Last month, SearchITChannel caught up with Scott Dunsire, Hewlett-Packard Co.'s vice president and general manager for Americas Channel with the Printing and Personal Systems (PPS) Group. This month, we take a closer look at the other side of the house, the Hewlett-Packard (HP) Enterprise Group and its channel chief, Terry Richardson, vice president of U.S. sales at HP.
Since the interview with Dunsire just a little over a month ago, there has been yet more change at the top. The head of the HP Enterprise Group, Bill Veghte, created a new position and appointed Sue Barsamian as senior vice president of worldwide indirect sales. No newcomer to the organization, Barsamian is a 25-year veteran at HP.
The HP Enterprise Group's fortunes have been on par with those of the PPS Group and the Enterprise Services Group. In the third fiscal quarter, the Enterprise Group had a revenue decline of 9% year over year. Networking revenue was flat for the group; server revenue was down 11%; business-critical systems revenue was down 26%; storage revenue was down 10%; and technology services revenue was down 7%. Seventy percent of HP's worldwide revenue goes through the channel.
Richardson is one year into his tenure as channel chief. We talked to him about channel partner sentiment as HP continues to steady its course.
Richardson joined HP in 2010 as director of OEM sales, where he helped drive storage sales through the channel. Prior to taking his current position in September 2012, he served as vice president of U.S. storage channel sales at HP.
Can you address the executive changes at the Enterprise Group?
Terry Richardson: There were two primary changes. The first big one was Bill Veghte replacing Dave Donatelli as the head of the Enterprise Group. For channel partners, the good news is that because Bill was formerly the chief operating officer, not only did he understand HP, but he was the core architect of the overall strategy of the company and very in tune with the strategy of the Enterprise Group.
So from a strategy, product growth direction, it's full steam ahead [with] no change at all. The reality is that we have a product portfolio that Donatelli managed that's in excellent shape and has never been better or richer. Where Bill will drive a lot of focus is on our route to market and how we optimize things inside of Enterprise Group to make it easier for partners to do business with HP. He's meeting with partners to understand what's on their mind. … I think he'll be a very visible executive in the channel.
The most recent change within Enterprise Group is the naming of Sue Barsamian. She's a strong, proven leader with a nice balance of strategic and operational skills. She will continue to do the things that will accelerate our indirect growth around the world. She's a really good advocate for the partners and those who have been clamoring for simplicity. Sue will also take a broader view of distributors and the synergy of the distributors we do business with around the world.
What are the current challenges for HP Enterprise Group?
Richardson: In no order of importance … it starts with competition and the competitive market. HP enjoys a pretty strong position in most of the market segments that we play in, but all are highly contested and we've seen some aggressive competition. We have been market share leaders in the server category and we have a lot of people trying to take share from HP, contrasted to our position in networking and storage, where we're not No. 1, but we're trying to grow aggressively to gain market share.
Internally, we have some challenges with the size and scale of HP, and we hear from our partners that we're a large and complex organization -- and we are.
Terry Richardson, vice president of U.S. sales, HP Enterprise Group
Internally, we have some challenges with the size and scale of HP, and we hear from our partners that we're a large and complex organization -- and we are. We got a good start this year on trying to streamline the resources that we assign to any given partner. But we still have work to do on some of our business processes and some of the tools available to channel partners, especially for configuration and quote, and our portal. These are on the list of planned investments but are not yet delivered.
The third challenge is delivering profitable growth for the company. That's a statement that holds across HP as you follow where we are in the multi-year turnaround strategy that Meg Whitman laid out. We're looking forward to FY14 as the year we really start to drive growth and until we deliver that, it remains in the challenge category.
How has your first year in this position gone?
Richardson: First and foremost, I'm really privileged to lead this organization for HP because we have some phenomenal partners. It's a large and diverse channel community and a tremendously strong group. I'm also pleased to have a really strong team in my channel organization so these two things made it a good first year.
I say this recognizing full well that there's a lot more to do. I laid out a couple of big goals at the start of [the] year. In one of my first conference calls with the channel, I tried to summarize my strategy and guiding principle in nine words: Make it predictable; make it profitable; make it simple. That's where I was going to focus my efforts and my team's efforts and how I'd advocate inside of HP on their behalf.
As I look over the past 11.5 months, we've made good progress on those three goals; on two of [the three goals] we've made substantial progress. On the predictability goal, we've greatly improved field engagement across all of our businesses. So when partners are in the field hand in hand with our HP field reps, that's been a very good experience. We also formalized our rules of engagement earlier this year, and that's gone a long way in improving the customer experience. We'll continue on that in the new year because I know that we can even do better.
On the profitability side, an area that you can imagine is very important to partners, we've made good progress, particularly around changes that we made to the PartnerOne program and how it benefits partners. We have a simpler and more predictable compensation plan for partners as to how they make money with HP. And, we continue with our goal of having the most profitable partner program in the enterprise segment of the business.
Each of the business units, throughout the year, offer incremental incentives to help drive more margin to channel partners who are doing the types of things that we want them to do. Whether it's an incentive for winning over certain competitors, or selling certain products, as we went through the year we looked for as many ways as possible to drive more profitability through the channel.
On the simplicity side, we did some good things relative to PartnerOne -- making that simpler, with no caps or gates associated with our benefits program -- but we're still not done yet in the area of tools or process. The good news is that we stood up Salesforce.com this year in the company. The tools and processes that we're going to bring out in FY14 are well-funded, but we didn't get them done this year.
What are the things you didn't get done that you're going to carry over next year, and what's new that's on tap for partners for next year?
Richardson: The carryovers [are around] being simpler to do business with, i.e. enhancements to the partner portal, improved pricing tools, deal registration.
For next year, [my] overall goals … are to drive accelerated growth above market rate; take share of wallet across the servers, storage and networking categories. One thing that the partners will see in the new year is a very specific focus by HP to generate demand for partners. We're making changes to the orientation within our call center in Arkansas. There'll be an enhanced team whose job will be to drive, generate leads and pass opportunities to partners.
[One] other announcement that was made at the time of the Bill Veghte appointment that didn't get as much play: We elevated Henry Gomez to take over all of marketing in addition to communications. The company laid out very explicit instructions that the reason [Meg Whitman] made that change was in a large part due to, what she believed was, a lack of focus on driving awareness and creating demand of HP in the marketplace -- and by extension of driving demand for HP products, solutions and services for channel partners.
So we're working now and we'll be launching on Nov. 1 new programs that drive demand for our channel partners to help drive the accelerated growth that we're looking for.
The other thing that we'll start to go public on is a focus on converged solutions. What Dave Donatelli introduced and what Bill Veghte is continuing is a group that's being led by Tom Joyce to focus on converged systems and solutions. So we'll bring to market new solutions that are really focused around the big bets that HP is making. There'll be converged infrastructure solutions, cloud-based solutions, [and] big data solutions. [They] are going to be really well-timed and well-thought-out with the channel in mind because many of our partners already do or have a great appetite to do more with HP in the solutions category.
We already announced the enabling software that we call OneView -- a common management platform across our infrastructure products … and we'll be delivering that in addition to these packaged solutions, and that will be done with the channel in mind.
My [last] area of focus is to make sure we have a very clear and articulated strategy around our services business in the channel. We have our ServiceOne program, but we want to do some things to bring more clarity of the opportunity for our partners to participate in service delivery for and on behalf of HP.