HP's Channel Chief Is Promoted Out of the ChannelBy Michael Vizard | Posted 2006-10-25 Email Print
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John Thompson is leaving the channel for a position in HP's Personal System Group.
John Thompson, the Hewlett-Packard channel chief for North America who brought a measure of stability to a tumultuous period in HP's relationship with channel partners, announced Oct. 25 that he will be relinquishing that post to assume the role of vice president and general manager for workstations within HP's Personal System Group.
Jim McDonnell, HP's worldwide channel chief, will temporarily assume Thompson's duties while the company interviews internal and external candidates to replace an HP executive who was instrumental in quelling a growing rebellion among HP partners following the introduction of a controversial HP PartnerOne program, which stressed revenue metrics and customer satisfaction over profit margins.
"John [Thompson] came in at a time with a lot of angry partners and with a president who also hadn't earned a lot of trust from the channel," said Jane Cage, partner and owner of Heartland Technology Solutions, in Joplin, Mo., "and he did the right things to build that trust."
Thompson is also credited with helping to implement "named accounts" and eliminate an outbound HP call center system where HP representatives underbid solution provider partners on product sales as he evangelized to HP executives that properly supported HP partners could effectively compete with Dell.
"One of the things that I am most proud of is that we reminded people of the power of the HP partner model to not only challenge companies like Dell, but also put them on their heels," Thompson said. "A lot more people today understand that the channel business is good business."
"He was a real a champion of the channel," said David Tan, chief technology officer of CHIPS Computer Consulting, in Lake Success, N.Y. "The channel strategy has shown tremendous improvement, and it has coincided with the entire company's turnaround. It's going to be very important that they continue to fill that position with someone who feels similarly. In the past, at HP, it has been back and forth on that commitment to the channel."
Under Thompson, PartnerOne program conditions evolved to became more flexible than the system he inherited for solution providers, making a bigger commitment to increase the attach rate of HP products associated with any given deal.
For HP partner loyalists, the terms of the attach rate program make sense, but others complain that it still provides too many incentives for HP salespeople to try to increase the percentage of HP products in any given deal at the expense of either closing the deal outright or overextending the sales cycle.
Thompson concedes that while the initial terms of the HP PartnerOne program may have been drive-by spreadsheet economics derived from a time when the company felt it was under siege from both Dell and Wall Street analysts, the program has since evolved to reflect street realities in the channel that reward partners for driving demand for HP products.
Thompson took over the role of channel chief for North America during the tenure of former HP Chief Executive Officer Carly Fiorina. In fact, 24 hours after she resigned, Thompson was informed he needed to fill in for Fiorina as a keynote speaker during one of the company's worldwide partner conferences.
His performance since then has earned him, and the organization, credibility in the channel, partners told Channel Insider.
"He was put to the fire right away," said Rick Chernick, CEO of Camera Corner Connecting Point, of Green Bay, Wis., and president of HP's SMB Partner Advisory Council. "He walked into a camp that was on fire, and he put out the fire.
"Before him, there was so much uncertainty about our place in the company," he said. "We went to meetings not knowing what to expect, and we came out of meetings not knowing what had happened. I remember walking into a Partner Conference with Carly [Fiorina], and we walked out, [another partner], myself and others saying, 'What did they just tell us? Are we even in their plan?' This guy wasn't paying you lip service, and it was a full 360 [degrees] from what we had been getting."
Chernick and others expressed genuine appeal for Thompson. "He made you feel like you and he were just one of the guys talking, which is a neat feeling coming from someone that high up on the [corporate] ladder," he said.
Over the last 11 consecutive quarters, HP has recorded profitable sales gain in the channel, with nine of those quarters coming under Thompson's tenure. In addition, Thompson noted that the HP executive management team across the board is more committed to a mutually beneficial and collaborative channel business model than ever before.
"People today realize now that we're better together and that it's more profitable for them to wrap their solutions around as many HP products as they can," he said.
VARs said they are optimistic the mood at HP will continue.
"I don't think we're going back to the old ways," Tan said. "They've given us every indication that this is the new way of doing business. It comes from the top down, and [CEO Mark] Hurd has been pro-channel of late. I don't think that will change, and I think he will want someone in that position that feels similarly."
"I've come to learn over the years, when an employee tells you they are leaving, it always seems terrible," Cage said. "But it always works out in the end. This will too. I liked John a lot. But I think we'll be OK in the end."