HP Partner Enhancements Focus on Storage, Government - 2

By Sharon Linsenbach  |  Posted 2007-12-19

Despite having no channel chief, Hewlett-Packard has soldiered on with more changes to its PartnerOne channel program.

Stacey Wueste Davis, vice president of Solution Partners Organization partner development and programs, is the de facto head of HPs channel program, after Jim McDonnell left his position as senior vice president and general manager of HPs SPO worldwide to become vice president of global sales for the vendors Enterprise Storage and Servers Group.

However, although HP has yet to name a permanent replacement for McDonnell, the vendor has unveiled greater focus on storage and vertical alignments within PartnerOne.

Tom LaRocca, vice president of partner development and programs at HP, told Channel Insider that the vendor is launching a Growth Accelerator program specifically for storage. Growth Accelerator programs already exist for HPs Imaging and Printing Group and for the Enterprise Servers and Storage products that fall within HPs Technology Solutions Group, LaRocca said.

HPs Growth Accelerator program sets yearly sales growth targets for HP resellers based on what that partner sold last year plus "reasonable market growth," he said. If partners reach or exceed that target, they are given rebates, which HP uses to encourage partners to sell more HP products. LaRocca said that by cross-selling and upselling, VARs stand a better chance of reaching their target. He said HP also plans to introduce a Growth Accelerator program around its services offerings, although he declined to go into further detail.

The programs enhancements will take effect Feb. 1, 2008, the first day of HPs fiscal second quarter.

Brian Roth, vice president of sales for HP solution provider Trilogy Solutions, welcomed HPs focus on storage. Because his company already focuses on the storage market, Roth said it wont need to come up to speed on HPs storage solutions.

"Anything HP can do to help me make money on the back end, such as rebates, is a good thing," he said, adding that larger rebates and an increased focus on storage mean that deals with his current customer base will be more lucrative.

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Combined with the existing ESS Growth Accelerator program, LaRocca said the additional storage-focused program will encourage more ESS sales for HP, an area the vendor struggled with in fiscal 2007.

"We wanted to create investments and incentives so that our partners would sell ... more storage products for us," he said.

However, a New Jersey-based HP partner who did not want to be named said the storage focus wont help solution providers or HP drive revenue, no matter what the incentives.

"If you werent able to sell [storage] before, then no incentive in the world is going to make that sale," he said, adding that other storage vendors, such as EMC, offer higher margins than HP does. "Why would I push the HP products when I can make 20 percent on an EMC sale and only 12 [percent] on HP?"

HP also is introducing new incentives for partners focusing on government markets to encourage further growth of that vertical market, LaRocca said. Partners who generate 70 percent or more of their business from the government market will receive an Elite status, he said, which means higher compensation if they meet growth targets. Government Elite partners will be assessed yearly for eligibility, and if they do not make their goals, he said, they will lose their Elite status.

The company also is streamlining its Attach Plus compensation program, which currently pays partners higher rebates for bundling more HP products in every sale. Solution providers will be compensated on every dollar sold, instead of the previous "stair-step" approach, which only paid rebates when partners reached specific revenue targets, LaRocca said.

He said all the changes are part of HPs move to simplify how its channel partners interact with the technology giant, and to make it more lucrative for partners to sell products and services across HPs entire product portfolio.

"We know it can be hard to do business with us sometimes, with so many product lines and businesses," LaRocca said.

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