Putting the Partnering Back into HP’s PartnerOne

What a difference three years can make. When Hewlett-Packard first rolled out its PartnerOne program, it was largely misunderstood and generally reviled as an overly ambitious effort to impose quotas on partners while simultaneously burdening them with massive amounts of paperwork that sapped profitability.

At the time, HP was dealing with both internal and external critics of its channel organization who were convinced that Dell had a better business model that was going to drive HP under. The problem at the time was that HP had little in the way of tangible proof that countered any of those claims, so HP executives were pretty much forced to come up with a blunt instrument that imposed some system of metrics on the channel.

That sudden imposition of overhead and onerous restrictions drove more than a few solution providers away from HP. In addition, many saw the imposition of mandatory attach rate quotes that were presented as part of a loyalty oath to HP by newly installed HP CEO Mark Hurd as an insult being delivered following injury.

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But many of those partners who persevered began to discover a very compelling silver lining to PartnerOne. Although the program may be overly complex, many partners report that they now make a lot more margin selling HP product today than they ever did before. That has hard-core HP solution providers like Sam Haffar, president and co-CEO of Computex, swearing by—rather than at—HP because his company is seeing increased sales that are significantly more profitable.

But perhaps more importantly, as HP achieves financial stability while welcoming aboard new channel chief Adrian Jones, the company has begun to add nuances to an admittedly blunt PartnerOne program that begins to reflect the fact that solution provider organizations are not merely outsourced salespeople but rather full-fledged partners.

For example, HP is now adding a Growth Accelerator program—rather than uniformly requiring all partners to reach the same sales goals, it will now take into account the size of a solution provider and work with that partner to set reasonable sales goals. In addition, HP is now recognizing that solution providers don’t experience uniform year-over-year growth every quarter, so if a solution providers misses a quarter sales goal they can now make it up in subsequent quarters.

Other noteworthy changes in the last year include Velocity pricing that gives solution providers selling servers and storage some leeway to set pricing rather than always having to wait for HP to respond to special pricing requests. HP is also doing a better job on the PC side setting some specific price floors that partners know they can quote without special dispensation from HP. And now if solution providers sell products outside of HP’s 1,300 named accounts, they will receive higher margins.

At the same time, incoming channel chief Jones in a podcast interview says that HP is committed to making the overall PartnerOne process easier, which should formalize some work in this area that was begun by Tom LaRocca, HP’s vice president of partner development and programs, and former HP channel chief John Thompson.

As we look toward the rest of this year and beyond, solution providers should also expect to see HP do a better job of integrating the printer and networking groups into PartnerOne, which should be followed by efforts to create programs that more rationally attach incentives to solutions that bundle HP products that are logically connected to each other.

All in all, it’s been a long, hard road for HP in the channel, and the journey is far from over. But it’s safe to say that days of draconian channel policy crafted under duress are behind HP. And for solution providers and the channel as a whole, that’s a very good thing indeed.