Observers See Potential for Channel Conflict in HP/EDS Deal

While many Hewlett-Packard partners view the planned purchase of EDS as potentially positive, whether the deal will be beneficial or create conflict will hinge on how well HP integrates the acquisition.

If HP mangles the integration, channel conflict is sure to ensue, observers say.  But with HP's strong reputation with its channel, it is natural to "expect them to do the right thing for their channel partners," says Charles Watson, senior vice president for sales and marketing at Blueroads, a partner relationship manager/partner opportunity management platform vendor.

But to mitigate the potential for conflict, Watson recommends strong rules of engagement and transparency. Things like named accounts and defining the role of the channel by market segment could go a long way toward making sure channel conflict doesn't become a problem, Watson says. Beyond the channel conflict worries, the deal could be good news for partners.

This could give them "access to the ultimate [partner-to-partner] resource," he says. "They can now work with their vendor as a strategic implementation resource. For example, if a partner needs an implementation resource in Guadalajara to win a contract, they can pass that portion of the deal to the EDS professional services team, whereas before they might have been forced to go and find a potentially competitive partner and risk the deal."

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Those EDS resources may be useful to HP partners in other realms too, Watson says.

"EDS could 'loan' an insurance industry expert to a partner for a big deal at State Farm, a resource that no other partner might have," Watson says.

Tiffani Bova, a Gartner vice president for research, said that while the deal could indeed provide more opportunities for partners, it could also take some opportunity away.

"Those partners which are focused on the enterprise and provide consulting, development and integration services as well as outsourcing on HP products either alone or with HP will be the ones most impacted if HP chooses to leverage EDS resources to now provide that service," she says. However, "opportunity for HP partners will be that the current business EDS does with other vendors most likely will be transitioned over to HP," from vendors such as Sun.

But partners focused on the SMB space will have little to worry about since that is not a space that EDS has pursued, Bova adds.

With EDS out of the picture, there will be a lot more room for independent service and consulting providers to make inroads in the marketplace, according to Axel Schultz, channel veteran, founder of start up channel social networking site Xeequa, and author of the new book, "Channel Excellence." 

In addition, he said, the deal may also HP's smaller competitors a leg up too.

"HP's never-ending quest for better channel alignment will get another huge hit – providing new ways for channel-only manufacturers like Acer to grow even faster," Schultz says.