"Insights From John Thompson, HP's Top Channel Executive "

Now two and one-half years into his job as GM of HP’s Solution Partners Organization, vice president John Thompson has solid progress to report. For starters, HP has recorded 10 consecutive quarters of growth in its partner business. Furthermore, Thompson says HP has made solid progress making life easer for partners. There’s less paperwork for them to fill out, for example, and more incentives at nearly every turn. Not only that, it now takes dramatically less time to get a partner a price quote than it did just six months ago.

That said, HP’s partner value proposition is undergoing significant change. Some is causing unease in certain parts of HP’s channel, Thompson’s efforts notwithstanding. It’s clear that HP CEO Mark Hurd views partners as strategic assets. But it’s also clear that he wants to use those assets in ways he sees fit. Right now, he wants the assets to produce results. (Revenue growth, after all, is the company’s top priority.) That’s why HP has so many new rewards that recognize the efforts of those who sell more of the HP product portfolio.

The interesting thing about HP’s strategy is that it runs somewhat counter to general trends within vendor partner programs. Right now, most are moving from volume-based programs that to more value-based ones that reward partners for contributions or achievements in addition to sales volume. That could be technical or service-excellence, or even account penetration. HP’s new inducements are clearly aimed at rewarding those that pick up more of their HP product line. That has some specialists concerned. Will their efforts to focus on a more limited portion of the HP portfolio mean giving up valuable incentives? Clearly there is a move to look more favorably on the general contractors within HP’s channels. It remains to be seen if HP specialists will suffer.

Read TC’s complete interview with John Thompson

SCENE AND HURD

The scene was Las Vegas. The setting: HP’s annual partner confab, underway this week at the Mirage.

What was heard? How about HP CEO Mark Hurd, for starters. In a keynote address to attendees on Monday he made what is no doubt his most important address to partners to date. His message: "attach, attach, attach."

Well that was one key message. Actually, Hurd had plenty to say. And for the most part, his audience loved it. But there were some concerns. Hurd made it clear that he wants committed partners, the kind that know the difference between loyalty and fidelity. He wants the latter and has approved incentives for those who deliver. (Today the company unveiled several incentives that reward those who sell certain products, including blades, PCs and services.)

To some partners, that is worrisome. They have listened to past HP channel managers who have suggested that it is a lose-lose proposition trying to be all things to all people. The subtext: specialize in one product or technical specialty. Some who did are now worried they will be overlooked or somehow marginalized in the new, "reward the mover of multiple lines of products" world of HP.

(In an interview that I will post tomorrow, John Thompson, vice president and GM of HP’s solution Partners Organization, vigorously defends HP moves and explains why they aren’t hostile to product specialists.)

Another item of concern: HP is planning on hiring hundreds of new salespeople. The reason: HP’s market share is way up in segments where it has sales density and dramatically less where it lacks sufficient feet on the street. The above is not a statement of channel direction, Hurd said, but a market reality. To him, these people are going to be terrific demand generators for channel partners. To some allies, but importantly not all, they could be potential sources of friction and conflict. Time will tell. That said, two notable observations. First from Hurd: the channel, he said, will likely be doing more of HP’s business if not the same in three years. Secondly, from a committed partner: "The new sales blood? Could be good," says Sean Burke, co-founder of GovPlace, a California-based HP business partner. "The new sales people aren’t likely to be entrenched in old ways of doing business and may help more experienced HP veterans consider working with the channel in new ways."

Read TC’s full BLOG entry on Hurd’s remarks