HP Makes Slow but Steady Channel Progress

It takes a lot of time and effort to repair relationships in the channel. That’s the hard lesson the folks at Hewlett-Packard are learning after extending some very attractive olive branches to the channel at the company’s annual partner conference last spring.

As part of a sustained effort to extend its reach across the channel, HP is returning to simplified membership levels across its channel program: Platinum, Gold, Silver and Standard business partner levels. At the same time, HP is reducing the number of technical certifications—from 44 to 22—that partners must achieve to reach various levels. The company also eliminated more of the caps and gates that limited the amount of profit a partner could generate.

Patrick Eitenbichler, director of marketing for HP PartnerOne strategy, said HP is making a concerted effort to let partners know that it is committed to making partners more profitable, while making HP easier to do business with. “We’re making a real effort to make sure there is a lot more channel consistency across the business units,” he said. “Right now, we’re focused on getting the word out to the channel partners.”

The challenge is that it takes time to rebuild a channel organization that was largely dismantled under previous HP CEO Mark Hurd. In contrast, current HP CEO Meg Whitman has made a huge commitment to the channel. But many of the foot soldiers that HP needs to carry that message to the partners are still missing in action.

“HP is making a lot of strides in the right direction, said Pete Busam, CEO of the solution provider consulting firm Equilibrium Consulting.”But it’s mostly in the form of inside coverage. There’s still not enough field coverage. When it comes to smaller partners especially, when you’re out of sight, you’re out of mind.”

Eitenbichler said HP is working to make the company’s channel programs more consistent across different business groups. At the same time, there is still a fair amount of instability within HP’s senior management ranks.

For example, Todd Bradley, the longtime head of the company’s PC business—which was viewed in some quarters as a major channel advocate—just became executive vice president of strategic initiatives. It’s unclear whether another channel void has been created within HP.

However, Equilibrium’s Busam said that HP is still too hard to work with for many of the smaller partners. “The HP program itself is great,” he said, “but they still need to simplify the bidding and pricing models.” Busam added that, when faced with that complexity, partners will simply take business elsewhere.

In many ways, the HP channel program is heading back to the future. Prior to the hiring of Mark Hurd to run the company, HP boasted one of the most vaunted, respected and feared channel organizations in the industry. As responsibility for channel sales and marketing devolved into individual business units under Hurd’s tenure, the company lost focus on the channel.

This issue didn’t occur over night, but fixing it isn’t going to occur overnight either.  That’s one of the primary reasons why Whitman is continually reminding investors that righting the HP ship is going to take several years of effort.

That effort isn’t focused as much on recruiting new channel partners as it is on re-energizing the installed base of partners and recruiting once again the channel partners that had drifted away over the years. Whatever the outcomes of those efforts, HP’s renewed focus on the channel has been warmly received—at least among those partners that got the message.