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HP PartnerOne adds more products to deal reg, tries to ease channel conflict

Hewlett-Packard continues to finetune its PartnerOne program, putting more of its acquired products under deal registration for its channel partners.

Starting November 1, more of the company’s ISS servers — including one- and two-way servers from the 300 Series on up — will now be eligible for deal registration as will TippingPoint network security products, said Mike Galane, senior director of marketing for HP’s solution provider organization (SPO). The 3Com networking hardware products portfolio was added to deal registration earlier this summer.

Putting more HP tech eggs in the PartnerOne basket

The inclusion of more HP servers and networking into deal reg could help resolve one nagging concern among HP VARs: Poaching by CDW and other direct marketing IT providers.

Many hardware VARs — the problem goes beyond HP — moan that they’ll spend weeks or months doing pre-sales work and education in an account only to lose that deal to a CDW telemarketer that happens to call the company at the last minute. They say they end up losing that business based on cost alone, and are not compensated for their high cost of sales.

Deal registration is meant to prevent such poaching. All deals must have a “services component” to be accepted, Galane said. Once the deal is approved, the VAR will get the best discount price available in order to prevent a large direct marketer from undercutting it.

“The way this is supposed to work is the guy who does the work gets the recognition. These are long sales cycles and mail order companies go through the phone book, cold calling businesses. Some of that has been fixed here but we have to fight that fight constantly,” said Rick Chernick, CEO of Camera Corner/Connecting Point, a long-time HP VAR in Green Bay, Wisc.

“As we’ve been saying for 100 years, help the little guy get competitive with the big guy,” Chernick added.

Direct marketers like CDW will be able to attain their own HP “Elite” status, however. “That’s important and partners understand this. A lot of customers request quotes from Elite partners,” Galane said. But Elite Direct Marketers will be branded as such, to differentiate them from the more traditional service-oriented VARs.

“We award registration based on what we believe is the right partner to be in the deal and once that registration is awarded, other partners can only compete for that business at contractual prices,” Galane said. “Someone can’t show up at the 11th hour and trump a hardware deal with free software.”

The fact that HP partners now have a bigger pool of IT products to  register deals for is important. A lot of one- and two-way servers sell. An accepted deal registration protects the partner’s bid. In addition, partners that earn a converged infrastructure Elite badges in virtualization, networking, service sales and storage, will earn additional margin on their deals. Partners put top-level margins at a range of 6% to 8%. HP would not confirm that but said those figures were in the ballpark.

HP is putting more emphasis on its year-old Converged Infrastructure or CI Elite to mirror its product focus on combined server/storage/networking sales into data centers. Romi Randwaha, CEO of HPM Networks, a Fremont, Calif.-based HP partner said the CI designation is important to his business. While customers may not ask for converged infrastructure, many will be surprised to hear that they’re already on that road, he said.

Most companies want bids from a few vendors on many pieces of their infrastructure, but many of them may, without consciously thinking about it, standardized on one.

“One client, a credit union, just realized that its running HP clients, HP storage, HP servers…converged infrastructure was not their intent, but they’re already on the road and we can help him implement the software to tie all that together,” he said.

HP is helping VARs like him move their pitches upstream to higher-level executives at customer accounts. In the past a different administrator might specify servers, another storage, another networking, but those decisions are getting pushed upstairs in the interest of cost savings, VARs said. “We’re targeting both CIOs and CFOs to give them the converged infrastructure story. If they bite into it, we still have to go through the proof of concept. From the server standpoint there aren’t a lot of challenges with HP but on storage thereare more.” Now that HP has 3Com on board, there’s also less push-back on networking, he said.

Streamlined PartnerOne deal registration

HP’s deal registration process, criticized by some partners as unwieldy, has been streamlined.

With the old system, partners had to negotiate 11 processes and that’s gone down to five from the time they get into the tool to submit the deal to completing the application, said Matt Smith, director of for HP’s SPO group.

The overall goal of this revamp is to bring both new HP products into the PartnerOne fold as well of some legacy products — like software — that used to fall outside of the PartnerOne structure, Galane said.


***: HP named SAP veteran Leo Apotheker CEO; brought in former Oracle president Ray Lane on to board.***

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