HPs Partnerone Has the Right Stuff

Channel execs banking on plan to expand HP services, offerings.

Boy, what a difference a year makes. Make that six months, rather.

It wasnt that long ago—the end of last summer, as a matter of fact—that I was harshly criticizing Hewlett-Packard for strong-arm tactics when dealing with its channel partners and giving them what appeared at the time to be ultimatums regarding committing more business to the vendor.

Well, since that time, it looks like the channel executives at HP have rolled up their sleeves and really thought through how the company can get solutions providers to willingly expand their HP services and offerings.

It is not an easy task, to say the least. Getting vendor-neutral VARs to invest time, money and resources into pushing your products over another vendors is like walking a tightrope.

After speaking last week with John Thompson, vice president and general manager of Solution Partners Organization-Americas at HP and Tom LaRocca, vice president, Partner Development Programs at HP, I came away feeling as if HP has put together a winning formula to keep its largest solutions providers committed while gaining more loyalty from its lower-tier partners.

HP has revamped its PartnerOne program, including changing the membership criteria, updating marketing program changes and altering the rebate formula to "Attach Plus."

The changes go into effect Nov. 1 and are designed to increase the number of platinum-level partners while making it easier for others to obtain gold-level status.

"I think what it does is that it provides an opportunity for partners to engage with us and grow their business," Thompson said. "It allows for a rollout of what we believe is the next generation of style of partner programs."

Some of these innovative features include paying solution providers market development funds upfront instead of after accruing credit with the vendor.

This, to me, is big because it will allow VARs to be more proactive in investing in new growth areas instead of being reactive and looking to get money back that was already spent.

Other features include lowering the revenue bar for platinum partners and basing this level solely on revenue dollars associated with HPs products and services instead of the combined criteria of revenue amount and training and certification levels.

While HP easily could have booted these solution providers down to gold status and hope they do more business with HP to reach platinum again, the vendor decided against that.

The only potential bump in the road I can see here is that HP will now pay what it is calling an "Attach Plus" rebate to its channel partners on a quarterly basis instead of the "Membership Rebates" its channel partners were receiving on a monthly basis.

This may take some financial adjusting on the part of some channel partners, but, as long as they know the money is coming, it shouldnt be an issue for most. Besides, the upfront MDFs (market development funds) should more than cancel this out anyway.

"There are lots of benefits to this new program," Thompson said. "The bottom line is we think its a program that is unique in the industry and that no one else can really touch. We want our channel partners to be able to leverage the broad HP portfolio that we have."

I agree. I believe HP is onto something here. Its a vexing problem to come up with a strategy that rewards the big guys for their loyalty but encourages and supports the smaller guys at the same time. These enhancements certainly seem to do just that.

Elliot Markowitz is editor at large at The Channel Insider. He is also editorial director of Ziff Davis Media eSeminars. He can be reached at elliot_markowitz@ziffdavis.com.