HP Enterprise Shifts Thousands Of Accounts To Partners, Will Not Pay Direct Sales Force For SMB-Midmarket Deals

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Hewlett Packard Enterprise is stepping up its channel game by refusing to pay its direct sales force for any SMB and midmarket deals effective Nov. 1 as it moves thousands of accounts to partners.

The blockbuster policy shift was announced by Hewlett Packard Enterprise Group Vice President and General Manager of Americas Sales Scott Dunsire in an XChange 2015 conference session on the HP split hosted by Robert Faletra, CEO of The Channel Company, the publisher of CRN.

Under the channel sales shift, Hewlett Packard Enterprise has reclassified its SMB and Commercial Two midmarket segment as a 100 percent channel business, said Dunsire.

"That is a significant amount of revenue [for the channel]," said Dunsire. "When I say significant, I mean significant. We actually are not going to pay our end-user sales teams if they don't have a partner attached to those deals. We are putting our money where our mouth is."

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The shift comes as Hewlett Packard Enterprise moves aggressively to increase the percentage of sales it moves through the channel from about 70 percent to 80 percent, said Dunsire.

Dunsire said the change represents a "huge" opportunity for Hewlett Packard Enterprise partners. "This gives us an opportunity to work more closely with you," Dunsire told several hundred partners in a packed room. "This is a lot of revenue we are moving from direct to indirect. That's a big deal for HP, and it should be a big deal for you as well."

The policy shift leaves Hewlett Packard Enterprise's direct sales force focused first and foremost on the top several hundred global accounts and those classified in Hewlett Packard Enterprise parlance as Commercial One -- about 300 primarily large enterprise customers. "Everything else is a channel play for HP," said Dunsire.

If that isn't enough, Dunsire told partners Hewlett Packard Enterprise is aggressively increasing channel investments in the U.S., effective Nov. 1, to drive more channel sales.

"We are adding a significant amount of resources to help our channel partners," he said. "We are making some significant investments in the Americas. Every [channel] dollar we invest in the U.S. pays off in $140 return in the TAM (total available market). We are very focused on driving more at bats.  The only way to get there is through the partner community."

Dunsire said he expects the changes to drive even more rapid growth in Hewlett Packard Enterprise products likes its 3Par storage offering, which is growing at a triple digit rate. "We are winning 60 percent of the time when we get in front of a customer with 3Par," he said. "This is about helping our partners get more at bats with products like 3Par. We know we have a very good story."

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