Boy, what a difference a year makes. Make that six months, rather.
It wasn’t that long ago—end of last summer, as a matter of fact—that I was harshly criticizing Hewlett-Packard for strong-arm tactics when dealing with its channel partners and giving them what appeared at the time to be ultimatums regarding committing more business to the vendor.
Well, since that time it looks like the channel executives at Hewlett-Packard have rolled up their sleeves and really thought through how the company can get solutions providers to willingly expand their HP services and offerings.
It is not an easy task, to say the least. Getting vendor-neutral VARs to invest time, money and resources into pushing your products over another vendor’s is like walking a tightrope.
You need to reward your most loyal channel partners, but you also have to encourage others to do more business with you.
After speaking last week with John Thompson, vice president and general manager, Solution Partner Organization – Americas at HP and Tom LaRocca, vice president, Partner Development Programs, I came away feeling HP has put together a winning formula to keep its largest solutions providers committed while gaining more loyalty from its lower-tier partners.
Click here to read how the PartnerONE Revision could drive VARs to grow their HP business.
HP has revamped its PartnerONE program including changing the membership criteria, marketing program changes and altering the rebate formula to “Attach Plus.”
The changes go into effect on Nov. 1 and are designed to increase the number of platinum-level partners while making it easier for others to obtain gold-level status. See the related story by John Hazard for the full details of the new program.
“I think what it does is that it provides an opportunity for partners to engage with us and grow their business,” Thompson said.
“It allows for a rollout of what we believe is the next generation of style of partner programs.”
Some of these innovative features include paying solution providers market development funds upfront instead of after accruing credit with the vendor.
This to me is big because it will allow VARs to be more proactive in investing in new growth areas instead of being reactive and looking to get money back that was already spent.
This alone will cause many channel partners to get involved with other HP offerings because they will be in the mindset of planning for the future instead of trying to get reimbursed for the past.
Other features include lowering the revenue bar for platinum partners and basing this level solely on revenue dollars associated with HP’s products and services instead of the combined criteria of revenue amount and training and certification levels.
What makes this move even more attractive is that the solution providers that are already platinum level because of the training and certification levels will be grandfathered into the program, the executives said.
While HP could have easily booted these solution providers down to gold status and hope they do more business with HP to reach platinum again, the vendor decided against that.
This to me is also big because HP, while trying to change as quickly as the market, decided to reward loyalty with loyalty.
A vendor showing loyalty to a VAR will get that back in spades. I have said that before.
The only potential bump in the road I can see here is that HP will now pay what it is calling “Attach Plus” rebate to its channel partners on a quarterly basis instead of the “Membership Rebates” they were receiving on a monthly basis.
This may take some financial adjusting on the part of some channel partners, but as long as they know the money is coming, it shouldn’t be an issue for most. Besides, the upfront MDFs should more than cancel this out anyway.
“There are lots of benefits to this new program,” Thompson said. “The bottom line is we think it’s a program that is unique in the industry and that no one else can really touch. We want our channel partners to be able to leverage the broad HP portfolio that we have.”
I agree. I believe HP is onto something here. It’s a vexing problem to come up with a strategy that rewards the big guys for their loyalty but encourages and support the smaller guys at the same time. These enhancements certainly seem to do just that.
Elliot Markowitz is editor at large at The Channel Insider. He is also editorial director of Ziff Davis Media eSeminars. He can be reached at Elliot_Markowitz@ziffdavis.com.