Hewlett-Packard Co.'s recent growth and leadership changes have exacerbated existing partner program problems, according to several VARs.
HP acquired 3Com Corp. for $2.7 billion in April and followed up that deal with a $2.35 billion 3PAR acquisition in September. The company hired a new channel chief, Stephen DiFranco, in March. And in August, CEO Mark Hurd resigned in a scandal, replaced by former SAP CEO Leo Apotheker in October.
Some longtime partners said HP -- the self-proclaimed world's largest IT company -- seems unmoored and dysfunctional. And several cited issues between the HP board and top executives, a rift that played itself out with Hurd's departure but goes beyond that one incident.
These partners maintain that, because of HP's sheer size and a perceived lack of leadership, cost cutting is too much of a priority, and that has hurt the company's reputation for having a strong partner program and innovative technology.
"HP's now the biggest kid in IT, and they're becoming a bit of a bully," said Daniel Duffy, CEO of Valley Network Solutions Inc., an HP partner in Fresno, Calif. "With great power comes great responsibility, and they've forgotten that."
HP leadership questions
A longtime HP Elite partner on the East Coast, who spoke on the condition of anonymity, voiced similar concerns and said they go beyond the HP partner program itself.
Since Hurd left, it's been a vacuum, and vacuums suck.
New England-based HP partner,
"HP has some serious problems at the top, other than Hurd, although that situation was symptomatic of dysfunction between the HP board and the management team," this partner said. "There were a lot of people at HP unhappy with Hurd because after he stopped slashing costs and acquiring companies, there was no growth strategy. Growth is tough for everyone, but especially tough if you're that size."
Another HP Elite partner in the Midwest said the silence from the top after HP hired Apotheker was jarring. That anxiety wasn't helped by a video message Apotheker sent to partners two weeks ago, this partner said.
"He said all the right things, but he read it," the partner said. "It was scripted. You could see his eyes moving right to left. I'd rather hear a few sentences from the heart than a speech. And he waited way too long [after his hiring], which fed uncertainty about the new leadership."
Hurd, on the other hand, was notorious for regularly answering VARs' phone calls and email.
"We had a closer relationship with Hurd, and he was always there for us, whether it was by email or phone," said Dave Dadian, CEO of powersolution.com, a Ho-Ho-Kus, N.J.-based HP partner. "Apotheker hasn't made the same type of attempts to contact us as Hurd did. He's more low-profile, which doesn't hurt but doesn't help us either."
Other VARs said the differences between the two CEOs are more glaring and are the cause of most HP partner program problems.
"The new CEO is inwardly-focused and he hasn't been very reassuring to partners," Duffy said. "Hurd would go out and personally visit resellers. Now there is almost no engagement."
The New England VAR put it more bluntly.
"Since Hurd left, it's been a vacuum, and vacuums suck," he said.
To be fair, Apotheker was named HP's CEO in October and was immediately besieged with legal issues surrounding Oracle's lawsuit against SAP. Apotheker had been CEO of SAP.
VARs say HP partner program is rigid, lacking support
A lack of technical support from HP is a major problem for VARs, as is the vendor's apparent refusal to make necessary adjustments to the HP partner program, Duffy said.
"[HP keeps] asking for more and more in sales but offers less and less in pre-sales technical support to make the sales a reality," Duffy said. "Other companies, like Microsoft and Symantec, listen and adjust to partner needs by retooling partner programs and meeting with individual companies."
HP doesn't take a broad look at the highs and lows of the economy, Duffy added. "The folks in charge there would rather lose business than roll up their sleeves to do the hard work to solve real problems that inhibit sales," he said. "This is disappointing treatment when you consider we've gone from a $0 HP account to doing several million in HP sales with a multiple Elite status. But sales have declined in the last year due to the economy, and it may be that [HP] sees partners as [only] good as their last sale, rather than taking a long-term, big picture view of things."
Several HP partners at various levels said the company has simply become too large to deal with efficiently, despite its annual efforts to fine-tune and hone its massive partner program. A mid-Atlantic VAR said the HP partner program changes have not been good for business.
"I'm not sure what their story is anymore," this partner said. "The partner program seems to be disconnected from the outside world, and they're focusing on larger companies and less on SMBs."
Defending the HP partner program
But there are those who disagree. Dadian said he has no issues with the HP partner program, and he doesn't believe small and medium-sized businesses like his are being pushed to the back.
"[HP is] always on the ball, and any sort of problems are promptly addressed," Dadian said. "Honestly, we eat, drink and sleep HP."
Rick Chernick, CEO of Camera Corner Connecting Point, an HP Elite partner in Green Bay, Wisc., said he does not worry that HP is too big.
"The size of the beast can help you, but there are a lot of people," he said. "And if your most important area is storage, you better get to know the [enterprise storage and servers] people. If it's laptops, find the [personal systems group] people. If you don't know the right people, you'll suffer. I don't care which vendor it is."
And Mark Gonzalez, CEO of Nth Generation Computing, a San Diego-based HP VAR, said HP has done a good job integrating 3Com products into its networking portfolio and growing its overall networking business, especially compared to Cisco Systems.
HP partner program leader responds
DiFranco, HP's new channel chief, acknowledged that working through changes in a company of HP's size takes time and requires patience. In an interview, he said HP has made a lot of progress, citing the ProCurve and 3Com networking business unit, which is now rolled into the overall PartnerOne partner program.
The 3Com and 3PAR acquisitions posed particular issues because both companies had a direct sales focus, at least in the U.S., DiFranco said.
"We're doing a lot of things and doing them in as orchestrated a way as possible … working through channelization across business units … every one of which has different business issues, and we're attacking the ones that are most critical first," he said.
DiFranco also pointed out that the sales leaders of all five business units now meet with him quarterly to set HP partner program objectives, which never happened before.
The East Coast VAR is all ears when it comes to learning about new channel efforts from HP -- which will host its big Americas Partner Conference (APC) in late March.
But, this VAR said, the the fundamental problem is that "HP continues to retain the ability to sell direct and they do that whenever they want to. HP continues to flip-flop and go both ways to the market. Either sell direct or don't sell direct, don't 'kind of' do it. If you tell us you're going direct or non-direct, we will then make a business decision for ourselves."
Dig deeper on Technology Vendors-OEMs