HP channel partners welcome new rules to avoid channel conflict

HP channel partners say the company's new rules of engagement are a good step toward overcoming channel conflict with HP's sales teams.

LAS VEGAS -- Craig Sehi, co-owner of Michigan-based Sehi Computer Products Inc., said that HP's new "rules of engagement," which outline acceptable and unacceptable behavior for the company's salespeople, are a welcome relief and a sign that HP is listening to its resellers.

There was a huge echoing of that sentiment Tuesday among partner attendees on the opening day of HP's Global Partner Conference here.

Sehi's No. 1 reason for attending the partner conference was to hear about the future of the channel at HP -- or more specifically, how HP is going to handle its direct and indirect channels. "HP has to support us, not compete with us," he said, noting that it's the partners who have the customer relationship.

Fred LaCava, HP sales manager at Softmart Inc. in Downingtown, Pa., put it more bluntly: "Don't steal our business," he said.

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HP is Softmart's No. 1 hardware line, accounting for $30 million in annual revenue. LaCava has been doing business successfully for the past 15 years, with the company's core accounts in the 750- to 3,000-seat range.

Unfortunately, the partner has lost business opportunities to HP a significant number of times in the past six to seven years, said LaCava, who pointed out that traditionally, HP takes 50% of its business direct. "This hurts the channel. HP has to make it more of a priority to commit to its partners," he said.

That was the message HP tried to drive home over and over again at its partner conference. Noting the theme of this year's conference -- "We mean business" -- Sue Barsamian, senior vice president and general manager of global sales and operations with the HP Enterprise Group, noted that 67% of HP's business -- accounting for $45 million in revenue -- is with the channel and is growing.

Meg Whitman, president and CEO, said in her opening address at the conference on Tuesday that the company has heard the HP channel partners and has taken action to eliminate the complexity and uncertainty of doing business with HP.

More directly, Whitman said that the company will not tolerate salespeople who take business away from the company's indirect sales channel. "We've made that crystal-clear to our salespeople that that behavior is not acceptable," she said.

This week, HP introduced a formal set of rules of engagement for the Enterprise Group in the U.S., something it's never had before, according to Terry Richardson, vice president of U.S. Channel Sales for the group. The company already has rules of engagement within the Technology Services group.

Richardson highlighted key points of the rules of engagement:

  • Partners are not restricted from selling to any account in any customer segment. However, the joint-selling HP-led segment -- which includes fewer than 100 global accounts in the U.S., commercial accounts and federal business -- typically has an HP field rep involved in the account strategy.
  • The midmarket; SMB; and state, local government and higher education, or SLED, business segment will be 100% indirect, which is a significant change for HP.
  • The company's opportunity registration policies govern behavior. If HP accepts a partner's registration, the company will not sell direct on that opportunity.
  • There is a "value express pricing" program, where HP channel partners will be rewarded for the value they provide.
  • In the channel-led segment, the company is also making a commitment in its Conway, Ark., call center to do a better job of tracking metrics and passing leads to partners. Partners will be engaged in a lead no later than the second call. Once engaged, the lead becomes the partner's business and HP will work collaboratively with the partner.
  • There will be mandatory training on the new rules; they will be posted on the company's partner portal, and there will be disciplinary actions for not adhering to the rules of engagement.

Is this enough for partners?

“[It will be] If HP’s sales guys get the message,” Jack Mele, vice president of sales at Data Impressions, a DI Technology Group Inc. company based in Cerritos, Calif., said, adding that corporate edict doesn’t always trickle down the way it should.

In other words, time will tell.


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