Partners: HP Security Unit Channel Changes Are Opening Door To Big Sales Gains

Security solution providers said major account changes are setting the stage for dramatic sales gains for Hewlett-Packard's robust enterprise security product portfolio.

Partners said they are seeing an increased sales pipeline as a result of a market-rattling channel shift that moves 4,500 top accounts that were once considered the province of HP's direct sales team to a 100 percent channel sales model. In addition, HP Security is no longer retiring the quota on services for its direct sales reps.

The HP channel changes, which went into effect Nov. 1, are expected to add more than $30 million in sales to HP security partners.

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Steve Barone, CEO for Creative Breakthroughs Inc. (CBI), an IT risk management company and top security solution provider headquartered in Troy, Mich., said the HP changes have driven a whopping 20 times increase in his company's HP sales pipeline. He expects that pipeline to translate into five times sales growth in CBI's HP security business in 2015, putting HP at the end of this year as his company's second-biggest vendor.

"It's a big breakthrough," said Barone. "You now have 4,500 customers moving from named accounts to 100 percent through the channel. We feel really good about it. HP's enterprise security team is directly aligned with us."

CBI is finding success selling HP ArcSight, a security information and event management offering, as a managed service with consultants that have deep expertise in tapping the full potential of the product. The HP security portfolio also includes TippingPoint, an intrusion-prevention product; Fortify, an application security product; and Atalla, a cloud encryption product.

Barone credited the HP channel shift to a talented "channel-friendly" group of senior executives at the top of the organization, including HP Security Enterprise Products Senior Vice President Art Gilliland and Americas Vice President of Security Sales Sean Foster. "What I see is some really strong executives at the top doing a good job of reinventing," said Barone. "I am looking forward to the next round of revisions."

In one case, HP teamed with CBI on ArcSight as a service deal that in the past would have been lost as a result of HP pitching it as a straight ArcSight license deal, said HP's Foster. "We are changing the way we think about solving problems for customers as opposed to just slamming deals down," he said.

ReliaQuest, a Tampa, Fla.-based security solution provider, has seen its HP security sales pipeline grow sixfold to about $6 million as a result of the channel changes, said Brian Murphy, president and CEO of ReliaQuest, which offers an HP ArcSight co-managed security service. "This is a big deal for us," he said. "It has lit a fire under our relationship with HP. We have 20 openings right now with the growth we are seeing with HP."

Murphy attributes his increased HP sales pipeline to much stronger collaboration with HP sales reps, along with new lines of communication to HP marketing teams, lead-generation platforms and co-branding. "We are getting really good at going into accounts together," Murphy said. "That is a major culture change for HP. You are seeing some really cool relationships being built between our guys and the HP guys."

Murphy credited not only HP's senior leadership team, but also Glenn Ewing, ReliaQuest's HP partner sales rep. "Glenn as our day-to-day contact is unbelievable," said Murphy. "He has been super-responsive, on top of it. He has been our champion within HP, talking to their reps about what we can do and helping us navigate through the HP universe."

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Chris Scanlan, senior vice president for North American Sales for $1.5 billion security behemoth Accuvant-FishNet, said HP has moved from a direct-sales-minded security organization to a partner-centric security business. He said moving the 4,500 accounts into a channel-only model was a sign of just how serious the company is about teaming with security solution providers like Accuvant, which are crafting security solutions for complex enterprise environments.

The old HP-named-account model was an "open invitation" for Accuvant sales reps, who are already doing business in many of those large accounts, to compete with HP security direct sales reps, said Scanlan.

As a result, Accuvant's HP security business was flat in 2014, said Scanlan, well behind the sales growth of Accuvant's other 15 strategic security vendor partners. Now, HP is poised to be a growing Accuvant strategic partner, he said. "HP is making it easy for us to transact and do business with them," he said. "The HP security sales force is changing and becoming much more collaborative. Now HP needs to be a little more loud. They need to put on a full-court press for 2015."

HP's Foster, a 16-year Symantec veteran who joined HP eight months ago and pulled the trigger on the major account channel changes, said that is just what HP plans to do as it ramps up its channel offensive. "The best is yet to come," he said, promising partners a new multitier channel program with increased incentives to reward HP partners that make increased investments with HP. "We are just starting to scratch the surface of what we can do."

Foster said there was simply no "rhyme or reason" to the named-account structure when he took the HP job. "It was a total land grab," he said."What we did was put specific attributes in place for the named accounts and then mandated the 4,500 accounts that would have to go channel. The mindset here was to go it alone and not give any points to partners. We are eliminating that."

HP, in fact, has instituted strict, new account plans that mandated that HP territory sales reps would not be paid on those 4,500 accounts unless it went through the channel, said Foster. "There is a carrot and a stick and this has been a stick approach within HP," he said. "We are that serious about this. We wrote it into the comp plans, and now some people in HP are scrambling. We are trying to change the behavior at HP security to show that we are better with partners. Partners can help us increase the deal size, time to market, scalability and time to get deals done."

As for the HP direct sales rep compensation changes on security services, Foster said it was a major signal to solution providers. "We realize that is where partners make a lot of their money and margin," he said. "The idea behind this was to foster our partner community."

The changes have resulted in more HP sales reps starting to see the benefits of working with partners, and more trust between HP sales reps and partners. "I felt like coming into this job that we didn't have the channel community behind HP Security products," Foster said. "They didn't trust that we would have their backs if they brought us into a deal. We would partner with them one quarter and then not partner with them the next quarter. That had to stop. There was too much uncertainty. I wanted to bring certainty to the relationships and let partners know if they invested in us, we would have their back and stick with them. Stick with us, and we will stick with you."

HP CEO Meg Whitman, who will head up Hewlett-Packard Enterprise when HP splits in two next Nov. 1, has voiced her confidence in the security business. In fact, Whitman addressed the security team at the start of the fiscal year, rallying the security team and pledging increased investment in the business. That has the security business team fired up, said Foster. "You are going to see some new, exciting products from HP Security this fiscal year," he said.