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Impact of the HP split on channel partners

Find out what the plan is for HP's channel program following the separation of the company into two discrete businesses.

As one big IT company, Hewlett-Packard Co. executed against two big market agendas: one that focused on an enterprise market agenda and another focused on the printer and PC market agenda. For several years IT industry experts questioned whether bigger was better as HP struggled to turn around its sinking fortune as a tech giant. Today, with the announcement that the company will separate the  Printing and Personal Systems (PPS) Group and Enterprise Group (EG) into two distinct companies, the question for HP channel partners is how the HP split impacts them and how it translates into business opportunity for them.

HP has spent the better part of two years trying to do right by its worldwide network of channel partners banded under the PartnerOne program, which boasts about 100,000 partners. HP has worked hard to minimize channel conflict and make it easier for partners to do business with the company by restoring confidence, simplicity and consistency. Will today's announcement of the HP split rock the foundation that HP has been building with partners?

No, according to HP channel executives Sue Barsamian, senior vice president of indirect sales for the Enterprise Group, and Jos Brenkel, senior vice president channel sales with HP PPS. In fact, channel partners can expect business as usual for the next 12 months as HP splits into two separate companies, Brenkel said. The move is expected to be completed by the end of fiscal 2015, according to HP.

Brenkel refers to this 12-month period as Phase 1. "Phase 2, as we separate into two companies, we're going to take the programs that we have today and make sure that they are fully aligned for both companies. We do not intend to change them in structure on either side. We'll keep the PartnerOne structure, the capabilities will stay the same and we'll in some way duplicate them," Brenkel said.

Barsamian noted that she's already heard from partners that they want HP to move forward rather than backward with the gains the vendor has made with PartnerOne simplification, on-boarding of new partners, the recently introduced HP Unison platform, etc.

"Partners are saying, ''Don't make this transition hard on us because we want to focus on our business,'" Barsamian said. "The good news is that Jos and I together are very focused on that," she added.

While HP says the structure of the partner program will remain consistent, whether or not changes are made to any elements of the program -- for example, the partner tiering (Platinum, Silver, Gold), the capabilities, the sales plays, the certification program, all of the assets that HP created for the channel -- remains to be seen.

It must have been very difficult to wrangle a value proposition and program elements for the very different channels (PPS versus Enterprise) into one overall program.
Diane KrakoraCEO of PartnerPath

Brenkel said that HP does not intend to lose any of these capabilities as it moves through the process of separating the HP businesses.

The separation means the formation of two companies: HP Inc. will focus on personal systems and printing (desktops, notebooks, workstations, tablets, thin clients, retail point of sales and all printing devices). Hewlett-Packard Enterprise will focus on data center, infrastructure, software and services for the new style of IT, according to the vendor.

Today, HP has 100,000 PPS partners and 90,000 enterprise partners with overlap in the two camps, according to Barsamian. These partners often have different teams driving PCs and print versus data center and enterprise and often deal with discrete contacts within each segment at HP as well.

"I just got off of the phone with MCPc, a Platinum partner based in Ohio that spans both the PC side of the house and the enterprise side of the house. [They] told us they're excited about today's news because they want to see better coordination on data center and infrastructure, software assets, and cloud assets, and they think that this signals that we're going to be easier to work with, in terms of the way that these three areas come together, which is certainly our intent," she said.

Industry sentiment is that with the separation of HP into two companies, HP partners will benefit in the long term. "It must have been very difficult to wrangle a value proposition and program elements for the very different channels (PPS versus Enterprise) into one overall program," said Diane Krakora, CEO of PartnerPath. "The requirements around training and incentives on discounts, deal registration and volume rebates are very different for channel partners [spanning the likes of] Staples and Accenture," she added.

In the short term, change also ignites confusion, doubt and fear. "The faster HP can figure out the split around channel people and programs, the better it will be for partners," Krakora said.

Regarding HP channel executives and the division of HP as we know it today, the leads in each area of the business, will remain the same, with Scott Dunsire, PPS North American channel chief and Brenkel focusing on worldwide PPS channel, according to Brenkel. Dion Weisler will head up HP Inc. as president and CEO.

Barsamian said that the structure of EG partner leadership will remain consistent going forward. Today, Terry Richardson is vice president of U.S. sales for the Enterprise Group at HP. Meg Whitman will be president and CEO of Hewlett-Packard Enterprise.

Next Steps

Learn more about HP's refocused approach to PC sales

Find out how HP hopes to better compete against IBM for a larger slice of the enterprise pie.

CIOs react to HP split: What took so long?

Dig Deeper on Channel partner program news

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