HP tweaks partner program to boost storage, printer sales

With recent data showing HP's external disk marketshare slipping, a new channel initiative aimed at storage partners may be the medicine the doctor ordered.

Hewlett Packard Corp. is tweaking its PartnerONE program by introducing features designed to increase sales among its storage and printer partners.

The new initiatives, to be rolled out May 1, were outlined to journalists yesterday at the company's offices in Houston, Texas.

The changes include the new Growth Accelerator Program, in which rewards are given to partners who achieve a pre-set sales target. Paid quarterly, but revised annually -- to compensate for a deficit in any given quarter -- the program is designed to encourage sales among HP's partners in the Enterprise Servers and Storage (ESS) group and Imaging and Printing Group (IPG).

Tom LaRocca, HP's vice president, partner development and programs, said goals are set by adding last year's sales in a given quarter and market growth expectations.

"A simple example would be we will tell a storage reseller in 3Q '06 you did $100 in enterprise storage. We think that the market growth in storage for 3Q '07 is 3%, so I'm going to take $3 and add it to your $100 that you did last year so your goal in 3Q '07 is $103," LaRocca said.

As resellers get within 70% to 80% of their goal range HP will start paying their resellers with compensation increasing on an accelerated curve after the goal is reached, LaRocca said.

Rewards consist of financial benefits, lead generation, training, education and certification.

The new benefit is an adjustment to the Enterprise Servers and Storage Attach Plus program introduced nine months ago; the program was revised after resellers who were unable to meet their targets in one quarter would surpass their targets in the following quarter, often due to cyclical purchasing. Because of that resellers urged HP not to penalize them based on a bad quarter, but to base its incentives on yearly performance.

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With enterprise storage and server products having longer sales cycles than industry standard servers (ISS), partners also wanted HP to revise on the attach metric for ISS and revenue growth for ESS. HP partners said it would work better for them if the company tracked industry ISS attach as a separate metric from enterprise storage and server growth numbers.

"That way we don't have to worry so much about trying to get a server and a storage purchase order in the same quarter, they can just work to grow the business overall," LaRocca said.

Changes have also been made to the Attach Plus program for HP printer resellers. Under the new plan service sales associated with printers have been reassigned from the overall services offer to IPG. Service sales will join sales of accessories and hardware sales as part of an IPG reseller's revenues that will go toward the specific rebate.

Printer resellers will also be added to the New Business Opportunity program and will receive eligibility for rebates on qualified deals in certain non-named and public sector accounts.

HP is also changing its Elite Enhancements program paying partners incremental benefits when they sell into the small and medium market if they are an elite partner.

"Let's say I was paying them 2% to sell into the enterprise space, it might be 4% to sell into the mid-market space," LaRocca said.

The Elite Enhancements program has two areas, a technology track and a solutions track, and encourages its partners to become certified in several areas of hardware and software expertise, an achievement which gives partners greater rewards.

To broaden its offering HP is encouraging its reseller partners to become certified in one or more of six additional areas of software specialization. These include Oracle, VMware, Microsoft SQL, Microsoft Exchange, Open Source & Linux and High Performance Computing.

In the Technology Track HP has added System Builder Elite, otherwise known as mission critical services, and hopes its resellers specialize in systems such as high reliability applications.

Let us know what you think about this story; email: Nicole Lewis, Senior News Writer.

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