CRN Exclusive: Aruba Channel Leader On Winning More Against Cisco With HPE, And 'Beefed-Up' Margins

Aruba On Fire

After a slew of Aruba Networks releases, Aruba's North American channel leader, Jim Harold, talks about the future as an Hewlett Packard Enterprise company, winning more against networking rival Cisco and beefing up margins for the channel under the new Partner Ready for Networking program.

"Our up-front benefits increased 30 percent in the new program," said Harold in an interview with CRN during HPE's 2016 Global Partner Conference in Boston.

Harold also discusses the power Aruba now has with the backing of HPE. "Before, [former Cisco CEO] John Chambers would fly in [to close] big customer deals [for Cisco]; now it's [HPE CEO] Meg Whitman flying in [to close deals]," he said.

Is Aruba competing more effectively against Cisco in 2016 as an HPE subsidiary?

The leverage of being part of HPE is huge. Having a strong campus edge story now and the integration of the switching makes us stronger. We're in a much stronger position today. Aruba was a good brand, but now we got the power of HPE behind us as a company -- that's helped quite a bit.

Before, [former Cisco CEO] John Chambers would fly in [to close] big customer deals [for Cisco]; now it's [HPE CEO] Meg Whitman flying in [to close deals].

Are you seeing larger wins with the backing of HPE?

The whole HPE acquisition just boosted our presence in the market. We're seeing bigger opportunities, bigger wins. It's fun now because we're really feeling that acceleration piece. We're still working closely with [HPE's] Enterprise Group. … We work very closely together both from a sales and channel standpoint.

We've gone head-to-head with Cisco our whole life and this was the attraction when HP acquired Aruba was the fact that we could compete very well against Cisco in the networking space. We bring that success over already.

Aruba-HPE just launched its first-ever joint partner program. What's the benefit if I'm an Aruba partner?

For an Aruba partner up until now, it's been a bit challenging because the result of [keeping] two programs after the acquisition is two price lists, two partner programs, two deal registrations -- so it was challenging. A lot of partners did pick up the switching portfolio, but we had to put them into the other program. So we've thrown them a bit of a challenge up until now. We're excited now because it's one price list, one program so the ease of doing business will get a lot better.

The benefit is for investing and cross-selling across the portfolio. We also grandfather people in at their highest level.

Will margins increase for channel partners in the new joint program?

Let's say a partner is selling at 'X' margin. The additive margin on top of that which they can hold and would differentiate them from other partners is pretty substantial. So that's bumped up or beefed up quite a bit.

Any specific details on the increased margins in the new program?

Our up-front benefits increased 30 percent in the new program. … We also took deal registration up to 12 percent.

On the back end, the switching part was always rich. It's now 2 percent on wireless LAN, 4 percent on switching back-end rebate -- if you do both, you get 6 percent. So these kickers, partners are pretty excited about. … So if you sell the blended portfolio both across the switching and WLAN there's a big boost in profitability.

How does the new program stack up against competitors' partner programs?

In a lot of instances, it's better. One big aspect is it's easy and predictable. I've spoken to partners about competitive programs and sometimes they'll have a price and go after a bid and what they do is go through a booklet of back-end rebates … this is more predictable as far as your discount, your margin. I think other programs are a little more complex from our competitors to figure that out.

How many Aruba partners have taken advantage of HPE's portfolio?

If you look at the Aruba partner base, it was the classic [anything but Cisco] partner, very strong with the regional-type partners. We've seen a lot of them adopt and start to sell switching. It took a couple quarters of training. We're seeing good pickup on selling the switching portfolio.

What helped is that we branded part of the portfolio 'Aruba' -- so we rebranded some of the switching that were key in the campus, so it's an easier message for the customer and partner.

Is any Aruba partner selling servers now that weren't before?

Yes. We do have partners that took advantage in growing in other areas with HPE. Some now are selling storage. Some are selling server that weren't selling that before. So they see the opportunity within their customer base where now they can expand their portfolio with server, storage or other products. We definitely are seeing that cross-pollination.

Are there opportunities for networking refreshes in 2016?

If you look at the market with [802.11ac] Wave 2, we're at the beginning of that curve in growth over the next couple of years. … Wave 2 is a great growth opportunity but it's also going to drag or pull a refresh from a campus switching standpoint. As customers deploy Wave 2, they will have to upgrade their campus infrastructure. So the opportunity on refresh is huge. We tell partners, if you don't win the Wave 2 battle, it's a bit harder with the campus refresh.

When HPE's acquisition of Aruba was announced, how did partners react?

Partners were a little upset and curious about what would happen and actually we brought [Aruba CEO] Dominic Orr into the [partner] council meeting and he spent about an hour reassuring everybody that we were going to protect their investments. So they weren't going to get gobbled up into this HP, HPE and have to compete with some of the bigger server, storage guys. We sent that message out early.

Looking a few years ahead, what can Aruba partners expect regarding channel programs?

We're looking at the new program to move quickly and accelerate with our partner base toward that single story – mobile first – we got our messaging pretty set. For us, it's move quickly, get partners into the new program, give them a lot of rewards, then I think we fine-tune from there. The fine-tuning goes into maybe additional competencies we may have.