New HP Channel Incentives Target Aggressive Growth, Cisco Displacement In Networking Deals

Hewlett Packard is arming HP Networking VARs with new channel incentives as it looks to cement the gains it's made in networking against Cisco and other rivals this year.

Those incentives include a host of new offerings in HP's PartnerONE and ExpertONE programs, and can mean as much as double the financial rewards partners receive compared to the competition, according to HP's networking channel chief.

HP Thursday confirmed that in PartnerONE, it will now offer two certification levels specific to HP Networking: Advanced Networking Specialist and Professional Networking Specialist. The former is a renaming of what was called HP's Advanced Networking Elite designation, while the latter is a new certification with lower sales and certification requirements for VARs than the Advanced designation -- a way to encourage smaller partners to sell more HP Networking, according to the vendor.

The Professional designation requires $100,000 in annual HP Networking gear sold, while the Advanced requires $500,000. With various incentives HP offers in PartnerONE, including the combination of front-end and back-end rebates and discounts combined with MDF and other incentives gleaned from other HP certifications, an HP Networking partner with a broad focus could be bagging as much as 40 percent on deals -- double the return of what many Cisco networking partners are used to, HP argues.

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"It can be cut in so many different ways," said Armughan Ahmad, vice president of Americas Channel Sales, HP Networking, in an interview with CRN earlier this week. "If you've built a networking practice and are selling storage and networking together, for example, that's more rebates."

HP has spent much of the past two years building on its networking momentum with aggressive incentives to get partners to sell more of the HP Networking portfolio.

The technology titan has been locking horns with Cisco for much of that tme, and HP this year has touted market share gains in key Cisco market segments like Ethernet switching, routing and wireless LAN while publicly boasting about its growing influence among Cisco-centric networking channel partners.

About 90 percent of HP Networking sales now go through partners, said Ahmad, and 30 of Cisco's top 40 partners now also sell HP Networking. HP Networking was also a bright spot in HP's recent fourth quarter FY2011 earnings, showing 5 percent year-over-year growth.

"The sizes of the deals are growing," said Mike Banic, vice president of marketing for HP Networking. "I see increasing prominence of our partners in [those competitive situations] and a lot more bundled into deals."

In ExpertONE, HP is now offering a "Fast Track" program to certify partners on HP Converged Infrastructure using their existing certifications. Partners can use equivalent certifications earned through competitors like Cisco to effectively speed through HP's certification process. For example, a partner that held a Cisco CCIE certification would be able to complete HP Master ASE Networking Infrastructure training in ExpertONE in 10 days, as opposed to the 35 days for HP Networking certification candidates without comparable certification.

According to HP, both the PartnerONE and ExpertONE moves have a similar driver: more HP-badged partners and networking professionals selling more HP Networking.

"The request from partners we hear all the time is what can we do to increase the number of HP-certified networking professionals," Banic said.

The ExpertONE updates also include hands-on technical training from HP ExpertONE Learning Solutions Partners, who are based throughout the world and authorized by HP to teach course materials. HP Networking is the initial offering from the Learning Solutions Partners, while the whole HP Converged Infrastructure portfolio will be available for training in 2012.

HP is further providing training materials and study guides under the banner of HP Press, including textbooks, e-books and mobile applications. Five certification exam study guides, the first in a series, will be available starting in January, and will also focus on networking.

In 2014, HP plans to begin offering certifications from the HP Institute, an academic curriculum that will provide architecture-level HP certifications starting with HP Networking and working up through HP Converged Infrastructure.

NEXT: HP Re-Ups Catalyst For Change

HP launched Catalyst for Change -- a program designed to reward partners for displacing Cisco switching equipment in networking deals -- a year ago, and according to Ahmad saw strong take-up from HP partners from the get-go. HP estimates that more than $9 billion of legacy Cisco gear is up for potential replacement at the moment.

"We know that customers are in a position where tying things to one vendor might not be in their best interest," Ahmad said. "So we've helped to open up the debate and conversation."

HP has renewed Catalyst for Change for calendar year 2012, and while the compensation terms will remain the same -- an additional 20 percent back-end rebate on top of the discount partners would already make specific to their HP partnering tier -- the scope of the program has widened. HP will now reward partners not only for replacing Cisco, but also for Juniper, Brocade and other data networking competitors' gear, as well as older gear from HP itself. Customer upgrades from older ProCurve gear, for example, are fairly common, executives said.

"There are customers that may have bought configured stackable switches in the past and want to now go to the matrix stacking, so that's a good opportunity to use the program," Banic said. "Or maybe it's a case where they're moving from Gigabit to 10 Gigabit top-of-rack switches for their data center."

HP has also eliminated the deal size threshold for Catalyst for Change deals. In its first year, the customer deal needed to be over $100,000 to be eligible for the Catalyst discount. But HP will now evaluate deals on a case-by-case basis, Ahmad said, and doesn't have a specific threshold by which a deal is approved or not.

HP Financial Servcies is also offering U.S.-based HP partners the ability to lease HP Networking hardware for 1.5 percent of list price, per month, for 18 months. Lease terms can be extended, or the equipment purchased outright, at the end of that period.

NEXT: HP Networking's Partner Appeal

Marc Sarazin, executive vice president of sales and marketing for AdvizeX Technologies, an Independence, Ohio-based solution provider and Top 20 HP partner, said his VAR's loyalty to the HP Networking portfolio has thus far been richly rewarded.

AdvizeX is an HP Networking-only partner, having added the products in November 2009 after many years selling other HP brands. Sarazin said the choice to do so effectively doubled AdvizeX's market opportunity, and many of AdvizeX's customers seized on the end-to-end sales opportunity with servers, storage and networking right away. AdvizeX's HP Networking business grew 500 percent year-over-year from 2010 to 2011 and Sarazin said the company expects 300 percent year-over-year growth in the new year.

"HP Networking is our highest-margin product in the portfolio today when you look at front-end margin and back-end rebates," Sarazin told CRN. "We looked at the options and we felt that HP had superior technology."

That success is spread evenly across HP's full Networking portfolio, Sarazin said, and AdvizeX has seen banner deals in both core networking and edge networking deployments behind HP gear and HP services.

AdvizeX has taken advantage of Catalyst for Change, and Sarazin applauded HP's choice to announce it for a full year, not as a quarterly-based promotion of the type seen by many vendors with their channel incentives.

AdvizeX's team takes the Catalyst promotion into the majority of its sales opportunities and it applies about 50 percent of the time, he said. Part of AdvizeX's advantage, Sarazin noted, is that it has staffed an internal team devoted solely to marketing and selling HP Networking products.

HP Networking has remained a door-opener for the rest of the HP products AdvizeX sells, Sarazin said.

"We've had situations where we've started with HP Networking and it's enabled us to have conversations on the rest of the portfolio," he said.