HP's Donatelli: New Pricing Firepower Helping Partners Win Server Deals

Dave Donatelli

Hewlett-Packard Enterprise Group Executive Vice President Dave Donatelli said the computer giant already is seeing "encouraging early results" from dramatic changes made to give partners the pricing firepower they need to win against Dell.

"We are taking a lot of action," said Donatelli in an exclusive interview with CRN at HP's Discover conference in Las Vegas, where the company introduced new HP ProLiant servers. "We have seen encouraging early results. And at the same time, we are going to continue to look where else we should take action in order to continue to improve."

HP released a number of the new tools in just the past two weeks and has put in place a "very detailed road map" of additional offerings aimed at improving HP server competitiveness, he said.

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"We actually just did an internal review just the other day on this, and you'll see things like quoting [tools], pricing [tools] -- all the things that will lead to speed and agility in terms of selling servers have improved," he said. "We believe we are going to make significant improvement over the short term."

HP partners said they already are seeing the impact of HP's aggressive moves to stem the server share gains made by rival Dell in the first quarter.

Chris Case, president and CEO of Sequel Data Systems, an HP enterprise partner based in Austin, Texas, said he has seen HP get more aggressive in helping him win deals with quick pricing actions. Just this week, Case said he had HP get more competitive on pricing in a sizable server-storage deal.

"We're looking to get into the account and HP showed it was willing to do what it takes to win," Case said. "Already we can tell with this opportunity that HP is making the commitment to get us to where we need to be to win against Dell. It's a significant deal and Dell is being very aggressive. HP is providing the discount firepower. Now it's up to us to win it."

Sequel Data Systems also has seen HP put changes in place that have dramatically reduced how long it takes to get a pricing action in a competitive situation. "We don't have to escalate as many deals [to get HP pricing approval]," he said. "It's great to see HP being more competitive against Dell. We lost a deal last quarter where we had a perfect opportunity to unseat Dell and couldn't get where we needed to be on a server-storage deal."

NEXT: Donatelli Credits HP CEO For Taking Action

HP's energized charge comes after Dell made big share gains in the first quarter of 2013, with its worldwide server revenue up 14.4 percent in the first quarter of 2013, compared with the same period a year ago, according to market researcher Gartner. HP's worldwide revenue share was down by that same 14.4 percent mark in the first quarter, according to Gartner.

Donatelli credited HP CEO Meg Whitman for making the big investments necessary to make significant system and policy changes to become more agile in the server market. "Change starts at the top," he said. "And the great news is Meg has been extremely supportive in making these changes because these require significant system and policy changes within the company. And so I think the company has always wanted to do it. It is just an extremely large and expensive task. But the great news is we have decided to do it. And we are executing on it," he said.

"You can see measurable progress today," Donatelli continued. "And we measure it. And even the enhancements we have put out over the last couple of weeks are all meant to make more progress. And you'll see we have a very detailed road map in the coming quarters to continue to address this."

Rich Baldwin, co-founder and chief strategy officer of Nth Generation Computing, a San Diego-based HP enterprise partner, said he sees HP getting more aggressive on any and all deals. "I just heard from several people at HP that they will not lose on price under any circumstances," he said. "All the execs are saying, 'You got a problem? You come to me and I'll get you the price you need to win the business.' "

That kind of no-nonsense competitive position is a big change for HP, said Baldwin. "In the past, they basically took the position that there were systems, procedures and limits, and they would not go there. It used to take days -- sometimes even a week -- to get pricing."

Donatelli said a good deal of the changes are aimed at giving partners the tools they need to quickly close deals in the field without getting a pricing action from HP. "Our goal with all of these programs -- whether it is pricing or tools -- is to make partners more independent so they do not have to come back to HP and we do not have to intervene in the transaction," he said. "That is our goal. And we are measuring all of that. We can measure how often someone has to come back. Our goal is to reduce that as much as we can."