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HP tailors channel program to help partners manage specific markets

HP updates market development tools, partner management outsourcing relationships and marketing arrangements to match niche players and VARs moving up the partnership ladder.

The broad range of Hewlett Packard's products is its greatest asset to customers, but it is also the greatest challenge to its channel partners and to HP's effort to support them.

To try to keep up to speed, however, HP regularly updates its PartnerONE program, which just celebrated its fourth anniversary. The changes are designed to focus the benefits of the program most closely to the types of business in which partners are engaged in each market segment.

"We sell lots of products, services and solutions, and we want to make it as easy to partner with HP as we can and help the channel to understand what tools are available," said Tom LaRocca, vice president of partner development and programs, HP Solution Partners Organization – Americas at Hewlett Packard Co., in Palo Alto, Calif.

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"With the program changes, we want to promote the growth goals and growth plans of our partners in our printing business, enterprise storage business and enterprise server business."

One of the changes was the appointment May 2 of Adrian Jones -- a veteran of the storage and small and midsized business (SMB) markets -- as head of Solutions Partners Organization -- Americas. His main responsibility, according to a statement released at his hiring, is to help drive share growth in the midmarket. LaRocca will report to him

Hewlett Packard's partners, meanwhile, especially its largest, said the company has a strong program that can only be made better by such enhancements. "What really made HP one of our four core vendors is their channel program," said Dan Schinsky, vice president of enterprise solutions at Relational Technology Solutions, a solution provider based in Tampa, Fla. "There is loyalty on the HP side of the world, and a sense of community in that program, as well as the benefit of HP's position in the storage and mid-range operating environment."

Relational recently narrowed its focus to four core vendors, which includes a Platinum-level relationship with Hewlett Packard, as well as partnerships with Network Appliance Inc., Hitachi Data Ltd. and IBM.

Partnering with HP Now

HP splits its partner program into three levels: Platinum ($25 million in sales and above); Gold ($5 million and above); and Business (less than $5 million). "The benefits are appropriate for each level and are determined [based] on how much the partner wants to invest," LaRocca said.

Top level partners get their support directly from HP, while smaller channel partners are supported by outside companies to which HP has outsourced the task of channel support.

"MarketStar is a partner we use that helps us manage and grow our partner base," said LaRocca. "We have, for the most part, HP-badged resources that cover Platinum and Gold. MarketStar works with partners once they get below those levels, and they do a very good job for us."

For some VARs, this support arrangement has provided for good growth. "We have been a progressive partner for some time and we experienced 1400% growth in 2005," said Timothy Aguilar, chief executive officer at Calculated Research & Technology (CR&T), a solutions provider in Orem, Utah. "We owed that growth to a sub-channel called MarketStar."

These same partners, however, complain that making the leap from Business to Gold can be tough -- and wish that HP would do more to get them over the Gold-level hurdle. "Although they did a good job, our growth plateaued because [of] the capabilities of MarketStar -- they didn't have the intellectual property to take us farther."

For larger resellers, which get to deal directly with HP, communication and support have not proven to be an issue. "We have always had very good contact at multiple levels within the HP organization," said Jim Fall, vice president of strategic planning at Cannon IV, a printing and imaging solutions provider in Indianapolis, Ind. 95% of the HP Gold-level partner's business comes from HP products. "I am a member of two of HP's reseller advisory councils, which allows them to gather feedback from resellers, present concepts on programs, products and processes, and gather our feedback."

Canon has an assigned account manager from HP, called a partner business manager (PBM), who is responsible for the overall business relationship. In addition, Fall added, the company is supported by product and market focus specialist.

Smaller solution providers, though, don't have access to these sorts of resources, which makes it difficult to grow, said Aquilar. "I'd suggest that HP should reevaluate the growth potential and qualifications [needed] to get support from a PBM," he added. "HP offers some benefits and key information, but then they don't provide all the tricks to being HP profitable."

Priming Partners for Growth?

The new partner program changes (requires partner login), which went into effect May 1, are designed to answer these complaints by tweaking the company's Elite training and certification program, evolving its AttachPlus incentives and adding a Growth Accelerator program.

"One of the things that HP is really working [to improve] is the feeling that it is hard to grow with HP," said Cyndi Privett, vice president, research, at Viewpoint Research, a market research firm in Scotts Valley, Calif. "There was a perception that, if you weren't big, there was no path to get there. Now, HP is starting to create a path for partners who may not have been on the radar in the past."

As part of the change, the company retired its Network Tool and has repackaged the Elite category as a standalone.

HP's Elite program provides certification and training for partners who want to specialize or build a core competency in any of several technologies. "HP does a fantastic job of training on the sales and technical front -- it is truly one of their strong suits," said Schinsky. "They push and strive to have the partner community be an educated extension of their community."

Click here to read part II of this story: HP partner program helps enterprise VARs expand downward.

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