HPE Global Channel VP Archer On The Pointnext Partner Offensive, Rules Of Engagement, And Tapping Into The $2.1 Trillion Opportunity

Pointnext Global Channels VP Archer On The Record

HPE Global Channel Vice President Ken Archer, a highly respected 30-plus-year channel veteran who was recently appointed head of the Pointnext partner business, spoke with CRN about the Pointnext partner sales offensive, rules of engagement and IT services economics.

Archer, who was handpicked by HPE Pointnext Senior Vice President Ana Pinczuk to lead the channel offensive, said he has never seen a bigger commitment to help partners "transform to where the market is going" than Pointnext.

"Hewlett Packard Enterprise is sharing our know-how and intellectual property with partners," said Archer. "Not only are we going to provide partners with the whole [HPE services] portfolio to sell and deliver, but we are going to provide them with the secret sauce and capabilities on delivering services engagements."

The potential market opportunity in the digital transformation services business is $2.1 trillion by 2019, according to market researcher IDC.

"Partners need to provide a different type of value to customers with this digital transformation," said Archer. "They must evolve their portfolio, structure, processes, capabilities and skills."

What is the message to partners now that you have been appointed to lead the Pointnext channel charge?

Pointnext is open for business. We want partners to jump on the [digital transformation services] wave with us. We are building a service partner network for the business for today and tomorrow. There has never been a commitment in my 30 years at Hewlett Packard Enterprise more toward helping the partner transform to where the market is going than Pointnext. Never. And I have been in the IT industry for a long, long time.

We have a business leader in [HPE Senior Vice President and Pointnext General Manager] Ana Pinczuk, an understanding of what needs to get done and complete support all the way from Ana to the rest of the leadership team on supporting the channel.

How big is the Pointnext digital transformation opportunity?

IDC is predicting $2.1 trillion digital transformation spend by 2019. So customers know they have to spend to transform their business model. They want to work with partners and vendors to make that happen.

Every business is being transformed. We saw the transformation of video with Netflix and the taxi industry with Uber. Partners need to provide a different type of value to customers with this digital transformation. They must evolve their portfolio, structure, processes, capabilities and skills.

What is the Pointnext channel strategy?

The strategy is all around never having the partners say no as customers go through their digital transformation. Partners – even the larger ones – are getting hit with transformation requirements and specifications, and they are looking for help. If partners don't have that particular expertise, we can provide them the ability to access it from us or through our partner ecosystem.

If we provide partners our entire Pointnext portfolio plus complementary solutions and services capabilities from our partner ecosystem, a partner never has to say no -- never has to disengage from a customer.

The customer looks at the partner as the trusted adviser because they never have to bring in another partner. The partner doesn't want to say no and have someone walk through the door as a potential competitor.

Pointnext provides more value to the solution provider. Now they have a vendor like Hewlett Packard Enterprise that has a rich portfolio of services and expertise they can avail themselves of.

How big a differentiator is this versus the competition?

There are some vendors out there that have a services strategy, but there is nobody that has a strategy around augmentation like HPE. That’s whether HPE is leading the engagement and we are augmenting our services capabilities with partners or we position the partner as leading the service engagement and we augment their capabilities or partners are augmenting each other.

Everybody subcontracts in the services world, and it is a struggle in running a services business. It has the highest margins. But at the same time, you have to have [high] utilization of your bench expertise. If you don't have close to 90 percent bench utilization, that is profit leakage.

The idea here is you use your services expertise for where you are going to specialize and focus your buildout and then you complement and augment for the rest. That is a huge strategic advantage. We are going through our own digital transformation so we have a point of view of how we can help customers and help partners help customers. This is what Pointnext was created to do.

What is the overall Pointnext services vision?

Pointnext is all about pointing to that next capability that we need to enable customers with to compete with what is going on with every industry being transformed.

We are accelerating what's next. We have advisory services, professional services and operational services. In operations – the pay-as-you-use model is hot right now.

We have a portfolio that is going to enable solution providers. They have never, never had these kinds of capabilities. Not only is it good for them, but it is also great for their customers. Now they don't have to bring in a systems integrator because they don't have a certain capability.

Talk about the partner-led services model augmented by the HPE sales engagement model.

I think one of the key things is that Hewlett Packard Enterprise is sharing our know-how and intellectual property with partners. Not only are we going to provide partners with the whole [HPE services] portfolio to sell and deliver, but we are going to provide them with the secret sauce and capabilities on delivering services engagements. You know how many client engagements we have done over the years. That is critical.

What is the Pointnext rules of engagement model with partners?

We are crafting rules of engagement to make sure that we are supporting those partners that are engaged with the customer. So we consult with them and we understand what they do and how we can help them in an augmentation role.

What is the margin model for teaming with partners on services?

Most importantly, we're monitoring the partner economics. So we are making sure that as the partners commit to doing this, the margins are rich on both the selling of and the delivery of services.

We want to make sure they make good money. Everybody knows hardware resell margins are shrinking. How we help partners build this services capability over time at their speed is critical. Again, we can help them by making them true solution providers. Selling solutions starts with services.

What partners are you targeting for Pointnext partnerships?

We are looking at value players who already have some services capability and are looking to increase their services capabilities and competencies. If they are committed, we are committed. Over time we help them to build their services business with the intent to provide higher-margin value to customers.

They can run their metrics of success with our help. That bench utilization is critical in this business. Whether they want to just sell our services or sell and deliver, we are committed to working with them in a flexible engagement model.

Ideally, the partners we want to start with are those that are ready to sell and deliver. That is good for them, their customers and us. We are driving augmentation with our strategy. We want to count on partners that can deliver. It is all around one plus one equals four.

What is going to be the economic impact on the channel from this Pointnext services charge?

We believe that this is the difference-maker in making partners profitable with our Hewlett Packard Enterprise Partner Ready program. There is a Partner Ready for services element to that program. Pointnext is really the highest-margin products and offers for us in enabling the channel to take advantage of selling and delivering. It will be the difference-maker in partners being profitable and financially healthy versus those that stay in the hardware business and don't transform by picking up a services focus with us.