck of cards we have to play with. Things have never been solidified," this executive said. "Distributors and solution providers want to know 'these are the rules.' The rules constantly change and that creates conflict. We just want the clarity that HP has not had. That creates a lack of trust. When that happens people start to look the other way. They may side with IBM, not HP, if they have an opportunity to do that. In our minds, it's stabilized, it's getting better."

Distributors also want Hurd to leave HP's senior managers in place because it is a team, led by Vyomesh Joshi, executive vice president of its Imaging and Personal Systems Group, that is channel friendly.

"To bring someone in that doesn't have the understanding of that large a business, you have to draw off the rest of your executive team to gain knowledge and be able to do things," said Mike Long, president of North American Computer Products at Arrow Electronics. "The execution problems were not the fault of the current management team. When you bring in a CEO that is not completely seasoned, you have to have trust in your next management level down."

The distribution executive who asked not to be named had hoped Joshi would get the CEO job. "He was interested in that job. We'll see how that plays out. They need a good executive [in charge of channels]. That first thing to watch in the next year is the relationship between Mark and Vijay," the executive said.

Joshi was considered to be HP's top internal candidate to replace Fiorina, but distribution executives do not believe Hurd's appointment means the end for Joshi at HP.

"I don't know the psyche of the man [Joshi], but he has more responsibility. He's growing inside HP," said Steve Tepedino, president of Avnet Partner Solutions, Tempe, Ariz. "If Mark were to get rid of VJ, that would be insane. He understands the channel, he embodies HP. [Hurd] hasn't given any indication that he would run the company by himself. He needs guys like VJ," Tepedino said.

HP should groom Joshi to eventually replace Hurd, Tepedino said.

"He's talented but HP needs more talented guys than they currently have. That's not negative towards VJ. This [addition of Hurd] bolsters HP's bench. Joshi is still on track to learn and he could become HP's CEO of the future," Tepedino said. "But Hurd is the right guy for now. HP's vision is fantastic, from the consumer side through to the enterprise. But that vision has not manifested that self into a strategy for folks to execute.

"Channel partners are working hard for HP today. They are the reason HP wins today. But partners can do more for HP than they are currently doing. As HP follows through and makes partners and customers feel better about HP, it will grow marketshare," Tepedino said.