Hewlett-Packard (HP) says it is opening up more services, formerly direct-delivered, to partners.
"It's obvious to us that many partners look to grow their businesses through services and deliver more services sometimes under their own brand and sometimes under the vendor's brand," said Jo Ann Redding, vice president of channel services sales for HP Services Americas.
The goal of opening up more HP services to the channel is to ensure better, faster service and geographical coverage for customers as well as creating more partner opportunity and revenue.
HP Services is running pilot projects where managed services as well as business continuity and recovery services (BCRS) are packaged for partner delivery. The pilot is customizable to adapt to situations where the customer applications are hosted by HP, by the partner or by the customer, or even some combination.
Another pilot targets partners with SAP expertise. "If those partners need offshore resources for application development, they can now resell HP's own SAP offshore resources," Redding said.
"If a partner is helping on a large SAP implementation, they will probably need some resources. HP has cost-effective and skilled offshore resources that can now be resold like other HP services," she noted.
The company is also adding more service offerings to its lead generation program, and HP's marketing material on those services has been updated to include the new services. Partners can use that campaign marketing material for their own businesses.
HP Services makes maintenance contracts a partner opportunity
In one example of offloading what had been direct services work, HP has been migrating the maintenance management of 750 midmarket customers to partners, usually HP Services Elite partners, Redding said. In the U.S., there are about 50 or 60 such elite partners, which tend to be enterprise-class partners that have invested heavily in HP.
Those contracts represent about $25 million in business over 12 to 14 months, she said.
HP Services employs more than 60,000 people worldwide, but it does not break out how many of those employees work directly with customers and who work with channel partners on delivery.
Solution providers see services as a higher-margin and longer-lasting revenue generator than product sales, although many of them still rely on margins on product sales.
HP partners said they have seen the vendor opening up more services opportunities for the past year and welcome the business.
Neil Fitzpatrick, director of indirect sales for Logicalis Inc., a longtime HP partner, said the company has done a good job bringing partners into maintenance and service opportunities.
Logicalis was involved early in the maintenance migration program, dubbed the "Atlantic Project." "We've seen growth both in incremental additional customers and a significant bump in revenue," Fitzpatrick said.
The Dublin, Ohio-based services partner is also participating in the BCRS pilot, which Logicalis calls "Operation Clean Sweep," and sees major opportunity there. "The primary objective is to look at the customer environment -- running HP enterprise servers -- and look for disaster recovery upsell opportunities and make sure the customer is covered," Fitzpatrick said.
Pete Busam, vice president and COO of Decisive Business Systems Inc. in Pennsauken, N.Y., said his company has already taken over management of Care Pack services that HP had been managing. Care Packs are HP-branded service bundles.
"They took the customer and referred them to us. We take all the calls now and they get a warm greeting from us rather than an auto attendant," Busam said.
Dave Dadian, CEO of Powersolution.com, based in Ho-ho-kus, N.J., likes the sound of these moves. "We sell Care Packs with our server deployments for the hardware. We're a small partner, but as more services are available through partners we might be catching some of that."
Technology vendors are striving for ways to build partner services expertise in order to keep their channels healthy. But, since they often field their own considerable services team, they also have to worry about channel conflict already common in product sales from spilling into the services arena.
HP is not alone in bundling services into partner-delivered modules. On Monday, IBM expanded its Express Advantage lineup for midsized companies with Information Protection Services, IBM's first move into on-demand data protection. IBM's offering built on its acquisition last year of Arsenal Digital Solutions.
The fact that even enterprise-focused vendors see more opportunity in smaller businesses plays to solution providers' strengths. Not even the largest vendor service organization can reach all those accounts, especially when system integration or customization is needed, partners said.
"I think there is a significant shift … among all the vendors to be a little more channel-friendly," Logicalis' Fitzpatrick said. In the midmarket space, "the vendors just don't have the resources to call on all of those customers. We're local in many of those markets; we can go on-site, sit down and map out a solution," he said.
"Partners need and want to get away from being dependent on the resale business. You can't make a living flipping boxes," said Janet Waxman, vice president of hardware channels research for IDC.