IBM, HP: Still Committed to the ChannelBy Pedro Pereira | Posted 2005-04-19 Email Print
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The two companies reassure a group of channel partners that they remain committed to the channel and to growing their indirect business.ATLANTAExecutives from IBM and Hewlett-Packard Co. sought to reassure a group of channel partners on Monday that their companies remain committed to the channel and to growing their indirect business.
Both companies are undergoing major changes, raising questions among VARs and integrators about any possible effects on their channel strategies. IBM is selling its PC business to a Chinese company Lenovo Group, while HP has had a series of management changes, the latest of which is the appointment of an NCR executive, Mark Hurd, to replace Carly Fiorina, who left in February.
HP and IBM executives took turns addressing about 350 members of distributor Ingram Micro Inc.'s elite VAR group, the VentureTech Network, who are gathered here for a three-day relationship-building event.
In an interview with the Channel Insider, Thompson said those steps include changing such policies as contract renewals. In the past, HP would not allow a partner to participate in the renewal of a contract that HP had directly with a customer.
The company also is reimbursing partners for volume rebates much faster than it used to, and it has increased compensation for partners who sell multiple products from the HP product portfolio, be they storage, PCs, printers or software, he said. Future changes will include how HP compensates inside sales staff to encourage them to work with partners.
These changes, Thompson said, have happened in response to partner feedback.
"We've been very solicitous of the partners in terms of what they need to be successful," Thompson said during the interview.
HP is preparing to roll out a hardware and services program, called SmartDesktop, through which VARs and integrators can deliver HP technology and services and complement them with their own service offerings, he said.
Partners are especially key in targeting the SMB (small and midsize business) market, which Thompson estimated at $146 billion and growing at a 7 percent annual clip.
Thompson encouraged IBM partners to switch to HP as IBM sells off the PC business. He said up to 50 percent of that business is up for grabs as a result of uncertainty among customers.
Some event attendees said they thought that figure is too high, though it is possible that some customers will move to a different brand.
Gary Redshaw, CEO of FutureVision, in Raleigh, N.C., a VentureTech member, said he switched from HP to IBM a few years ago and has no intention of going back. He switched because of questions over HP's channel commitment and some end-of-life issues with products the vendor stopped supporting, angering his customers, Redshaw said.
"I'm not going to return to them. I was a loyal HP reseller. I moved a lot of boxes for them," he said.
IBM executives said nothing will change from a partner perspective after Lenovo takes over the PC business. The channel strategy remains the same, and the people who were working in the IBM PC group are the same people who will be working when Lenovo takes over, said Stephen Mungall, vice president of U.S. Distribution and Reseller sales.
"That's why I think this will be very seamless. There's no integration work behind the scenes," said Mungall, who will become Lenovo's vice president of Inside and Solution Partner Sales.
Lenovo will maintain the same channel approach IBM has had, he said. And since he will be in charge of both direct and indirect sales, Mungall said he will make sure that Lenovo's direct sales staff never touches the customers of channel partners.
"Your customer is your customer. We're not going to call them," he said.
Ingram Micro co-President Kevin Murai said IBM in the last three years has developed a very friendly channel strategy, which he does not expect that will change after Lenovo takes over.
"If you talk to partners about it, you'll be hard-pressed to find any real concern," said Murai. "In general, partners are much more comfortable today than they were at the time IBM made the Lenovo announcement."
For its part, he said, HP has made solid strides in the last 18 months to improve its "spotty" channel record by re-engaging partners, especially in targeting the SMB market. HP is recognizing that penetrating that channel directly is not any more cost-effective than doing it through channel partners, Murai said.
Scott Goemmel, executive vice president of PMV Technologies, a VentureTech member in Troy, Mich., said while he heard nothing new during Thompson's address, he has seen signs in recent months that HP has gotten serious about reaffirming its commitment to the channel. "I think they're really coming along, and it's really needed," Goemmel said.